Toy industry looks to tots for boost

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The 5-year-old-and-under market is one of the few bright spots in a toy industry that's looking increasingly gloomy, thanks to competition from video-game and consumer-electronics companies.

A plethora of infant and preschool toys were introduced at last week's 2005 International Toy Fair. In 2004, the $20.1 billion toy industry fell 3%, while the $2.8 billion infant and pre-school market grew 10%, according to NPD Funworld.

This year, toy marketers will have more opportunity for preschool-directed advertising, as Cartoon Network unveiled a two-hour block of preschool programming during its recent upfront presentation. It, like Viacom's Nick Jr., accepts preschool advertising, though regulates it heavily. It also limits the number of breaks, airing spots only at the top and bottom end of preschool-targeted shows, rather than in the middle.

"We need to be sure children are clear one is a sell and one is a story," said Alice Cahn, VP-programming and development for Cartoon Network.

Preschool-age kids reach an "I want that" tipping point as early as 4 when they start making lists with pictures clipped from holiday catalogs and Sunday circulars. Lisa Mancuso, VP-pre-school market- ing, Fisher-Price, calls it "pre-cool."

high standards

Toymakers have generally been spared the Federal Communications Commission's heat that food marketers are facing. The National Association of Broadcasters, the Children's Advertising Review Unit and the FCC provide guidelines and counsel regarding the content of child-directed commercials, but toy marketers' toughest standards come from themselves and the networks that air their advertising.

"The networks scrutinize toy commercials more than any other category," said Shelly Hirsch, CEO, Summit Media Group. "You can't market a toy like you can market Lucky Charms." The FCC holds the networks, not the marketers, responsible for commercial-related violations. Last November, Nickelodeon and Disney's ABC Family were fined $1 million and $500,000, respectively, for violating children's advertising limits.

The ground rules: Toys must be presented literally and realistically, animation is limited to about 10 seconds a spot and marketers must disclose a full level of honesty about whether other parts are sold separately or if batteries are not included. "When I do a kids' spot I think `It's so easy' because it's so overt," Fisher-Price's Ms. Mancuso said.

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