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Hey, Little Spender

Choosy mothers choose Jif. But what do choosy kids choose? "Automobiles and electronics," says Mark Snyder, senior vice president of brand management for Holiday Inn. "Children very much get to participate in making those purchasing decisions." Let's face it. Anyone who has ever stood in a checkout line in the supermarket knows that kids have always had a say in purchasing toys, food and other smallish items. What's new is how far that influence now stretches—and how advertisers are reacting.

"Until this year, you would rarely see a vacation ad aimed at a child, because those purchases cost thousands of dollars," says Dave Siegel, president of WonderGroup, a consultancy that specializes in marketing to children. Now, Siegel says, marketers of big-ticket items such as vacations, cars and even homes are beginning to pay attention to those not-so-tiny voices.

Indeed, kids have their sticky fingers all over everything these days. James McNeal, who literally wrote the book on marketing to children, estimates that kids influence a whopping $680 billion in parental spending. Roughly 45 percent of purchases in U.S. households with one or more kids under the age of 15 were determined by the kids, says McNeal, head of the consultancy McNeal & Kids and author of The Kids' Market: Myths and Realities.

That may explain why Sunbeam cut a promotional deal for the new animated flick, Robots, bundling Robots-themed giveaways in specially packaged irons, mixers and toasters, as well as sponsoring a contest to "create a great idea that makes life easier for Mom, Dad or even Fido." Sunbeam is counting on kids' interest in the movie to push the products onto their parents' must-buy list.

And it's not just pedestrian appliances that kids are voicing their opinions about. Some 62 percent of parents now say their children "actively participate" in car buying decisions, according to a study by J.D. Power and Associates for the Nickelodeon network. That's significant, since a report by Packaged Facts (a division of MarketResearch.com) concludes that people with older children spend on average $1,500 more on the purchase of a new car than do their childless peers.

Why do parents seem so eager to please their kids these days? Maybe it's because giving in to Junior's demands makes Mom and Dad's increasingly scheduled life a little easier. Perhaps they're driven by the guilt of not spending as much time with their kids as they feel they should. According to the U.S. Census Bureau, 62 percent of mothers with children under 3 are now in the workforce, up from 44 percent in 1981.

Studies from the University of Michigan's Institute for Social Research conclude that children between the ages of 3 and 12 now spend an average of five hours a day in preschool or school, a two-hour increase from the early '80s. Even children under age 3 spend about two hours a day in some kind of organized day care or school setting. In 1981, the Boys & Girls Clubs of America had 1.2 million kids in various programs. By 1998, that number had jumped to 3 million, a 150 percent increase.

Whatever the reason, one thing is certain: Today's generation of kids have mastered a very important marketing device—the power of persuasion. "Children can be spectacularly monomaniacal about lobbying for what they want," says Siegel. "All the high-tech enhancements can't compete with that kind of word-of-mouth marketing."

Those viral tendencies ensure that a large portion of the marketing messages that kids receive will be passed along to their parents, says Siegel. "In a typical situation, you could take half of the reach that you get with children and expect that to go to the parent for free. So if you're going for a 50 reach with kids, you'll get a 25 reach with parents, just because of the word of mouth."

In the Driver's Seat

Carmakers in particular have been moving hard to get kids on their side. Toyota's current campaign for its Sienna minivan, for instance, features the tagline "Designed with kids in mind." Recent ads show a focus group of children dictating to designers what appeals to them. Another depicts a salesman with a carload of very demanding young test drivers. A General Motors ad for the Hummer taps into the anxiety a student feels as Mom drops him off at his new school, while the other students are clearly awestruck by the mammoth SUV.

"There's a growing appreciation for the fact that the audience for a car is bigger than what you might think," says Julie Roehm, director of marketing communications for Chrysler, Jeep and Dodge. "We're always cognizant that when you're selling a car, you've got to sell it to more than the primary driver. You've got to think about the entire relationship a driver has with his or her family."

A Dodge campaign for the Caravan does just that through broadcast ads that feature characters from the movie Monsters Inc. or include a tie-in with the DVD release of The Lion King. Print ads in Disney magazines are built around activities for kids such as word searches or picture drawing. "Those ads are geared very specifically toward families with young children," says Roehm. "You want to be able to have kids see and understand how they are going to be affected by the vehicle purchase of the family, too. The more excited they are, the more involvement they'll have with parents—or the more pressure they'll be able to exert—on choosing what that next purchase is."

Roehm says the sales numbers show that these campaigns are working. When Dodge started its advertising with Monsters Inc. and Lion King characters, she says, "We saw a steep increase in the number of Caravans we sold in that time frame. You could corroborate specifically to the start and end date of the program." Roehm expects DaimlerChrysler eventually to reach out to kids for all of Dodge's family cars.

Cars are hardly the only "grown-up" products being marketed with kids in mind. Marketers have found that putting a cartoon character on just about anything can increase its sales. That's why a growing number of consumer electronics companies are producing kid-branded items, from Barbie cell phones to Hello Kitty radios to TVs and DVD players branded with SpongeBob and other characters.

Even homebuilders are getting into the kid-friendly act. For its 10,000-home development in Anthem, Ariz., Pulte Homes spent millions on amenities that would appeal first to children: a kid-sized railroad, a water park, an in-line skating rink and skateboard parks. Pulte also made sure these amenities were the first things potential buyers saw when they drove into the development, says Deborah Blake, the company's vice president of marketing for Arizona and Nevada.

"We always make sure we are marketing to the children," says Blake. "We want the kids to say, 'I have to live here,' as the parents are driving by the model homes." That includes having the latest and best stuff in the children's rooms when they outfit the homes with merchandise.

"We spend a lot of time making sure merchandising is relevant to the consumer," Blake adds. "The reason you spend all that money doing that is to make sure people can picture themselves in the space. You're painting the picture of what it's going to be like to live there. The kids play into that just as much as parents."

Ethical Boundaries

The challenge for marketers is how to respond to this increasing influence without overstepping ethical or legal boundaries. Mention "kids" and "marketing" in the same sentence, and alarm bells tend to go off among parents and government watchdogs. That's why many companies are quick to say that their marketing "includes children" but is not specifically targeted at them. Snyder treads lightly when describing Holiday Inn's marketing efforts, which make heavy use of Nickelodeon cartoon characters, including the new Nickelodeon Family Suites hotel in Orlando, Fla. "It's right for us to have appropriate messages that are inclusive of children's input," Snyder says delicately.

The Federal Communications Commission, in fact, has strict regulations about character endorsements, arguing that it is difficult for a child to distinguish between programs and ads. The government also limits the amount of time that can be devoted to advertising during children's programs.

Many companies circumnavigate such issues by running "kid-friendly" ads during shows that have a large viewing audience of children but are not classified, per se, as children's programming. Another option: product placement. Under a recent Federal Trade Commission ruling, consumers don't have to be told that product placement in television shows may have been paid for, which could therefore constitute an advertisement. In its ruling, the FTC said those placements don't necessarily "give more credence to objective claims about the product's attributes."

The commission specifically said there is no harm in product placements in children's programs, even if the placement gets kids to pester their parents to buy the product. "In that regard, product placement seems no different from ordinary advertising," the FTC stated. "That it may result in children asking their parents to buy products seen on television does not constitute an unfair or deceptive practice."

What does the feds' mumbo-jumbo mean? Don't rule out a Hummer cruising the streets of SpongeBob's undersea paradise.


Constantine von Hoffman, CMO. April 2005

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