Cereal makers entice online kids

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Sagging cereal revenue has marketers thinking beyond the box for promotions, sparking a slew of Web sites. But entering cyberspace does not alone guarantee sales.

Some 12 million children, about 25% of kids ages 2 to 12, already are online. That number is expected to grow by 20 million within the next two years, and package good giants are trying to navigate the medium. Internet initiatives have helped General Mills, Kellogg Co. and Quaker Oats Co. reach their young target, an age group to whom cereal companies have historically directed the bulk of their promotional efforts. But selling them cereal is another story.


When Quaker decided earlier this year it wanted to make its Cap'n Crunch brand more relevant to kids, the Internet was a central component of its efforts. The large-scale "Where's the Cap'n?" promotion, while carried across traditional advertising and box-backs, also required kids to take clues, found offline or on Nickelodeon.com, to Cap'n Crunch.com (www.capncrunch.com) to solve the mystery.

More than 100,000 kids registered on the site and were engaged for at least 20 minutes, said Jay Coalsen, account manager at Web shop CyberSight, Portland, Ore., which created the promotion with FCB Worldwide, Chicago. But the product developed for the promotion, a special double package of Cap'n Crunch with a game-filled CD-ROM that linked to the Web site, did not fly as well.

"I ordered 7,000 cases and can't get rid of even two," complained one East Coast retailer.

The unwieldy package, which some retailers separated, has been cited as the reason for lackluster sales of the promotional product. It does raise the issue of how marketers can turn technological inroads into a boost to the bottom line.

"The challenge that awaits the industry is how to translate all the great opportunities to build relationships and talk to kids for prolonged periods of time into sales," said Mr. Coalsen. "But the reality is that the medium is not going away. Kids are more actively engaged with the Internet than with any other media available, and so it's very important to get online and establish this relationship."

Quaker has had great success with online sales of its quirky Quisp cereal (quisp.com). Other marketers also are looking to tie sales directly to the relationships they build online.


Kellogg has talked to kids for years via brand sites for Froot Loops (www.toucansam.com) and Frosted Flakes (www.tonythetiger.com), offering games and e-cards. Recently, though, the cereal behemoth developed an online loyalty program to better profit from its Internet presence. The "Eet & Ern" program (eetandern.com) lets consumers earn points via codes found in boxes of 18 Kellogg cereal brands. The codes are entered online to get products from sports site Fogdog Sports (fogdog.com) and school fund-raising site Schoolpop (schoolpop.com), among other partners. More than 260,000 consumers have registered on the site and several hundred have redeemed points for the products, said a Kellogg spokeswoman.

"The great thing about being a bricks-and-mortar company is that we can leverage off the technology of the Internet to tie in to on-package promotions," the spokeswoman said. "We want to be a ubiquitous presence, reaching consumers where they are, and the percentage of children who have access to the Internet is very high."


Another reason for moving formerly package-only promotions to the Internet is ease -- both for the consumer and the marketer.

To encourage consumers to go online to redeem "O" codes -- numbers imprinted inside cereal boxes -- for free software as part of its Cheerios brand's tie-in promotion with online retailer Chumbo, General Mills charges only $1.99 for online redemptions. It charges $2.99 for those who mail the code from the box.

"It's actually less expensive for us to do the promotions online, eliminating the need for an actual person to have to go through the redemptions, and it's very convenient for consumers," said a General Mills spokeswoman. "It's the new generation of proofs of purchase."


In addition to cost savings, General Mills created a co-branded site (www.cheerios.chumbo.com) as a way to stay hip with consumers. The site allowed consumers to exchange three "O" codes found inside 25 million boxes of Cheerios for one of 13 family software titles.

"This doesn't mean we'll abandon in-pack premiums like our current `Dinosaur' (a Walt Disney Co. film) offering," the spokeswoman said, "but we want to give consumers options and stay ahead of the curve."

Contributing: Ben Healy.

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