13 minute read
Feature - Pre-Christmas Marketing
Making the most of the Golden Quarter
With the festive period looming, companies are now deciding how to approach their pre-Christmas marketing campaigns, deliberating on where to invest in order to gain the biggest reach to both children and parents. Toy World spoke with a range of experts from Generation Media, Havas Entertainment, KidsKnowBest and SuperAwesome to get to the bottom of toy companies’ Q4 marketing campaigns.
For the average consumer, the upcoming months that lead to the end of 2024 are filled with holiday fun. For toy companies, it is a crucial time of the year, due to the huge increase in consumer spending.
To maximise being at the forefront of people’s minds during the busy holiday season, many toy companies look to have a prolonged period for their pre-Christmas marketing campaigns. The timing of these campaigns has become a big conundrum for toy companies, according to Tristan Brooks, managing partner at Havas, as many have have seen their marketing budgets decline. This means that when to invest becomes a bigger decision than before, trying to make their investment work as hard as possible, but at the same time not spreading advertising too thinly to be effective.
“There’s a strong argument to begin campaigns earlier, when there’s less advertising ‘noise’, if you’re bringing a new product to market or for those hero higher-priced items to create excitement before the competition,” explains Tristan. “The likelihood this year is we’ll see toy purchasing later as consumers hold off spending until after Halloween, and many will be looking for deals.” Because of this, many toy advertisers are likely to be focusing their campaigns a little later this year.
Joel Silverman, CEO and co-founder of KidsKnowBest, echoes this, stating that toy companies are generally aligning their Christmas marketing campaigns to start later this year, influenced by several factors. “There's a growing need for agility as consumer attention becomes increasingly fragmented across various social platforms and channels,” says Joel. This necessitates campaigns that can be quickly adapted to changing trends and consumer behaviours.
With a heightened uncertainty around Q4 this year, retailers are taking longer to make commitments, due to concerns over sell-through rates and the ongoing challenges with supply chains, including the rising costs of containers. “This caution from retailers is pushing toy companies to hold off on committing to their advertising until they have more clarity on what products will be available and in demand,” adds Joel. As a result, there are trends that skew towards later campaign start dates, as brands seek to ensure their marketing efforts are both timely and effective in driving sales during the critical shopping period.
Marketing strategies are unique to a brand’s individual challenges and will be impacted by the decision to focus on either sell-in or sell-through. Newer brands will be engaging with audiences earlier in the season to build lower cost brand awareness, as well as demonstrate to retailers that Q4 orders can be fulfilled. “More established brands, however, will potentially have the luxury of being able to reserve budgets until the peak sales period leading up to and beyond Black Friday,” states Generation Media’s director of Investment, Jonathan Chambers.
Another aspect to focus on when considering campaign phasing is media channel selection. “For example, with the inflation in Linear TV pricing over the past three to five years, it is no longer the first choice on many plans, particularly when it comes to October/ November,” Jonathan says. “Instead, we are seeing a pattern of advertisers spending a higher percentage of their budget on TV in September, before up-weighting YouTube and Gaming in Q4.”
Although sales might not be as immediate in September/October compared to November/December, there is still much value in advertising. TGI, a consumer trends study which surveys over 24,000 UK respondents, reported that 26% of UK parents and grandparents start planning Christmas purchases in September/October, compared to 33% for November/December. “Amazingly, over 40% are planning even earlier,” adds Jonathan.
When looking at the scale of media budgets versus the cost of advertising, Lee Veitch, co-founder and managing director of SuperAwesome, has seen the average deal size grow within the toy space. “We’ve seen brands demand campaigns that span digital platforms to ensure that they can reach the right volumes of kids to help them sell through their brands,” he tells us.
“For example, we’re seeing toy brands really embrace multi-platform campaigns. They understand it’s not enough to just reach kids across one platform in this hyper-fragmented era of kids, so they want to run across VOD, YouTube, apps, Roblox etc, all in one buy.”
Jonathan has seen the opposite. According to his research, reported ad spend in H1 2024 was down a reported -18% year-on-year (Nielsen AdIntel), and although H2 accounts for over 70% of the total, it is unlikely that it will recover to full year growth by the end of 2024. The latest data from Circana has also indicated that whilst there are some positive signs, toy sales have not recovered to the extent that many advertisers will be keen to increase spend year-on-year.
“Lack of budget increases will create some opportunity in the market, however,” explains Jonathan. Most media in the UK is traded on a supply versus demand basis. “Whilst Linear TV continues to struggle to meet demand, given the continued falling audiences (children’s commercial TV finished H1 -37% down yearon-year according to BARB data), areas in growth such as YouTube and Gaming could provide opportunities to hold or even lower costs year-on-year and provide great value for advertisers. However, this all needs to be caveated against the long-term trends.”
When one considers that consumers are having to contend with the ongoing cost-of-living crisis, companies are expecting potentially smaller budgets to deliver similar results with audiences that are less ready to spend. This all means that budgets have to worker smarter and harder than ever.
Joel agrees that media budgets are generally not seeing significant increases this year. Instead, he is seeing a more strategic allocation of these budgets across a broader range of channels to reach both core and affinity audiences effectively. “Every pound or dollar invested is now expected to deliver more substantial returns,” he says, “making ROI a critical focus for brands.”
This shift is driven by a growing emphasis on performance marketing over traditional brand-building efforts. As above-the-line TV advertising continues to decline, brands are increasingly prioritising metricsdriven strategies that offer clear, measurable results. “This trend is evident not just in the toy industry, but across various sectors. For instance, Nike notably shifted more of its budget towards performance marketing, focusing on direct consumer engagement through digital channels, rather than traditional brand advertising.”
As a result, media strategies are becoming more data-driven, with a stronger focus on metrics that demonstrate tangible ROI. Joel states: “Creativity and brand messaging remain important, but there’s pressure to deliver quantifiable results, leading brands to carefully consider how and where they allocate their media spend.”
There are a variety of avenues that this media spend can go to, but one common ground for many companies is the importance of YouTube.
“In broad terms, the majority of media investment is now in digital media (c.70%),” says Tristan. “Linear TV and Kids TV is declining in spend share as audiences
migrate away, however the power of TV as a medium remains undiminished. It’s just the delivery routes through the TV screen that has changed overtime. YouTube has picked up much of the migrating spend from Linear and Kids TV.”
SuperAwesome has seen more companies adopting a multi-platform approach, which ensures that toy companies are reaching a large enough number of their target audience to really connect with this generation of kids and ultimately sell their products.
“This multi-platform approach has seen brands really push to ensure they have a good share of their voice across several platforms,” points out Lee. “The big one we’ve seen investment placed on in a much bigger way this year is YouTube Kids. Our YouTube Kids marketplace was new for 2024, and through this, we’re able to reach huge numbers of three to seven-year-olds across several YouTube Kids partners.”
Generation Media has predicted that YouTube will be dominant in Q4 2024, as it has been for the past few years. “According to the latest data from Giraffe Insight’s Kids and the Screen Study, over 50% of four to nine-yearolds’ commercial viewing time in the UK is to online video platforms, of which YouTube and YouTube Kids accounts for over 90%,” says Jonathan. “The pricing and reach advantages it offers advertisers in Q4 are hard to ignore.”
The company estimates that Digital media accounted for 58% of total Toys & Games media spend in H1, with Linear TV accounting for 36%. By the end of 2024, Generation Media expects that Digital will account for c.68%, Linear TV 26% and everything else 6%.
Outside of YouTube and Linear TV, Gaming formats will also be hugely popular. “Advertisers have spent the past few years testing the format to good effect, and the scale of the opportunity continues to increase – as does the innovation,” says Jonathan.
While many toy companies are placing their investment into media like YouTube, at KidsKnowBest, Joel is concerned that a primary focus on performance marketing may be coming at the expense of brandbuilding efforts, particularly in areas like packaging design, which plays a crucial role in the consumer decision-making process. “Toy companies are increasingly channelling their investments into performance media, driven by the demand for measurable results and a more data-driven approach to marketing,” says Joel. “In an environment where getting eyeballs onto shelves is more challenging than ever, outstanding packaging is essential to capture attention and convey the brand's value proposition effectively.”
He continues: “Packaging isn't just a functional aspect of the product – it's a key component of the overall marketing strategy. When done well, it serves as a powerful extension of a brand's advertising efforts, ensuring that the impact of digital and performancedriven campaigns carries through to the point of sale. As the market becomes increasingly competitive, it’s vital that toy companies balance their investment in performance media with their overall brand-building strategy.”
With this increase in media spending, is Linear TV still an attractive spending option, despite its year-onyear declines in viewing? The consensus appears to be that there is now a lack of audience and not enough return compared to the amount invested.
“We’ve seen a decade of Linear Kids TV prices inflating as demand remained strong and audiences declined,” says Tristan. “We’re now at a point where the cost of the media is on parity with other higher reaching media like YouTube. I think we have to move away from focusing on Linear TV too much; it focuses on a decreasing audience rather than seeing TV media encompassing a broad selection of potential routes to consumers.”
Kids TV is often considered a cheaper option in comparison to other TV media. However, the kids’ audience reach is small and decreasing, so instead of being the lead media, Kids Linear TV should supplement other media strategies, otherwise there is a risk of overinvesting by reaching the same small TV audience many times, oversaturating that audience at high cost, especially over October and November.
Jonathan agrees with this. “From September onwards, the cost advantage that Linear TV previously enjoyed for years is no longer evident. YouTube and Gaming formats for example can be traded at a lower equivalent cost per thousand during October/November, dependent on the children’s demographic.”
Beyond the cost factor, the biggest limiting factor for Linear TV is the reach it can offer advertisers. Whilst over 80% of four to nine-year-olds access YouTube regularly and over 70% play games, according to the Childwise Monitor Report 2024, a Linear TV campaign will struggle to achieve more than 30% coverage for a given children’s audience (based on the latest BARB figures). “For example, the largest Toys & Games campaign of H1 2024 achieved c.495 CH4-9 TVRs, but only 30.6% 1+ coverage,” says Jonathan. “Therefore, even if the cost of TV was lowered significantly, brands would need to continue to invest elsewhere in order to reach critical mass for their given target audiences.”
From Lee’s point of view, despite the continued decline in Linear TV, the pricing in Q4 makes it untenable to invest during that period. “We’re seeing brand partners say they are doing very little Linear TV advertising as a result, or none in some cases, as they just cannot reach enough kids to justify their investment.”
There are numerous routes to consumers, from ingame advertising and YouTube pre-roll to targeted social media and more. With so many options to choose from, it leads to some companies underutilising certain key players.
“In the current challenging climate, the default is to focus on what you think or know works, rather than testing something new or spreading yourself too thinly beyond your ‘core’ media,” says Tristan. In his opinion, this means there will be a growing number of advertisers showing up in the same media places, creating clutter. This is where messaging and creative tailoring for each platform becomes even more relevant as growing numbers of advertisers vie for the same consumers attention.
The other way to gain attention is go where the competition isn’t. “I think Out of Home Media is particularly underused in the category as investment, and focus has shifted from Kids TV to YouTube and social media,” adds Tristan. “As digital Out of Home inventory grows, it is making it more accessible for toy companies with declining production costs.”
Gaining attention is becoming harder as budgets migrate to media on which ads are often more skippable and avoidable. Having a captive audience to market is so important. “If you chase eyeballs, you risk oversimplifying or missing the opportunity by focusing on volume over engagement,” says Tristan. “Sometimes less is more, focusing on your core audience in a really engaging and motivating way rather than trying to max your reach.”
Joel believes that there’s a need for greater investment in building brand longevity. “Many companies focus too much on immediate success,” he says. “They’re neglecting the long-term benefits of establishing a brand across multiple touchpoints.”
Despite seeing a high investment placed on YouTube Kids, Lee does think that at scale, it is still underutilised. “We see brands working in low-scale ways, with one partner here or one partner there and small investments, but brands should be more adventurous and invest larger budgets at scale.”
Based upon the toy marketing landscape as it currently stands, Jonathan has offered some words of wisdom on the Q4 marketing campaigns for this year. “Modern marketing plans are best laid on the foundations of insight, value and agility,” he says. “Decisions made up to this point in the year will have been made based upon the known variables. However, as the peak season progresses, there will be a change.
“Some media channels might be challenged, be that Linear TV suffering audience declines or dynamic pricing platforms such as Meta seeing peaks and troughs based on demand. Opportunities will also present themselves which might offer greater value to brands. Therefore, be open to new opportunities which could increment your existing plans, as these might make the difference between a good and great year end.”
Over the coming pages, Toy World catches up with a number of major players within the toy industry and finds out how they are choosing to market their lines this festive season.
