Special Report: Marketing to Children

Welcome to Our Special Report on Marketing to Children
Welcome to the latest in a series of special reports from Direct Listline.

This edition is about marketing to children, a growing population with growing buying power.

In this special, we explore how to reach kids and their parents, whose purchasing decisions they often influence significantly. We also report on trends and offer statistics on what kids are spending their money on and how they spend their time.

These reports are designed to provide a snapshot of a niche at a given moment. We are planning several more this year.

If you have any comments or suggestions, please contact Ray Schultz, editorial director, at [email protected].

Thanks, and we hope you enjoy the report.

MARKET OVERVIEW
Kid Power
By Jim Emerson

What do you call someone who makes post-purchase decisions? Answer: A parent.

It’s no secret that children can be a marketer’s best friend. That’s why an estimated $2 billion annually is spent on advertising targeting children via their parents and vice versa, according to nonprofit media watchdog group MediaChannel.

Children have a huge influence on their parents’ purchasing decisions and they also often determine what to buy on their own. MarketResearch.com projects kids’ direct buying power to approach $52 billion by 2006. Some of the largest product categories for marketers targeting children are obvious: food, candy, clothing, video games and outdoor sports. Analysts also see increasing sales potential in health and beauty products, as children mature younger; kids’ furniture; and electronics, especially computers.

Some 24 million children ages 6 to 11 accounted for about a third of the under-18 population in 2003 — nearly 8% of all U.S. residents. This percentage is expected to remain fairly stable through 2020, when children could make up approximately 24% of the population, according to U.S. Census figures.

The conventional wisdom for reaching children is to frame a marketing message in a manner that speaks to both kids and parents. From an ethical standpoint marketers are reminded constantly that offers need to specifically address parents, since it’s the adult who will be forking over a credit card.

There are ethical ways to communicate with children who will influence the final decision that closes a sale. But the key to keeping out of trouble is to always obtain parental consent.

Targeting the children’s market can be as simple as running space ads in parenting magazines, renting children’s catalog lists and participating in affiliate marketing programs with family oriented Web sites. A good list analyst will tell you that list selection can be improved with data-mining techniques to identify lifestyle and demographic patterns that correlate to generating desired responses.

With statistical modeling, data overlays and selects related to children, there’s no need to limit list acquisitions to companies that specialize in youth market files. More diversified list companies, such as ClientLogic Specialists Marketing Services, can be excellent data sources too.

One example of leveraging data is to use a list to identify children’s market segments that correlate to demand for specific products and services. For example, a family with teenagers is statistically more likely to have two phone lines. And preteens generally like to decorate their rooms to reflect the pop culture interests favored by older kids.

List data can be used to create predictive statistical models and the results can be scored in tests and campaigns, which in turn can be used to find more look-alike prospects on other lists, by matching similar lifestyle and demographic variables. It comes down to analyzing purchasing patterns associated with models to pick and choose names from lists. Another way of putting it is to find prospect households with children and other characteristics that closely resemble households of existing customers that bought a particular product.

List pros recommend testing how simple pieces of customer data correlate to list selections, which can be used to identify cross-selling opportunities, before deciding which selects and data to use with statistical models. One common element to consider is recency data. Knowing that someone with a child in the house recently bought a particular product can be useful information…to help sell more.

STATS
Demographic Facts and Figures
* Futurists expect the Internet will replace television as kids’ medium of choice. By 2007 an estimated 57% of children age 11 or younger will be online. Forty-six percent of 7- to 12-year-olds already go online at least four times a week, while 20% use the Internet daily. This is no surprise, since close to 17% of children have computers in their bedroom. What’s more, over 2 million kids age 6 to 17 have their own Web sites. Today’s most Internet-savvy kids live in Tampa, FL, followed by Philadelphia, New York, Washington and Miami.

* Numerous studies point out that television viewing is nearly universal among children. Ninety-eight percent of 4- to 6-year olds watch TV. Roughly 61% of all children have a TV in their bedroom. Seventy percent of children who watch sports on TV do so with another viewer present. It’s estimated that the average child sees 55 TV commercials daily.

* Children ages 4 to 12 typically have “incomes” of around $3 a week in the form of allowances or gifts from adults. This easily adds up to $4 billion in annual spending controlled directly by kids. The largest share (58%) is spent on candy, followed by toys (30%), according to research conducted at the University of Georgia.

* Roughly a third of children reside in single-parent or other non-traditional family households, such as with grandparents. About 68% of children were living in traditional family households with two married parents in 2000, down from 72% in 1990.

* An estimated 3.4 million children currently live in gay or lesbian households. Market research figures for 2002 indicate these parents spend in excess of $22 billion on products and services for children. The “gayby boom” trend for adoption and childbirth in this demographic group started in the 1990s.

* Families with school-age children spent an average of $451 for back-to-school items in 2003. That translates to some $14 billion, based on survey findings from the National Retail Federation. Another $750 million came directly out of student’s pockets. An average of $206 was spent on clothing, $85 for shoes, $86 for electronic products and $74 for school supplies.

* The food industry has determined that youngsters between age 5 and 14 have considerable influence over the $30 billion spent on food and beverages each year. Kids reportedly control $10 billion of these purchases.

* Teenagers and “tweens” (those between age 8 and 14) account for $6.9 billion in cosmetics sales for hair and skin products.

Sources (other than those cited above): America Online, CMR/TNS Media Intelligence, Digital Marketing Services Inc., Grunwald Associates, Journal of the American Medical Association, Knowledge Networks/SRI, Rensselaer Polytechnic Institute