For the full year 2005, Nickelodeon’s ad revenue grew by double digits, and Cartoon Network’s increased in the high single digits. While Kraft lowered its spending at the two major children's networks, both General Mills and Kellogg, along with the larger players in the beleaguered toy industry, increased their kids’ TV dollars on those cable networks significantly, according to TNS Media Intelligence.
Last year the kids’ upfront market was up 5% at $890 million.
New broadcast players
This year Nickelodeon and Cartoon Network are joined by some new players. Nickelodeon used to supply Nick Jr. programming and ad sales efforts to corporate sibling CBS, a role now filled by DIC Entertainment. Cartoon Network used to do the same for its corporate sibling the WB, but the new CW network will handle its own ad sales. Fox has an agreement with 4 Kids Entertainment and there’s talk that NBC’s contract with NBC Universal sibling Discovery Kids is being redrawn after yielding woeful Saturday morning ratings; in recent weeks NBC has drawn a 0.5 average in viewers aged 2 to 11, less than a third of the 1.6 rating that ABC Kids, part of the Disney Channel empire, draws. (NBC and Discovery did not respond to calls for comment.)
Also out looking to sign marketers to its children's properties is PBS, which, like Disney Channel, signs corporate sponsors. A video-on-demand channel, PBS Kids Sprout, is now available on cable and satellite in 18 million homes.
Broadcasters, required to commit three hours a week to educational programming, are under pressure from local stations to do the bare minimum rather than the five or six hours they currently commit, since children's programming is a hard sell to local advertisers.
“It is very difficult and close to impossible to be successful if you’re just a part-time player,” said Jim Perry, senior VP-ad sales at Nickelodeon. “[Broadcasters] are there because they have to be there.”
CBS is employing a new tactic with new partner DIC, introducing shows such as “Where on Earth Is Carmen Sandiego?” that skew to an older, 6-to-11 audience, which Karl Kuechenmeister, senior VP-sales and marketing, called “larger and more salable” than the younger audience serviced by the former Nick Jr. block.
But while the players have been rearranged, it’s unlikely to have a huge effect on the kids’ market. According to a recent Magna Global ratings report, children spend about a half-hour a week -- just 4% of their total TV watching -- on network programming aimed at them, as opposed to more than eight hours watching ad-supported kids cable programming.
Nonendemic ad categories
While endemic categories have continued to grow, nonendemic categories have also provided fuel for cable. Nickelodeon began pursuing autos, travel and consumer-electronics categories six years ago; this year ABC Kids plans to go after nonendemic categories as well. The cable networks have also been aggressively offering up healthful living-and-eating initiatives for their food-marketing partners, who are under pressure from consumer groups and Capitol Hill to help curb childhood obesity rates.
“There’s a lot of opportunity to create messages in the food category that are responsible and relevant,” said Kim McQuilken, exec VP-ad sales for Cartoon Network.
"No one's really counting all the nonendemic business that's been flowing into the kids space," Mr. Perry said. "And it's significant, helping to drive this market."
Concerns among food marketers have upped the demand for programs that go beyond "spots and dots" and have incited networks to go to market with more grassroots-level promotional capabilities. Nick, for example, has its "Let's Just Play" initiative in which it encourages physical activity among its viewers. In September it launched a giveaway campaign that grants money to youth after-school and nutrition-based programs, and Kellogg's became the first food marketer to sign on as a sponsor.
Working with food partners
"One thing [the obesity controversy] has done is brought us a lot closer to our food partners," Mr. Perry said. "We've spent the last two years working diligently to try to find a solution."
Cartoon Network has similar initiatives and has bulked up its sales staff in Chicago and Los Angeles in order to, Mr. McQuiklen said, "roll up our sleeves and get closer to the clients and agencies in the market." He estimates about 75% of its advertisers are in one way or another involved in a promotional campaign.
As promotions continue to grow in popularity, networks like Disney Channel, PBS and PBS Kids Sprout, which will participate in the upfront for the first time this year, stand to benefit since they don't sell traditional 30-second spots but instead sell sponsorships for their programs.
Sponsors for PBS, Disney
General Mills sponsored all the elements -- from podcasts to digital music downloads to on-air billboards -- related to the Disney Channel's popular original movie, "High School Musical," as part of the cereal maker's "Choose Breakfast" campaign. Tricia Wilbur, senior VP-sales and promotion at Disney ABC Cable Networks Group, presented the case study at her network group's children's upfront presentation and expects to do similar promotions with upcoming movies "Wendy Wu: Homecoming Warrior" and "The Cheetah Girls 2."
PBS, meanwhile, just signed Rhode Island-based Stonyfield Yogurt as a sponsor of "Barney." The sponsorship begins March 20. The show is also supported by Chuck E. Cheese. Sony Electronics Group also signed up to support a new show, "It's a Big Big World," to promote its camcorder products. Jay Campbell, who sells a variety of PBS Kids shows through his own firm, CAV Program Sponsorships, Hillsdale, N.J., said he is also out looking for an airline to sponsor "JJ the Jet Plane" and to replace Amtrak on "Thomas the Tank Engine." Mr. Campbell said ads bookend the shows and look to target young families rather than pre-schoolers directly.