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Journal Issue: Children and Electronic Media Volume 18 Number 1 Spring 2008

Children as Consumers: Advertising and Marketing
Sandra L. Calvert

Marketing and Advertising

According to the American Marketing Association, marketing is “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit an organization and its stakeholders.”3 Using the “Four Ps” of marketing—product, place, price, and promotion—advertisers use paid public presentations of goods and services in a variety of media to influence consumers' attention to, and interest in, purchasing certain products.4

Television has long been the staple of advertising to children and youth.5 Children view approximately 40,000 advertisements each year.6 The products marketed to children—sugar-coated cereals, fast food restaurants, candy, and toys—have remained relatively constant over time.7 But marketers are now directing these same kinds of products to children online.8

Targeting Youth
Although the kinds of products marketed to children have remained much the same, the buying power of children and adolescents has increased exponentially over time.9 The affluence of today's children and adolescents has made youth a market eminently worthy of pursuit by businesses. Youths now have influence over billions of dollars in spending each year.10 In 2002, U.S. four- to twelve-year-olds spent $30 billion.11 American twelve- to seventeen-year-olds spent $112.5 billion in 2003.12 In 2003, 33 million U.S. teens aged twelve to nineteen each spent about $103 a week.13 According to one report, parents supply 87 percent of young children's income. That share drops to 37 percent for teens, who have more of their own discretionary income.14

Youths also shape the buying patterns of their families.15 From vacation choices to car purchases to meal selections, they exert a tremendous power over the family pocketbook. Experts estimate that two- to fourteen-year-olds have sway over $500 billon a year in household purchasing.16 Thus, to influence youth is to influence the entire family's buying decisions.

Rapid growth in the number of television stations and online venues has also led advertisers to market directly to children and youth.17 Because children and youth are heavy media users and early adopters of newer technologies, media marketing and advertising campaigns using both television and newer media are efficient pathways into children's homes and lives.18 Although television is still the preferred medium for reaching children and youth, marketers are exploring how to reach this age group online using cell phones, iPods, game platforms, and other digital devices. Banner ads, for example, which resemble traditional billboard ads but market a product across the top of an Internet page, appear on most webpages.19 And “advergames” integrate products such as cereal and candy into online video games to sell products to youth.20

In 2004, total U.S. marketing expenditures were estimated at some $15 billion to target products to children.21 Reliable estimates of spending in the newer media are not available. 22 Newer forms of marketing are a small share of the overall marketing budget spent on traditional print, broadcast, radio, and online advertising, but the share spent on these newer forms is growing.23 Indeed, online venues can reap large returns for relatively small investments. For example, Wild Planet Toys spent $50,000 for a four-month online promotion that was associated with a doubling of Wild Planet's yearly revenues. A comparable buy for a television advertising campaign would have cost $2 million.24 And a recent Nabisco World game and puzzle website designed to increase awareness of Nabisco's cookies and crackers cost only 1 percent of the company's advertising and marketing budget.25 Advertising on online games was expected to grow from $77 million to about $230 million between 2002 and 2007.26

Marketing Techniques
Marketers use a variety of techniques to attract audiences to increase product purchases. Traditional marketing techniques in television commercials include repetition, branded characters, catchy and interesting production features, celebrity endorsements, and premiums (free merchandise that accompanies a product).

In recent years advertisers have begun to experiment with new techniques. One such technique is stealth advertising, in which marketers attempt to conceal the intent of an ad.27 The theory behind the new technique is that advertising is most effective when consumers do not recognize it as advertising.28 If consumers' “guards” are down, they will be more open to persuasive arguments about the product. Using this approach, marketers try to blur the line between the advertisement and the content. Stealth advertising is allowed only in media like online venues, however.29 In children's television advertising, clear markers must separate commercial content and program content.30

Marketers who practice stealth advertising embed products within a program's content, use so -called viral (word-of-mouth) marketing, enable children to interact with online characters who promote specific brands, disguise advertisements as video news releases, and collect information from youth at online sites.31 All these practices are designed to create or enhance branded environments that foster user loyalty.32

Repetition. Repetition involves simply repeating the same commercial message over and over. The idea is that familiarity with a product increases the likelihood of purchasing and using it.33

Attention-getting production features. Attention- getting production features are designed to attract children's interest in commercial content.34 Such features, which are heavily concentrated in children's television advertisements, include action and movement, rapid pacing, sound effects, and loud music.35

Branded characters and premiums. Successful marketing campaigns often use branded characters—that is, media characters that are associated with a company, and hence promote its brand name—that appeal to children and youth.36 Rights to use popular television cartoon characters like Nickelodeon's SpongeBob SquarePants, who are licensed for a fee to various companies, help sell products ranging from cereal to vacations, while animated characters such as Tony the Tiger are spokesmen for a specific product, in this instance Kellogg's Frosted Flakes. Similarly, the Ronald McDonald character is used to sell the McDonald's brand, including Happy Meals, and has recently taken on a new role as a physical fitness guru. Marketers associate the products and activities they want to sell with entertaining characters to increase interest in those products.37 They use the same characters in online marketing campaigns and in television advertisements. They also use premiums, such as a small toy in a McDonald's Happy Meal, to increase product purchases by children online and on television.38

Celebrity endorsements. Celebrity endorsements also help sell products.39 Athletes are depicted on cereal boxes and appear onscreen wearing and using specific athletic clothes and gear. Children who like those celebrities are expected to purchase these products.

Product placement. Product placement was first recognized as a successful marketing technique when the character E.T. in Steven Spielberg's 1982 movie of the same name ate Reese's Pieces, resulting in a national spike of 66 percent in product purchases.40 In television programs or movies, brands are not only used by characters, but even become characters. For instance, Charlie the Tuna, Twinkie the Kid, and Mrs. Butterworth fight against the evil brand X products in a film titled FoodFight!.41 Such marketing exposure increases a consumer's familiarity with a product and can result in a favorable opinion of a brand.

Another form of product placement involves websites whose sponsors put their logo on the page. For instance, Bolt, a popular website for teens, had a Pepsi logo on its music page.42 Every time users go to the music page, they are spending time with Pepsi, thereby increasing their brand awareness. Corporations typically retain a product placement agency for an annual fee; they pay additional fees for each placement, with the cost dependent on whether the product simply appears or is used and labeled.43

Marketers also use product placement in gaming. Traditional console games cannot be changed, making them an expensive venue for product placement.44 But online games, which can be updated frequently, are more suited for product placement.45 Although gaming has historically been more popular with boys than with girls,46 many companies are now trying to get girls to play branded games as well.47

To appeal to this now extensive gaming audience, advertisers have developed advergames, online video games with a subtle or overt commercial message where the use of product placement is common.48 In advergames, marketers not only ensure that users' eyes are on the embedded advertisement, but also know how long the user is engaged with the brand and can track the user's exact behavior. For example, whenever players run over Coke cans in an arcade-style basketball advergame called Live the Madness, their performance is enhanced: they can run faster, for example, or dunk the basketball.49 The implicit message is that Coke will make you a better athlete.

One of the most popular sites on the Web is Candystand, sponsored by Kraft Entertainment. Fruit Stripe Photo Safari, the most popular game in Candystand, allows players to take photos of wildlife as the company promotes Fruit Stripe gum. These photos go into an online album, and children gain bonus points for taking “good pictures.”50 While fun for children, the point of the game from the marketers' perspective is to create a website where children will continue to play the game and have extensive exposure to the products on the website. Sites like neopets.com, which are popular with preadolescent, or “tween,” girls, also let children “buy” foods, such as Uh Oh Oreo cookies, to feed their virtual pets using points that they have earned by playing games.51 All of these stealth techniques foster immersive branding, potentially creating favorable views and memories of specific products.52

Marketers are increasingly building brand awareness and loyalty through video games.53 A successful game means a successful product as the consumer is engaged, interested, and focused on the product.54 Now that games can be downloaded, marketing can be transmitted by cell phones and other digital devices.55

Viral marketing. Viral marketing is the “buzz” created when people talk about a product to one another, either in real or virtual conversation. 56 Marketers use various forms of viral marketing, including capitalizing on the spontaneous talk about a popular website. They also pay “alpha” kids to use a product so that others will notice and want to buy it.57 The human touch by friends also escalates sales. For instance, e-mail sent by friends forwarding information about a freebie from a website is ten times more likely to be opened than is unsolicited e-mail.58 Online chat and other kinds of viral marketing are also used to get the trust of gamers.59 Viral marketing is especially effective with teens, particularly if it involves big discounts, attractive products, and meaningful freebies.60

Online interactive agents. Online interactive agents are a virtual form of stealth advertising. Marketers program robots, or bots, to reply to surfers who initiate a conversation.61 Such bots are programmed to respond to users in a one-on-one relational way that builds brand loyalty, as for instance, with virtual bartenders who “talk” to those who visit their sites.62 These alcohol-related websites feature humor, games, and hip language to appeal to minors.63

Video news releases. Video news releases, in which companies circulate stories about their products, are a form of virtual advertising that is used on television by every single news organization.64 For instance, General Mills will send out a news story about Cheerios featuring a factory tour and a giant Cheerio made just for the occasion.65 Video news releases, which are cheaper than traditional advertisements, are neither presented nor labeled as advertisements, thus potentially breaking down the more critical stance that older viewers take when viewing an advertisement that they understand is trying to sell them a product.

Integrated marketing strategies. Another new marketing trend is the use of integrated marketing strategies, particularly with branded characters driving interest across media platforms. 66 Companies charge advertisers a fee for licensing popular children's characters for multimedia applications in TV, books, CD-ROMs, games, and movies to sell products.67 Integrated marketing will use, for example, SpongeBob the television character, who becomes a movie character who markets Burger King products with SpongeBob premiums as rewards for product purchases.68 Toys, both large and small, are key to such marketing campaigns.69 These strategies integrate different media, as well as different product lines by tying food to toys.

Tracking software and spyware. Not surprisingly, marketers want to know who is visiting their websites to find out how effective their marketing strategies are. Using so-called cookies, or electronic bits of data placed on a computer from a website, coupled with registration forms to those sites, marketers can create an extensive data file about each individual user's preferences for places and products.70

Bolt has pioneered such activity by using communication tools to enable users to interact with others or to create content. Three million teens, 70 percent of whom live in the United States, registered with their site in just three years. Bolt uses supercomputers to analyze the data provided by users and then forecasts trends for marketers.71 Bolt also sends information that individual teens want at their website to their wireless devices such as cell phones and pagers.72

Bolt users are aware of these data collection practices, and Bolt does not sell individual data to marketers. Other companies, however, have been less scrupulous in their business practices with their online visitors. Some marketers spy on their users by tracking what they do online. Spyware is installed when files are downloaded; these files are then inserted on the user's hard drive and send information back to the marketer. In Netspeak, these are called “E.T. applications” because they “phone home” to report back what they learn about the user. Such information, which can be detailed and intrusive, includes the person's name, address, phone number, ad clicks, and buying patterns. Adam Cohen describes these applications as Trojan horses: they violate the privacy of users, commandeering their own computers to spy on them without their knowledge. Applications that spy on users include zBubbles, which helps users make consumer decisions, DoubleClick, and even SurfMonkey, a program that is supposed to protect children when they are online. A program called RealJukebox, which allowed users to transfer music from the Web and CDs to their PCs, also surreptitiously sent information back to RealNetworks about the kind of music the person liked. This practice violated the privacy of minors even though it was not technically illegal. Privacy concerns were also raised when DoubleClick purchased Abacus Direct and attempted to link online knowledge about consumers with traditional marketing techniques where targeted product offers would be delivered by the postal service.73

Marketers publicly say that user information is used only in an aggregate form as supercomputers take all this data and analyze it for consumer trends to get an advantage over the market. Nevertheless, a company can use this information to inform marketing strategies. For instance, the company can send individual users different ads rather than the same ones repeatedly, thereby avoiding overexposure and maximizing interest and potential sales. Moreover, some websites state that their privacy policies can change without notice.

In summary, although television is still the dominant venue for advertising, marketers are exploring new ways to market to children and adolescents through online media and wireless devices, often using stealth techniques whereby consumers are immersed in branded environments, frequently without knowing that they are being exposed to sophisticated marketing campaigns. Marketers carefully analyze children's and adolescents' interest patterns, focusing on games for “tweens,” as well as communication software for teens. Tracking these patterns provides extensive information that marketers now analyze in aggregate form, but that can, in the future, be used for one-on-one relational marketing strategies directed at specific individuals.