BRAND LOYALTY AT STAKE ONLINE WITH KIDS

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Kids love to play games.

And that's become the trigger to help marketers reach kids online.

But the games better meet parental approval, because often parents and children will surf together.

"The key difference is that parents are the gatekeepers here," says Kate Delhagen, a new-media analyst for East Coast research company Forrester Research.

Ms. Delhagen estimates there are about 10 million kids under 12 with home PCs and more than 3 million in homes with online access. According to research by Forrester, these numbers are likely to increase a third or more by 2000. In addition, many other children use computers in schools.

"These kids, though relatively few, tend to be a very important segment," Ms. Delhagen said. "They are 'first-on-the-block' kids."

Importantly, online sales offer marketers a chance to build brand loyalty with the next generation of consumers.

COULD GET CAUGHT SHORT

"Those marketers not looking at this dynamic will get caught short in four to five years," Ms. Delhagen said.

To capture the attention of these youngsters, site developers are finding games or "activity-based" offerings to attract youngsters, says Conall Ryan, president of Houghton Mifflin Interactive, publisher of CD-ROM products based on books.

SOMETHING FOR MOM AND DAD

Realizing the role parents play in children's use of Web content, most sites are also making sure to include something for adults.

"We think if we can find parents, they'll bring in the kids," says Chuck Davis, senior VP-marketing for Disney Online. "We call it 'lap-surfing.' "

Disney emphasizes that its two sites, www.disney.com and www.family.com, are specifically targeted to families and not just children.

Companies such as NetPlay also believe in attracting the whole family. NetPlay has set up The NetPlay Games Club (www.netplay.com), which offers mostly multiplayer activities for kids and adults such as trivia or card games such as Crazy 8s.

PACKAGES SET

Advertising options that will offer advertisers a package for $45,000 per quarter are now in test; the packages include category exclusive sponsorship of a site. Broderbund Software and AST Computer are advertising in the pilot.

In the Crazy 8s game, for example, Broderbund places its logo on the back of cards. They have a Carmen Sandiego character peering through a window in the background.

Michael Murry, Broderbund managing director of online ventures, appreciates NetPlay's site for allowing "unobtrusive placement of ads." He advertises because the content attracts families, important to Broderbund's efforts to sell products to children and adults.

Other options for advertisers include 30-second animated ads that run on the top of the screen. The ads can sell separately for $10 per 1,000 exposures. Advertisers will be able to target ads to demographics, NetPlay claims.

Jeff Herscovitz, VP-marketing and sales for NetPlay, says the company also plans to offer couponing and direct-selling via e-mail, an option Mr. Murry says is attractive to Broderbund.

One of the oldest sites dedicated to children, KidsCom (www.kidscom.com), offers many games, but mostly focuses on educating as well as entertaining.

Jorian Clarke, president of KidsCom Co., said the site has features such as writing contests, chat areas and surveys. The site has also set up a companion site for parents.

KidsCom started selling ads for the site in December.

So far, advertisers include Burst chewing gum and Reader's Digest's LookSmart, a new family-friendly Internet directory www.looksmart.com.

DEMOGRAPHIC FIT

LookSmart advertises with KidsCom because its editorial offering and demographic selection fits with LookSmart's target audience, says David Dubbs, VP-marketing, LookSmart.

"I think the lines between what's advertising and editorial is not well-established on the net. But KidsCom does a good job of that," says Mr. Dubbs.

Ms. Clark says her company has moved slowly on advertising for fear of offending both parents and teachers, who use the site for classroom activities.

Currently the site offers "spontizements," which are 30-to-45-second animated ads that play only when a page is first opened. All ads are also accompanied by an "ad bug"-an animated character that appears to indicate to children the nature of the content.

Ads on KidsCom cost $3,000 for 35,000 guaranteed impressions.

SLOW GOING

Concerns about protecting children have slowed marketing opportunities on the Web. America Online, for example, has moved cautiously to develop advertising opportunities for its "Kids Only" section. The AOL area, which targets 6-to-12-year-olds, offers no advertising at game pages.

Wally O'Brien, president of National Advertising Review Council, says the two biggest issues regarding children on the Internet are the blurring of advertising with editorial content and privacy.

The organization plans to release its first set of guidelines about online advertising to children sometime later this year.

"We want kids to be able to distinguish what is happening at all times," Mr.

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