Some of the earliest mass-produced toys were dolls and trains, starting in the 1800s, but the U.S. toy industry did not see huge growth until the mid-1900s. Toy sales (excluding videogames) reached $24 billion in 2001, compared with $8.3 million in 1899. Factors such as mass production, the rise of enormous merchants such as Toys "R" Us and the advent of huge marketing campaigns?and especially TV advertising?had much to do with this increase.
But something else happened in the 20th century: The nature of children's play changed dramatically. In the early 1900s, children wanted to emulate adults and played with miniature versions of household products and farm or factory machines as well as with dolls and children's tools. But at the end of the century, toy makers were forced to compete with the Internet, videogames and TV, which have shortened the number of years that children are interested in more traditional toys and non-electronic games.
The 1950s: Realizing the value of advertising
In 1951, toy makers sold $500 million worth of toys but spent just $5 million on advertising. The toy industry claimed that the major difficulty with advertising toys was that they were primarily Christmas sellers despite the fact that in the early 1950s toys were becoming a year-round business. More toys were sold in the first 10 months of 1950 than in all of 1941.
In 1952, the toy business broke its record with more than $800 million in retail sales. One reason for the spike in sales was the advent of TV. The popularity of Hopalong Cassidy movies on early TV generated huge sales of Hopalong Cassidy gun and holster sets and other related items. In 1954, when "Disneyland" telecast a three-part story about Davy Crockett, the coonskin cap became an essential item for every child under 14.
But another factor was increased ad spending. Toy advertising in 1952 exceeded the previous year by one-fourth to one-third. The increase indicated a growing realization by toy manufacturers that the business could be a year-round enterprise.
In 1954, the toy industry introduced an industrywide promotion program with a budget of $1.3 million earmarked for local TV. It tied in all segments of the toy industry and promoted 104 individual toys. The program included a 13-week TV series in the 40 top TV markets, with buys in half-hour programs, a publicity and merchandising program, and the introduction of a new toy catalog called the Toy Yearbook. Commercials created by Friend-Reiss-McGlone, the toy industry council's agency, showed children using various toys.
The largest single-medium advertising expenditure in toy history to that point was a $375,000 fall TV campaign from Ideal Toy Co. in 1955. Commercials aired on CBS' "Winky Dink" and "Romper Room." Ideal also sponsored Macy's Thanksgiving Day parade on NBC.
The 1960s: Birth of branding
The 1960s saw the emergence of strong brand identification in the toy industry. Suddenly little girls and boys did not write to Santa Claus for just any doll, train or truck. They asked for a Chatty Cathy doll, a Barbie doll or Miss Ideal, or they wanted a Lionel Satellite train or a Tonka truck or a Robot Commando.
Toy makers spent nearly $25 million on advertising in 1961, up nearly 50% from 1960, and blazed specific brand names into the minds of youngsters who could barely spell. In the next five years, toy makers added $8 million to their TV ad budgets?hitting $10 million in spending?and their gross jumped by more than $650 million to $2 billion.
Using celebrities became a popular way to sell toys. In 1962, the industry jumped on the bandwagon of an American phenomenon: Roger Maris broke Babe Ruth's single-season home-run record in 1961. Transogram Co., via agency Mogul, Williams & Saylor, based a $2 million spring ad campaign on Mr. Maris. The campaign ran through June and featured the new Roger Maris Home Run Trainer, a batting device.
In 1963, Ideal also moved into year-round TV sponsorship, backing two 30-minute cartoon shows on 157 stations. The $30 million package, including a custom-made series of four animated cartoon programs over a five-year run, was the largest TV sponsorship ever undertaken by a toy manufacturer to that time.
By 1968, the leading toy advertisers and their major agencies were Mattel, represented by Carson/Roberts/Inc.; Ideal, represented by Grey Advertising; Marx, represented by Ted Bates & Co.; Hasbro, represented by Bruns Advertising Agency; and Aurora, represented by Adams Dana Silverstein.
In the game field, the leading companies were Milton Bradley, represented by Harvey & Carlson, and Parker Bros., with Badger and Browning & Parcher. Mattel was by far the biggest advertiser, spending $11 million, more than all its competitors combined.
This was a time of explosive growth in the industry. In 1969, toy industry sales topped the $2 billion mark for the first time, up 11% from 1968. Milton Bradley said that year it would spend $3.5 million in TV and magazines, up $1 million from the year before, and Parker Bros. spent more than $2 million to advertise games other than Monopoly. It was estimated that in the TV age, it took $250,000 to launch an important toy.
Around the time branding and advertising took off in the industry, so, too, did scrutiny of ads targeting children. In 1961, fearing outside regulation, the National Association of Broadcasters developed a TV code of ethics. Toy manufacturers conceded that the TV code would cause few changes to advertising but still fought to make them temporary.
The proposed code asked that advertisers avoid: Demonstrations or dramatizations that showed a toy in use in a manner that was not authentic; the use of language such as "only" and "just" applied to the price of a toy exceeding a few dollars; implying that a toy requiring a material investment could be had for the asking; presumptions that every boy and girl wanted, or should have, a toy, especially when it was high priced; and hammering a sales message.
It asked advertisers to reflect the toy in the framework of a play environment, performing in a way that actually represented the toy; present a toy on its actual merits as a plaything; make clear the special nature of a toy of above-average cost; and try to appeal to children's imaginations.
But many critics believed that self-regulation was not enough. In 1970, Peggy Charren, a well-known children's advocate, petitioned the Federal Communications Commission to eliminate spots on children's TV. Although Ms. Charren and her group, Action for Children's Television, were unsuccessful in eliminating those spots, they did succeed in banning spots that showed vitamins as "candy"; reducing the total amount of commercial time to nine minutes and 30 seconds per hour on weekends and 12 minutes per hour weekdays; banning program hosts from endorsing or selling products; and getting "bumpers," or five-second separator devices, inserted before and after commercials to help children better distinguish between a commercial and programming.
In 1978, the Federal Trade Commission proposed a rule that could regulate or even ban TV advertising to children, citing it as "unfair." But in 1980, after many proceedings, Congress barred the FTC from using "unfairness" as a legal point for making sweeping rules to regulate an entire industry. It said the FTC could only regulate or ban advertising on a case-by-case basis.
Sensing a change in the political winds under the new administration of President Ronald Reagan, in 1982 NAB abandoned its children's ad guidelines. Eventually, the major TV networks adopted their own children's guidelines using the NAB code as a base.
By 1983, the FCC had eliminated children' s policy guidelines that had been in effect since 1974; it then dispensed with limits on the number of commercials that could be aired in a given time period. In 1990, Congress passed the Children's Television Act. Stations were not allowed to air more than 10 and a half minutes of commercials per 30 minutes of programming on weekends and 12 minutes per 30 minutes on weekdays.
The 1970s: Toys reflect changes in the world
The toys of the 1970s began to reflect changes in the real world. Space toys in 1970 were more popular than in 1969, when Neil Armstrong first walked on the Moon. The Apollo flight boosted toy sales by $2.7 billion with new entries such as Zeroids, Astrolites, Billy Blastoff and Tri-Module. The "Star Wars" theatrical fad in the late 1970s produced characters such as R2-D2, C-3PO, Chewbacca and Luke Skywalker. Ads tied into the blockbuster movie were launched.
The number of TV series-related dolls and toys increased. The stars of "The Bionic Woman," "Six Million Dollar Man" and "The Waltons" appeared in TV spots for Kenner Products promoting toys based on their characters. That cleared the way for more celebrity dolls based on TV series, such as Fonzie, Mr. Kotter and Wonder Woman. But unlike in the past, spots aired on non-children's programming, such as "Charlie's Angels," "Sonny & Cher" and "Barney Miller."
The 1980s: Videogames
In the 1980s and '90s, toys and games began to take a new and different route to the pocketbooks of America. Print media gained more ground in toy advertising, with the Internet catching on in the late 1990s. TV was used primarily as a quick hit to promote line extensions, such as new Barbie outfits and supplements to already established dolls of both genders. Department store ads, trade books, newspaper supplements and direct mail garnered most of the media dollars during those decades.
The early 1980s also brought a new, hot product category: video and electronic games. At the Toy Fair in February 1983, these were the biggest areas, along with crafts and toys based on military themes and licensing, such as a Benji dog tied to the movie of the same name and a Brooke Shields doll modeled after the actress.
In 1982, one-third of the total toy volume of $9 billion was attributable to videogames. The next year Cabbage Patch dolls appeared on the market near Christmas, with consumers rushing stores to empty shelves of them.
The 1990s: Licensed toys and changing demographics
The biggest trends to hit the world of toys in the 1990s were the "Mighty Morphin' Power Rangers" and "The Lion King."
Playing off the power of its blockbuster animated theatrical, Walt Disney Co.'s "Lion King" licensed toys were backed by a huge, well-executed merchandising push by Toys "R" Us, J. C. Penney Co. and Kmart Corp. Mattel, the largest vendor of "Lion King" merchandise, scored heavily.
Bandai America's Power Rangers, with a TV series, national mall tour and movie, achieved cult status, selling some 6 million units. Other companies rushed in to try to duplicate Bandai's success, searching for properties with universal appeal. Later in the decade, another such phenomenon, imported from Japan, took its place: Pokemon.
Meanwhile, videogame sales continued to rally, with sales rising 5.3% to $17.5 billion in 1993 with Sega and Nintendo the major players. Sega's inroads into the field?it had snagged half of the $6 billion market?forced Nintendo to spend $10 million on an image campaign in the second half of 1994.
Retail sales of licensed toys hit $7.85 billion in 1996, up 5% from 1995, for a 45% share of toy and videogame sales.
By the late 1990s, the U.S. toy industry's major marketers and their agencies were: Mattel ( Ogilvy & Mather and FCB Advertising, Los Angeles), spending $245.2 million; Nintendo ( Leo Burnett USA, Chicago), $90.6 million; Hasbro (Grey Worldwide, New York), $264.2 million; and Sony, ( TBWA/Chiat/Day, Playa del Rey, Calif.), $89.8 million.
But the industry was facing a new problem. Children, growing up faster than ever, were losing interest in traditional toys much earlier than their older siblings had. Comfortable with technology, they forsook dolls, toy trucks and board games and took instead to the Internet, videogames and CD-ROMs at a young age.
Toy marketers responded with new interactive toys and "virtual pets," such as Tamagotchi, Neopets and Furby, which could "learn" behavior and interact with other toys. Doll makers fought back with lines such as Bratz, with a more streetwise sensibility and fashion sense.
In the second half of the 1990s, network TV lost toy advertising ground to cable TV; spot TV declined steadily from $231 million in 1995 to $53 million in 1999; newspaper ad expenditures declined drastically from 1998 ($7.1 million) to 1999 ($4 million); and outdoor advertising saw a dramatic rise from $83,000 in 1995 to a bit more than $1 million in 1999.
As the 21st century began, analysts were pointing to overseas markets as the answer for U.S. toy marketers grappling with shifting demographics and children's increasing sophistication. They estimated that toy manufacturers that have entered or will enter the global market in the years to come will get nearly half their revenue from overseas sales.