The Go-To Playbook for Toy Advertising Is Transforming

by Rick Bruner, head of insights and analytics, Standard Media Index (SMI)

Traditionally, the advertising route for toymakers hoping to drive sales in the last three shopping months of the year went through one channel: linear TV. As recently as about a decade ago, cable TV networks accounted for approximately 65% of the total toy media mix during the fourth quarter. 

But, the go-to playbook for toy advertising is transforming, thanks to changing media habits among the parents of young kids — and life during the COVID-19 era. In Q4 2020, the kids’ cable networks share of toys and games ad spend plummeted to 31%, down 9% from the previous three years’ average.

Let’s dive further into the numbers to understand how and why toy advertising strategies are evolving and what the changes portend for the toy industry.

Digital advertising is clearly gaining market share from cable TV. While the share of Q4 toy ad spend dedicated to kids’ cable networks dropped from 40% to 31% over the past decade, the share allotted to digital platforms grew to 47% last year. 

A few factors are driving this change. The first is that TV spend in general is shifting from linear to digital as cable viewership declines and streaming soars. eMarketer predicts that 30% of households are projected to become cord cutters this year and digital media now makes up more than 50% of total advertiser spending in the Standard Media Index pool.

But the broader shift from linear to digital does not tell the whole story of toymakers’ shift in ad spending. In fact, the shift in ad spending is likely to be even more dramatic than the advertising-wide shift from linear to digital because cord cutting is particularly common among toymakers’ primary audience: parents with young kids. 

According to Statista, 27% of American adults reported that they intended to cut out cable last year. However, among adults 18-34 years old — those most likely to be in the market for toys — that figure was 36%, a meteoric rise from the previous year’s 18%.

The third factor transforming the media mix for the toy category is the COVID-19 pandemic. Consider those numbers on cord cutting: What’s significant is not just that young parents are giving up linear TV in droves; it’s that the post-2020 landscape looks dramatically different from that of the year before. The share of 18-34-year-olds reportedly giving up cable doubled. The pandemic also cemented millennials’ overwhelming preference for shopping online, which is, in turn, upending toy ad trends.

Perhaps the most exciting change in toy advertising is that advertisers can now reach potential toy buyers across many channels and screens. That comes with several opportunities: cutting costs by targeting prime-time audiences on less expensive real estate; reaching consumers on the channels and devices of their choice; and retargeting across channels so that an awareness-boosting TV ad can transform awareness into sales on a channel where buying is more frictionless than TV. The shift to digital also comes with increased measurement capacity and targeting granularity, allowing advertisers to reach specific viewers — not broad profiles of viewers — and determine whether efforts are successful to continually readjust for success.

That said, the digital ad era is not without its challenges. Chief among them will be measuring and effectively calibrating media spend across channels. In other words, the promise of this next generation of toy ads is also its peril. Advertisers will need to develop new tools, skills, and partnerships to navigate an increasingly fragmented ecosystem effectively, ensuring frequency is appropriate and that spend is put to good use.

It’s a brave new world for toy advertising. Like the kids the industry’s messages aim to delight, advertisers should embrace the rich future upon them and seek out the help required to make the most of it.

This article originally appeared in the May 2022 edition of the Toy Book. Click here to read more!