Opinion - Generation Media

New year, new marketing strategy?

As marketing decisions need to be weighed more carefully than ever, Jonathan explores how the latest trends should feature in toy companies’ plans for their 2024 strategy.

In the ever-evolving world of entertainment options for children and parents alike, marketers are facing exciting challenges and opportunities when it comes to capturing attention and conversion. As we enter 2024, there are several noteworthy trends that will reshape how the toy industry approaches marketing, leveraging cutting edge techniques and embracing new platforms. Toy companies should be considering how these should feature in plans for 2024 marketing.

The power of Short Form content

More children aged 2-12 use YouTube Shorts (33%) than TikTok (31%) to consume short form content (Giraffe Insights, Little Voices, 2023). The popularity of Short Form content should not come as a surprise to anyone. TikTok’s restriction on targeting children’s audiences has meant that up to now, Short Form video has not been a substantial portion of marketing spend. With YouTube Shorts now firmly established, and in terms of children emerging as the market leader, we can expect that to change. Beta testing of advertising formats on YouTube Shorts took place during 2023 with a full launch expected in 2024. With YouTube already dominating viewing behaviour, and accounting for the largest proportion of toy marketing spend in the UK and globally, diversifying this investment across new formats is a sensible option (dependent on objectives and KPIs)especially when you consider that the latest research from Giraffe Insights indicates that as much as 20% of total YouTube viewing now takes place on Shorts (2-12 year olds).

One of the challenges in adopting short form content will be ensuring that brands have creative that fits. Longer form style TVCs aren’t designed for Short Form platforms and can negatively disrupt viewing experiences, whereas the benefits of adapting creatives for a specific platform are clear.

For example, TikTok reports that TikTok-first ads result in an average +3 seconds watch time, +25% in completion rate and provide a 1.2x multiplier on positive sentiment.

Harnessing generative AI to enhance creative output

37% of advertising and marketing professionals (globally) have seen their work impacted by generative AI, the most of any industry polled (Exploding Topics, November 2023). Designing creatives specific to platform may appear to be some form of marketing utopia, given the additional admin and costs this usually incurs. However in the age of generative AI, we can expect this process to become smoother and more cost efficient in 2024 and beyond.

Major platforms such as Google and Meta are continually updating their suite of tools to help marketers adapt existing creative, or even build from scratch using proprietary generative AI tech. Perhaps more important is the advent of independent technology companies providing a more unilateral approach. Adoption of such technologies will allow marketers to execute more sophisticated Digital campaigns in multiple ways, including reduced costs, increased speed of execution and distribution, bespoke adaptation to platform requirements and micro adaptations to allow for enhanced A/B testing and reporting through dynamic creative (i.e. background colour changes, text adaptations, etc.)

We have been working with and testing a number of partners in this space over the past few months and will be partnering with the best of these in 2024 to launch Optimus Create, the latest addition to our Optimus AI suite of planning and buying tools.

Deflation in “TV” pricing and incremental reach opportunities

Linear TV is the lead media for the morning timeslot, which accounts for 28% of all ad recall by 2-12 year olds (Giraffe Insights, Kids and the Screen, 2023). Investment in Linear TV has steadily declined year-on-year-on-year, with viewing declines and the resultant inflation in costs the primary driving factors. However when conducting sales analyses for toy brands, one of the most consistent inclusions in the marketing mix for successful brands is Linear TV. 2024 will not yield a significant growth in viewing, and overall coverage will still be limited to 25%35% dependent on target audience and investment. However, demand for airtime has reduced to the point where we are expecting the cost of Linear TV to decline in 2024. This will not result in huge percentage shifts in spend away from YouTube and other Digital platforms but may increase TV’s share of overall spend by as much as 5 percentage points, compared to the low point of 2023 when it is estimated to have accounted for around 30% of total toy ad spend.

In the modern media landscape, “TV” accounts for a lot more than Linear. Streaming services such as Disney+, Amazon Prime and Netflix will feature more heavily as ad funded subscriptions - and therefore inventory levels - increase. FAST (Free Ad Supported Television) channels such as Moochi are launching, replicating the linear experience on screen and increasing eyeballs on the TV set. Then there is also the already plentiful AVOD market (Kidoodle, Ketchup and the like) and Broadcaster funded propositions like ITVX (which according to Giraffe’s Kids and the Screen data enjoyed a very strong launch in Q4 2023), meaning accessibility is increasing all the time. With many households cutting the cord and opting out of expensive subscriptions, usage of these free services is on the rise, providing incremental reach to advertisers compared to when they were in their infancy as frequency drivers.

Amazon to protect retail media dominance through Social partnerships Amazon’s advertising business is predicted to turnover $53b in 2024 – larger than the global Audio and OOH media markets combined (WARC). The digital retail media landscape, dominated by Amazon, continues to expand beyond its traditional roots in sponsored product ads. By more effectively leveraging its rich first party data to enhance targeting on its DSP product, Amazon is commanding a larger share of total marketing budget. However, beyond its own real estate, Amazon has been making moves through a series of partnerships with Social Media giants to ensure it emerges victorious in the Social Commerce space too.

TikTok Shop demonstrated strong growth in 2023, providing younger audiences with a less disruptive e-commerce experience, which is why Amazon has moved fast to announce partnerships with Meta, Snap and Pinterest, allowing for in-app purchase experiences. This allows Amazon to enter the Social Commerce space without the expense of launching a Social Media platform. By linking Amazon with a Facebook or Instagram account for example, users will be able to shop through the Social apps, checking out with saved Amazon payment information. This will allow advertisers to directly attribute sales to these platforms and design increasingly efficient campaigns.

Level up your engagement with Gaming

Over 80% of 7-9 year olds play video games, with more than 50% of boys 7-9 playing for more than 10 hours per week (Youth TGI, 2023). This means the advertising world has opened up to Gaming as a media channel worthy of attention and investment. The advantage for brands targeting children’s audiences is that the majority of the most popular games offer fully formed commercial propositions. According to Childwise’s The Monitor Report 2023, Roblox and Minecraft are the two most played games for 7-10 year olds. Both offer brands multiple ways to legitimately engage with audiences. At the most cost-effective end of the spectrum, in-app video provides brands with incremental reach for video campaigns. Programmatic display opportunities using in game Digital billboards will also become more commonplace for branding campaigns.

At the opposite end of the cost scale, we can expect to see more bespoke, immersive experiences appear on Roblox and Fortnite. Lego Fortnite might be the extreme (and for most, unattainable) version of this, but brands with global reach should be considering creating branded games where budget allows (and targeting makes sense). Seven of the top 10 branded games on Roblox in November 2023 were associated with kid focused brands; Barbie took the top spot with almost 40m monthly visits and an average playtime of 16 minutes (Metaverse Marcom). It might be expensive, but that kind of attention is becoming increasingly hard to achieve in the fragmented world of Digital media.

Attention: the new currency for the Digital age

On average, an ad requires 8+ attentive seconds in order to have a significant impact on purchase intent (Lumen, Teads, Attention Outcomes Report, 2023). Capturing and retaining attention is the ultimate challenge in the Digital age. Studies from companies such as Lumen are providing evidence that in order to impact higher and lower funnel metrics, different levels of attention are required. For example, spontaneous brand awareness can be achieved with as little as one second of attention paid to an ad. However to impact purchase intent it takes on average eight or more seconds. In 2024, expect to see more media providers include attention studies in their sell, or even sell inventory based on attention metrics, in order to differentiate the value of their impression or view. This new way of assessing the value of media will gain more traction in 2024 and beyond, but brands need to beware the pricing premiums often associated with purchasing media in this way. Brands also need to determine the right type of attention for their objectives pre-campaign and align channel selection with this. For example, audiences viewing short form content are looking for entertainment in short bursts of intense attention, whereas audiences on streaming platforms are more likely to be paying passive attention, meaning messages need to be tailored accordingly.

Data, data, data

Google accounts for more than 90% of global searches (Similarweb.com). At long last, Google will finally retire third party cookies in 2024 (unless there is yet another delay) and for those targeting children, there should be little change as a result, given that children’s audience do not officially exist online. This is why we have built sophisticated contextual targeting strategies to minimise wastage for our advertisers. In many ways, toy brands will have an advantage over other industries when it comes to Digital advertising in this regard.

Modern targeting strategies for toy brands encompass much more than kids, with parents and gifters increasingly targeted due to the ability to drive online conversion. In 2024, marketers should ensure strong partnerships with platforms with an abundance of reliable first party data (such as the Social platforms), and programmatic partners that leverage data from multiple sources such as Search intent from Captify or Automatic Content Recognition (ACR) from Samba TV. The richer the data source, the greater the ability to identify the right consumer, at the right time.

Media fragmentation is inevitable, and 2024 will present more opportunities than ever before for advertisers. As the year will also provide challenges for many at retail, marketing decisions need to be weighed more carefully than ever. However there are some calculated strategic risks that will be worth taking, dependent on budget and objectives. To help tailor your approach to 2024, get in touch with Generation Media to learn more.