Kids Nets Look to Cash In On Hot Ad Market

Nick and rivals eye big spending on toys, movies

Why This Matters

WHY THIS MATTERS
Ad revenues depend on whether marketers still need TV to reach a digital generation of kids.

Kids networks are expecting a big upfront as toy and movie marketers will be spending freely. However, TV is hardly the only game in town when it comes to reaching kids today.

“The kids market has been impacted by a shift of viewing online, which is not being captured in the ratings numbers,” says Derek Baine, analyst at SNL Kagan. “Kids are increasingly using tablets and some of the viewing is shifting to non-cable network content like YouTube channels.”

Kagan’s figures for 2015 show the kids TV market was mixed, with ad sales falling at some nets, and rising at others.

The big players in the kids market—Viacom, Time Warner with Cartoon Network and the Walt Disney Co.—all have websites, app and other digital hooks to catch children. But they say TV is still the engine that drives sales.

“TV is still dominant,” says Jeff Lucas, head of ad sales for the Viacom Media Networks. “You can’t launch a movie for kids without Nickelodeon.”

“The reach that we have with linear is unequaled. But that’s not our strategy because you can’t look at the world that way anymore,” says Joe Hogan, Turner executive VP for sales. “We program, market and interact with our fans across all the ways in which they consume our content.”

Francois Lee, executive VP, investment director at media agency Assembly, believes TV is still vital for reaching kids. “Its role will be different,” Lee says. And as in the adult market, marketers must “follow their audience across screens and make sure they reach them where they are.”

Pricing in this year’s upfront won’t be cheap. “The scatter market has been robust, although I don’t think the kids market is as robust as the general market,” Lee adds.

Nickelodeon Comeback

Nickelodeon, the kids ad spending leader whose ratings plummeted a couple of years ago, wants advertisers to know it’s back, says Lucas. Ratings at Nickelodeon turned up in the fourth quarter behind standbys such as SpongeBob SquarePants and newer hits such as Game Shakers and Blaze and the Monster Machines.

“Nickelodeon in this upfront will be in the strongest position it’s been in since I’ve been here,” says Lucas. “We’re introducing more product than we’ve ever introduced before, and it’s exciting.”

Nick will present new programming to media buyers and clients at a big presentation March 2 at New York’s Lincoln Center.

The categories that buy the most kids advertising have been trending up. Lucas says toy-makers are spending to advertise their products. And the studios have a bunch of kids and family pictures coming down the pike.

Nickelodeon has another ace up its sleeve. About 37% of its inventory will go to consumer products partners to promote brands with Nickelodeon tie-ins. Nick also usually has a bunch of inventory tied up in two-year deals, but last year, Lucas says the upfront looked weak, so he did fewer multiple-year deals. That choice will look good if this year’s market is as strong as he expects.

The majority of Nickelodeon clients advertise across multiple networks and platforms. “We don’t have one-size-fits-all in terms of the different data and marketing products we have. We only use what works best for every individual client,” Lucas says. “That way we get them to come back and we have success and they want to spend more. And that’s the name of the game.”

Turner Plumbs Plurals

Turner’s Cartoon Network has been doing research into kids from the new generation of plurals (a.k.a. gen-Z). Its strategy is putting fans first and making content available to them in multiple ways. “It now spans everything from apps to these immersive worlds that we’re building, to shows on [video-on-demand] and linear and mobile and desktop and on the ground activation,” Hogan says. Cartoon Network is the top channel in VOD, topping all kids and adult networks.

In addition to Cartoon Network, last year Turner began selling ads on its Boomerang cable network. “It’s doing very well, growing in ratings, growing in distribution and it is something our clients have shown an ever–increasing appetite for,” Hogan says.

With some of those clients, Turner is adding a return-on-investment component to their ad deals, either by trying to measure the effect the campaign has on viewers or by guaranteeing results.

Disney Connects

Disney has been focusing its research efforts on families with kids and millennial moms, and finds that “linear TV still leads in time spent with media,” according to Rita Ferro, executive VP, Disney Media Sales and Marketing. While there is a migration of spending and testing in digital, “the majority of the budgets are still on linear,” she adds.

Disney’s sales and marketing unit finds ways to match brands with sponsorship opportunities with the programmer’s properties.

In the past year, Clorox was attached to a Doc McStuffins sweepstakes with a health message on Disney Junior, Best Western sponsored K.C. Undercover on Disney Channel, Band-Aid and Goldfish crackers were sponsors of the Radio Disney Music Awards and Dole was connected to Disney Channel original movies on the channel and the Watch Disney Channel app.

Sprouting Originals

Earlier in its life, NBCU’s Sprout had exclusively targeted moms with advertising, but last year it began selling ads aimed at kids as part of an original programming strategy.

The network looks to double its original programming this year with new shows including Terrific Trucks and Dot (from Randi Zuckerberg, about a tech-savvy girl) and triple it by 2018.

Laura Molen, ad sales executive VP for NBCU’s lifestyle networks, says Sprout is engaging viewers across all screens, resulting in an eye-popping length of tune of 53 minutes. NBCU’s research has also found that with all that engagement, advertising produces not only increased awareness but convinces buyers of one brand to switch to Sprout’s sponsor.

“The engagement on Sprout translates into product consumption for our advertisers,” Molen says.