April 25 2003


Marketers have found a new demographic. Peter Gotting reports on how preschoolers are being turned into consumers.

When the American teenagers Mary-Kate and Ashley Olsen visited Australia last year as part of their quest for global domination, parents raised concerns that children were being sold out to the world of marketing. The girls, who became famous as child television stars and are now a brand in themselves, were targeting "tweens", those aged eight to 12, with a range of entertainment and fashion products. If you think tweens are a young target for the world of marketing, consider the latest demographic - "tinys": three- to five-year-olds. Preschoolers these days are savvy consumers, the logic goes, valuable as a market of their own.Marketers realise there is significant money to be made from children. Think of the Wiggles who, having exceeded annual revenues of $14 million, are consistently in the list of richest Australian entertainers. Think Bananas in Pyjamas, seen in 70 countries by about 100 million children, and Bob the Builder, who has clocked up more than $2 billion in sales across the world.The British company which owns the Bob the Builder and Thomas the Tank Engine brands, Hit Entertainment, has even suggested a television show for babies. "Everybody realises there is a huge learning period for children from zero to 18 months, but nobody is making anything for them," Hit Entertainment's owner, Peter Orton, says. "Those kids are like sponges at that age, and there's a great opportunity there. That might scare people, but it is a very interesting area."You're never too young, it seems, for marketers. Children's marketing is a growing area, evidenced by the increased profile of consultants such as Martin Lindstrom, a youth branding adviser to companies such as Mars, Pepsi, Lego and The Cartoon Network. In a new book called Brand Child, he says children heavily influence at least two-thirds of parents' purchase decisions, not just of toys but cars, clothing and mobile phones.
  
While much of Lindstrom's work is on tweens, he says brands are of increasing importance to those as young as 18 months. He cites a British study by research firm BMRB, which said one in four children speaks brand names as their first recognisable words."Kids today don't say, 'I want a hot chocolate'. They say, 'I want a Starbucks chocolate'," Lindstrom says. With growing divorce rates and many parents spending more time at work, it's getting easier for kids to pester, Lindstrom says. "There's no doubt of kids' influence on parents. When [parents] are at home they want to do whatever they can to please the kids."For the past six years, marketers who specialise in targeting children as young as three have gathered at an annual conference called Kidpower. This year's conference, to be held in Sydney in July, will feature commentary on children's trends, the creation of customer loyalty through membership programs and the pursuit of growing market share through brand extensions. The Kidpower program says the conference will discuss issues such as "the role of music for children under five" and provide insights into success stories, such as a marketing campaign which helped a range of dolls become the "hottest-selling items to girls aged three to eight".The general manager of operations for the Wiggles, Paul Field, says he is often approached to speak at such events. "Every year I get correspondence from marketing seminars that invite us to speak," he says. "We shy away from that because it's a bit too brutal in the approach. It seems like they are setting out to learn tricks to sell things ... That's not where we come from."Critics of the children's marketing industry believe it creates demand and hype with the sole aim of selling products. But marketers see their role as fulfilling the entertainment needs of children, with the biggest success stories due to clever ideas that tap their active imaginations.While many Australian companies which produce children's toys and merchandise are aware of the term "tinys", none admit to using it to describe their marketing approach. "We certainly don't align ourselves with the more aggressive marketing programs that actually market to a demographic," says Grahame Grassby, the general manager of consumer publishing at the ABC. "We simply find that preschool children, and Australians at all demographics, want an off-screen experience on top of what they want onscreen."Many companies which market to children say they do not like to use "marketing-speak". Even Disney, perhaps the best known children's entertainment company in the world, shies away from such talk. Its Australian division has recently launched a music group for two- to five-year-olds, Jamm, but its executive director, Rob Taranto, speaks of the group intrinsically selling itself. "We promote Jamm, of course, as a group, but Jamm really tend to sell themselves," he says. "Where we come from with Jamm is just offering kids great entertainment." Taranto says the promotion of the group is aimed at parents. "We are communicating Jamm to our market [but] we communicate the core message to parents."Until the age of five, the only money any child can obtain, of course, is through their parents. Everyone knows about pester power, however. "It's clearly not a term we would ever aspire to use because it sounds somewhat insidious," says Field. "But as a father of four, I know what they are talking about."A marketing consultant, Richard Sauerman, says marketers target children and parents. "You're trying to market to the decision-maker or the buyer. When the kid is two, they are hardly out there spending money ... [but] if the kids don't want it, they are not going to have it. You have got to capture the kid's imagination."Television has proved a particularly powerful way to capture young imaginations, with the characters in many shows licensed profitably into merchandise. The Australian toy company Funtastic reported a profit of $8.99 million last year, compared with $3.14 million in 2001, following strong sales of Spiderman and Barbie toys. The company has also been boosted by its recent acquisition of licences to Bob the Builder, Thomas and Friends, Digimon and the Wiggles.Funtastic's marketing manager, Suzie McInerney, says a lot of the industry's growth in recent years has been driven by the power of such licences, with kids attracted to many characters and products because of TV programs.McInerney believes children only become consumers independent from their parents from about the age of seven. But "there's quite a lot of debate about when does the purchasing decision change from the parent to the child", she says. Many believe that children are "getting older younger" but all the marketing to those under five is targeted at parents.Funtastic also markets its products through cross-promotions with food companies, with competitions and promotions on products such as yoghurts and fruit juices, as well as working through preschool networks and parents' publications. Much of this rests on the power of brands which children first come to know through television.But even though television is perhaps the most powerful medium for preschoolers, children this young cannot be targeted through commercials during specific programs for preschoolers. Advertisements are not permitted to be shown during P-classified programs, screened between 7am and 4.30pm on weekdays, under the Australian Broadcasting Authority's television regulations. Networks must broadcast 130 hours of such programming a year.Ads can, however, be screened around such programs. At pay television channel Nickelodeon, which airs its Nick Jr slot between 9.30am and 2.30pm each weekday, half the airtime is completely ad-free and the other half includes ads between - but not during - programs.The network's programming and research director, Jane Gould, says it is "fiercely defensive" over its discretion as to what ads are shown and rejects many requests. Many of its programs, including Thomas and Friends and the locally produced Blue's Clues, have merchandise spin-offs but Gould says Nickelodeon waits a minimum of two years before releasing products based around its in-house programming.The Australian Association of National Advertisers, which has many blue-chip companies such as Nestle, Unilever, McDonald's and Coca-Cola as members, recommends that "advertisements do not put undue pressure on children to ask their parents to purchase a product".But Young Media Australia believes marketing to kids has become more insidious than just the ads. Entire cartoon and children's television series are created to promote the sale of certain products, says its executive director, Barbara Biggins. "So many of these new [children's] programs were devised to sell the toys," she says. "It's all about selling products, not so much what is good for children."Biggins believes that marketing to children under the age of eight is unfair, with American research showing that it is at this age that kids learn to distinguish from factual information and that designed to persuade."The younger the kids are, the less able they are to deal with the techniques to persuade. It's becoming more and more of a concern for us as the target market is getting younger."But many marketers argue that the methods of promotion have only become more sophisticated as consumers have. "The word sophisticated comes up because kids know the game," says Richard Sauerman. "[Kids] know what advertising is about. They know it's self-serving; they can see through it." Techniques such as product placement in films are more easily spotted by children than adults, he adds.Lindstrom argues that it is better for countries to allow marketing to children rather than excluding children from commercial messages until they reach a certain age. Sweden is particularly protective of its children, prohibiting television ads directed at those under 12. Such exclusions prevent children from learning the way marketing works, Lindstrom says. If marketing to children was banned altogether, they would be "completely unable to cope with the onslaught of new information" in their adult lives.Instead of focusing on restrictions, the emphasis should be on honest and ethical marketing, he says. "If you fail to follow an ethical approach, it will soon come to light." The phrase of getting "beneath the radar" of children is sometimes used, but the best marketing is not about tricking people, Sauerman says. "It's really quite simple: you have just got to produce a bit of communication that kids love to watch."