Sega Upgrades Its System

NEW YORK – With a pumped up ad budget and a new agency-of-record system to buy media largely along demographic lines, Sega of America is stepping up its challenge of Nintendo’s stranglehold on the kid’s video game market.
Ed Volkwein, senior vp/marketing for Sega, said last week that th 1San Francisco-based company will increase ad spending this year by 46% to $95 million. He also said Sega will adopt an AOR system in which Bozell/L.A. handles all buys for the teen market and national syndication, while Bohbot Communication’s San Francisco office buys the 6-11 demographic and all spot TV.
Previously, Bozell handled the lion’s share of Sega’s buying needs. Since last July, however, Bohbot has handled kid’s spot TV for the company.
Under the new arrangement, dubbed ‘demo max’ by Sega, creative shop Goodby, Berlin & Silverstein/S.F. will purchase print and take a leading role on planning. ‘Our system will focus on demographics rather than dayparts,’ Volkwein said. ‘It’s a bit of a renegade system. But we’ve had a lot of success doing the unexpected.’
Propelled by its Sonic the Hedgehog video game, Sega has been one of the hottest toy success stories in the 1990s. Retail sales have exploded from $400 million in 1990 to $730 million in 1991 to $1.65 billion last year. Volkwein predicts sales of $2.9 billion by year end.
Sega’s success traditionally has come from the teen market, particularly in the 12-17 age group. Nintendo, meanwhile, has cleaned up with the kid’s segment.
While teens will remain the focus of its media thrust, Sega wants to make more inroads with kids. According to one exec tied to the company spending on media targeted to kids will reach 10-30% of the overall ad budget this year.
Copyright Adweek L.P. (1993)