The Kids Are Alright

Tuesday, April 14th, 2009
By Anita Frazier, Entertainment Industry Analyst Toys & Video Games

Kids.  I spend a lot of time thinking about them.  Not only do I have four of my own under the age of 12, but the two industries I cover count kids as a primary target audience:  33% of video game industry dollar sales since May ‘08 have been spent against kids ages 14 and under while this same group comprised 82% of 2008 toy industry dollar sales.  With both of these industries representing approximately $22 billion in annual sales; that’s a lot of spending influenced by kids across those two industries alone. 

But clearly spending against kids spans so many more areas including apparel, consumer electronics, movies, books, room decor, and music, just to name a few.  In fact, during the 2008 holiday season, spending on the combined video game hardware and content categories comprised the largest spend on kids, followed by toys & games, and then apparel, according to NPD’s Spotlight on Kids: Understanding Cross-Category Purchasing report.  And, like us adults, the way we’re spending our money doesn’t tell the complete picture.  The way we’re spending our free time is important to understand as well in order to drive product and marketing decisions.  And the same is true for kids.  The major difference with kids is that they have a lot more free time than most adults do, and are always looking for new ways to fill that time, which is why in many cases, kids, particularly those on the older end of the spectrum, can be true early adopters and evangelists for new products and services.  Take Facebook as an example.  First intended for college-aged kids, which then quickly filtered down to high school aged aspirators, now the biggest growing audience sector for the site is us older folks.  And while that one example pertains to kids older than the 14-and under crowd I started this blog by talking about, it’s a high- profile example of the impact that youth and the youth culture can have on society at large. 

Kids may be one of the growth opportunities for various companies and industries so it’s really important to know how they’re spending their time and how money is being spent on them.  The mix of influence between these two aspects may be very different for any individual company.  Take TV for example.  While TV content is still largely enjoyed for free, the fact is that watching TV still commands the greatest share of a kids’ leisure time, as evidence by our Kids Leisure Time study.  This example illustrates that how and what kids are watching on TV (or TV content via a website which is an emerging trend) still plays a significant role in marketing to kids.  And the relative importance of knowing how money is spent against kids versus how they’re spending their free time (and how that has changed over time) is probably very different even within one company depending on if the current initiative is more one of product planning/strategy or if it’s executing marketing plans and tactics against products, whether new or more established brands.  Companies, services, brands, and properties,  much like the people they’re trying to service, are clearly multi-faceted and the information needs they have vary depending at what point they are in their product lifecycle.  One-size does not fit all kids, or the companies that serve them. Engage them now so they can grow with you in the years to come.

2 Comments

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  By Margaret Johnson, April 17, 2009 @ 11:51 am

  What a relief to hear the kids market is a growth area! I’m a mom of two that runs a company which shipped our first game - ItzaBitza (http://ItzaBitza.com). I got fed up with the video games available for my kids (they played Xbox games - inappropriate I might add). I’m thrilled the game has been receiving such positive reviews - including recently receiving the Parents’ Choice Foundation Gold Medal.

  The challenge we have as positive providers of games is we’re the best kept secret!

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