MARKETING TO KIDS: IN TUNE WITH HIGH-TECH AS EARLY AS 2, YOUNGSTERS CONTROL FUTURE OF MARKET SUCCESS

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Eight-year-old Matthew asks mom to increase his weekly allowance from $3 to $5. After some family haggling, they agree on the terms and mom calls Allowance Express to authorize an increase on Matthew's personal debit card. He then adjusts the personal piggy-bank program on his computer to reflect the increase and e-mails the news of his successful negotiation to his buddy Mark. They plan an indulgent Saturday afternoon of shopping for new CD-ROM games.

While still fictional, this scenario isn't inconceivable as advances in technology are opening doors for children to become increasingly formidable consumers in the high-tech arena.

U.S. Census Bureau figures predicted the number of children age 4 to 12 would reach 34 million by the middle of this decade. But it's not only the size of the children's population that has some marketers hooked. When it comes to selling high-tech products, the kids' market becomes disproportionately important because youngsters are the early adopters of technology, says Paul Kurnit, president-CEO of agency Griffin Bacal, New York.

Kids spend $1 billion of their own money on various electronics products, he points out, including videogames, TVs, stereos, CDs and computer games.

Adults, frequently boondoggled by tasks such as setting the clock on the VCR or loading computer software, often don't realize that, in general, kids are hip to technology as early as age 2.

That fact is being used to sell high-tech products to parents.

In "Bedtime," a 30-second spot by Ammirati & Puris/Lintas for Compaq Computer Corp., a father tells his little girl that after she's brushed her teeth, she can use the family computer.

"They don't have to be taught a lot. They can figure it out," says Mr. Kurnit.

Not only do kids adapt easily to high-tech products, but that exposure is influencing the way they process information, including ads, says Dave Siegel, VP-director of consumer product accounts, Sive/ Young & Rubicam, Cincinnati.

Mr. Siegel, who also teaches consumer behavior at Northern Kentucky University, is embarking on a study with professors from the University of Cincinnati. Among some of the findings they anticipate the study will show: Kids pick more out of the air than adults realize.

"They are like little computers. They are seeing things [on computers and videogame screens], and they take the process along when they do math and when they see an advertisement.... They think so fast and see things further down the line. They see details like crazy," Mr. Siegel says. "When we show kids an ad, they pick up everything."

Mr. Siegel says they're also learning a lot on their own. He notes that 30% of all kids have one parent; two-thirds have a working mom; and most kids age 6 and up spend at least two hours a day at home alone. In addition, children as a rule have fewer brothers and sisters than previous generations.

While kids spend a total of about $7.5 billion a year, they are influencing $130 billion of their parents' annual spending, says Julie Halpin, account director for Saatchi Kid Connection, New York. This has become important for high-tech marketers because children are being exposed to computer technology right out of infancy.

Among 2,100 children age 6 to 12 polled for Simmons Market Research Bureau's Kids Study 1993, 68% said they use a personal computer at home or school, 29% said they used a personal computer at home in the last week, and 19% said they used the computer and an online service in the past week.

Kelly Sirimoglu, product manager of the Simmons study, says she thinks the new 1995 study will show increases in these areas.

"Online services such as Prodigy and America Online have increased growth tremendously, especially among families with children," she says. "We expect to see those categories do well with children in the future."

A separate study, conducted in 1994 by Zandl Group, showed that of 300 8-to-12-year-olds interviewed in U.S. shopping malls, 91% use computers at school, 51% have computers at home and 16% use online services at home.

The study also showed that 50% of those surveyed used computers to play games, while 10% used the computers for homework.

Mr. Kurnit says he expects to see a big change in two areas of the kids market: communications and translation of adult products for kids' use.

"We are seeing a big installed base of kids using Prodigy and America Online. It's the idea that kids can use computers for what they used to use telephones for. For the price of a local phone call, they can communicate with kids all over the world. It is tremendously powerful in a real sense. The Internet has fulfilled the global village-it is here," Mr. Kurnit says, contending that kids are logging on as soon as they can hunt and peck on the keyboard.

Nonetheless, experts agree that while they know kids are mastering new technology as quickly as it speeds down the superhighway, they are at a loss as to what it all means for the future.

To help figure it all out, Saatchi & Saatchi Advertising's Interactive Plus Unit is about to launch a study that will begin by using cultural anthropologists to observe how families with children under age 10 use multimedia PCs.

Myra Stark, director of creative research and consumer insights for Saatchi & Saatchi PR's strategic planning department, says the study will explore issues specific to children such as: the differences between children and adults in interactive use; the family dynamics of different learning curves; how kids express developmental life-stage issues in the online environment.

"We know mastery is an important motivator for children. If that is satisfied online, then, if I were going to develop a product, I would build that in. There's a lot of interest from marketers in knowing this information," Ms. Halpin says.

"We're on the verge of something that's going to have a transformative impact on consumer lives. That's why we want to understand the new culture," adds Ms. Stark.

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