Comprising the Viacom Kids and Family Group (which includes Nickelodeon, Nick Jr., Nick.com and Nick Magazine), the deal was based on quarter-hour program ratings and includes a series of joint research projects set for late 2007 and early 2008 that Starcom will use to illuminate children's changing media consumption.
Kellogg part of deal
The deal encompasses five key Starcom kids' clients, including Kellogg, the latest marketer to alter its ad spend in the wake of the Federal Communications Commission's crackdown on obesity. Last week, the food company announced it would put some $200 million of its ad dollars in limbo after cereals such as Rice Krispies and Froot Loops were brought under fire for their high sugar and sodium content, yet its relationship with Nickelodeon remains healthy. Of the $157 million Kellogg spent in cable TV last year, as much as half of that likely went to Nickelodeon, which made $94.4 million in cereal dollars last year, according to TNS Media Intelligence.
The deal with Starcom is estimated to be worth up to $150 million, based on cable ad spending from the participating marketers in 2006 -- a nice chunk for a network that took in nearly $967 million that same year. Other clients are Nintendo, Lego, Chuck E. Cheese and Buena Vista.
Though marketers such as Kraft and General Mills have pulled back their spending based on the same FCC concerns, Nick's sales chief, Jim Perry, said he has never taken a Chicken Little stance on the future of ad dollars aimed at the under-18 set.
The sky is just fine
"One could read [what's going on] as 'the sky is falling' within the world of the kids' marketplace," Mr. Perry said. "We take the issue very seriously, but some remarks that the business is collapsing is humorous to us because we've been working with partners around the obesity, health and wellness issue for the last two and a half to three years."
But one reason Mr. Perry isn't panicking is because he has worked to bring marketers to the network from a wide swath of categories since 2000. Such deals are keeping Nick at the top of the ad-supported kids cable heap, with revenues on a rapid increase from $711 million in 2004 to nearly $967 million in 2006, according to TNS Media Intelligence. The Viacom cabler's closest competitor, Cartoon Network, finished last year with $398 million by comparison, itself on an upswing since taking in $185.8 million in 2002.
"It's not just the food companies working through [the obesity] issue," Mr. Perry said. "It's the media companies, the toy companies. If you see what's going on with Nerf, Super Soaker, Speed Stacking, Skip-It, there's a lot of new products out there that are also working to help solve this issue."
Chrysler's Jimmy Neutron effort
Automotive has also discovered that pitching kids is a good way to pitch parents. Beginning this week, Chrysler will become the latest advertiser to sign on for a fully-integrated, "multi-splatform" partnership, as Nick likes to call it. The deal extends across the entire suite of family-friendly brands such as Nick, Nick Jr., Nick at Nite, GoCityKids, ParentsConnect and its latest branded venture, Nick Hotel. The campaign is in support of Chrysler's Town and Country minivan, which comes equipped with features like a Sirius backseat TV and seats that swivel 180 degrees. Popular Nick animated character Jimmy Neutron will star throughout the campaign's ads, expected to start hitting in fourth-quarter.
It's the 10th such deal Mr. Perry has done with an automotive company. Chrysler's marketing chief, Dave Rooney, is just happy to have a spokesperson more likely to reach kids and their families than Celine Dion ever did.
"There's a lot of very cool inventions and gadgets that are a part of the minivan that are the exact same kind of things Jimmy [Neutron] and his characters are doing," Mr. Rooney said. "It's a very intelligent message for families and kids who appreciate more science-oriented messaging that supports engineering and innovation."
Travel and restaurants have both been increasingly large categories for the network over the last six years, with destination-based travel marketers such as Bahamas and the Cayman Islands being added to the usual hotel roundup, and food advertisers extending beyond McDonald's and Burger King into Denny's, Wendy's, Sonic and, most recently, Cici's Pizza. Beyond video games, consumer electronics is playing a larger role as well thanks to marketers such as Microsoft, Dell, Epson and Hewlett Packard.