The Kids Are All Right: Youth Upfront Set to Eclipse $1 Billion

Cartoons adhere to their own physical laws: Ducks, cats and coyotes may be spliced, splattered and splintered, but they can never be destroyed. The kids ad marketplace conforms to similar principles.
      
A short time after getting bonked on the skull by the recession and a crackdown on food marketing, the cable networks targeting the 12-and-under set have rebounded. Heading into the 2011-12 upfront, ad sales anticipate a record windfall, with early commitments piling up beyond the $1 billion mark.

Any discussion of kid-targeted TV has to begin with Nickelodeon. For 16 years running, the Viacom-owned powerhouse has been the No. 1 network among all key kid demos in total-day viewing. And with a command of some 75 percent of all the negotiated GRPs in its competitive spread, the network and its branded offshoots essentially set the market.

Nickelodeon closed out the first quarter of 2011 with an average total-day draw of 2.37 million total viewers, of which 1.31 million were kids 2-11. The kids leader more than doubled Cartoon Network’s deliveries in the period (993,000/500,000), while topping non-ad-supported Disney Channel (1.77 million/984,000) by some 34 percent.

Flush with toy, studio and food dollars, Nickelodeon is in a position to reap big dollar volume in this year’s upfront. Jim Perry, head of Nickelodeon 360º ad sales, said the strength of the core categories coincides with one of the most robust scatter markets in memory; at present, pricing is coming in at a 25 percent to 30 percent premium over upfront rates.

“If you start with toys, which is obviously the biggest category in the kids market, we’re enjoying a big resurgence lately,” said Perry, adding that sales have been helped along by heavier buying from midtier players like Lego, MGA Entertainment (Bratz), Spin Master (Thomas the Tank Engine) and Jaxx Pacific, maker of WWE action figures.

Last year, retail toy sales grew 2 percent to $21.87 billion, thanks to perennial favorites such as Barbie, Crayola and Nerf. NPD Group analyst Anita Frazier said 2011 promises to be “another solid year” for the sector, given the improving economy and the wealth of movies, with expansive toy tie-ins set to be released in the next three quarters.

While Nickelodeon gets a lot of mileage from its live-action comedies (iCarly, Victorious), Cartoon Network is doubling down on new animation. The Turner network will refresh the Bugs Bunny brand with the premiere of The Looney Tunes Show (May 3) and is in cahoots with DreamWorks Animation to develop a series based on the 2010 theatrical, How to Train Your Dragon.


Cartoon ad sales chief John O’Hara said the strength of the kids space is commensurate with that of the TV market in general, adding that fourth-quarter scatter was “the strongest it has been in three or four years.”

While there are three crucial periods for marketers looking to reach kids (pre-Easter, back-to-school and the Hard 8, or the last eight weeks of the year before Christmas), O’Hara said the added value of online buys has helped expand Cartoon Net’s relevance throughout the entire year. Approximately 85 percent of Cartoon’s partners invest in both the linear channel and its various digital platforms.

“When the upfront marketplace begins, we’ll turn our attention to back-to-school sales, O’Hara said. “Over the last few years, demand for time in September has been up there with preholiday levels. That’s a function of the toy companies looking to move product and secure shelf space” ahead of the Hard 8.

First in prime among the key demos and second in total day, Disney Channel posted double-digit growth in Q1 2011. And while it doesn’t traffic in traditional :30s, Disney Channel continues to beef up its ad model, developing exclusive multiplatform packages for the likes of Microsoft, Verizon and Best Western. (For the fourth straight year, the hotel chain has placed its summer ad dollars exclusively with Disney.)

Ahead of the April 15 premiere of its latest original movie musical, Lemonade Mouth, Disney Channel has negotiated a sponsorship to Chrysler and its 2011 Town & Country minivan.  In a bid to target the breadwinners who watch alongside their kids and tweens, Chrysler will present the movie on-air, and via Radio Disney and a Disney Online sweepstakes.

Two years after launch, Disney XD now ranks fourth with kids 6-11. Along with the endemics, the boy-targeted network is boosting its consumer electronics and telecom business, said Rita Ferro, head of Disney Media Sales & Marketing.

While unlikely to play spoiler in this year’s upfront, upstart Hub has the benefit of six months of airtime under its belt. And despite toy giant Hasbro’s 50 percent stake in the network, president and CEO Margaret Loesch said the Hub has deals in place with 30 toy/game clients.

The established networks seem unconcerned about the newcomer, which closed out Q1 with an average daily delivery of 77,000 total viewers. “The market is saturated,” said one buyer. “This is a nice, inexpensive add-on, and there’s value in that. But the deliveries aren’t really there.”

Heat Seekers

As long as the broadcast networks hang out the proverbial “Gone fishin’” sign every May, cable will own the hot and lazy summer months. Naturally, HUT levels decline after Memorial Day, but the goofy filler series that populate the Big Four’s respective lineups often play out like a 90-day shrug.

If ABC’s July 2011 strip America’s Karaoke Challenge proves to be as entertaining as the real thing—which is to say, not at all—at least the effort won’t cost as much as past scripted failures. Just last year, viewers were subjected to a host of flop-sweat broadcast dramas (Scoundrels, Sons of Tucson, Three Rivers, etc.) that failed to connect with viewers looking for an escape from the heat.

Cable’s deliveries may be relatively small, but viewers who thirst for smart, well-crafted drama and character-driven reality skeins are increasingly taking the plunge into the depths of the AMCs and FXes, the HBOs and Showtimes. And while every summer fling isn’t necessarily magical—this was also the season of the poof, the grenade, the Duck Phone and the DTF—there’s a little something for just about everyone.

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