Toy media spending saw big changes in 2012. As we mentioned in Part 1 of our analysis, Toy advertising expenditures saw a year-over-year drop of 10.3% in Q4 and 9.3% for the overall 2012 calendar year. This analysis will look to shed light on the changes in overall media strategy that are impacted by the spending trends. Specifically, we will look at changes in spending by medium and the overall changes in media mix.
Changes in Spending
In reducing budgets, the Toy Industry dropped spending most severely in traditional media, such as TV, Radio, Magazines (consumer & trade), and Newspaper Inserts. Spending in these media decreased at a greater rate than total spending in both Q4 and total year. The total dollar volume drop for TV ($158.2MM) in 2012 exceeded the $129.5MM cut by the entire Toy Category.
When added together, cuts across all media channels totaled $175 million, 25% of which ended up in Internet spending. Outside of the small dollar volume increase in Newspapers, only Internet Display saw a budget increase (+$48MM) in 2012.
When Toys need to advertise, TV remains the primary media of choice, followed by Internet Display and Magazines. These three media combined account for 97% of all Toy Industry media spending. That trend did not change from Q4 to Q4 or total year 2011 to 2012. All other media, including newspaper and Radio, account for 3% of spending.
Source: Kantar Media Reports 2011-2012
Calendar year 2012 did see one major strategic change: the decline of TV support and a greater reliance on Internet in the non-holiday time period. While TV support composed 82% of spending in Q4, similar to the prior year, the Q1-2 time period saw TV fall from 67% to 58% of spending. This had the effect of driving TV to 71% of the mix for the year and Internet to 22%. It is important to note that digital media is under-represented in available media spending research, which only measures display (Internet banner ads) and does not yet capture Mobile and Social Media activity. Conservatively, we estimate that about 50% of Digital media spending is captured. Factoring that into the analysis, we would expect to see TV falling from 70% to 60% of the mix and digital rising to 36%.
Diving into the individual toy categories, we find that all categories except Online Games utilize TV at 80-90% of spending. As one would expect Online Gaming utilizes Internet heavily (84%) and relegates TV to the number two spot at 13%. Among the most traditional, strategically, are Action figures, Arts/Crafts, Infant & Pre-school Toys and Plush. These categories see 97% of their budget in TV and Magazines.
The Electronics/Video Games and Toy Vehicles categories have prioritized the Internet as their number 2 medium. Surprisingly, so have Dolls and Games (non-computerized), which include it at 5% and 4% respectively.
With all the changes in media usage and shifts in shopping behavior, it is not surprising to see the Internet play a more expansive role in Toy media plans. As budgets have rolled back, the internet provides a highly targeted, engaging and cost efficient option in the Q1-Q3 time period. In Q4, its strategic role expands as a reach extender, product research enhancer and shopping trip interceptor.
Looking ahead to 2013, we expect to see that trend increase across the year and perhaps more heavily at the Holidays. It will be very interesting to see what happens this year, given how the media environment, led by the dominance of technology across all consumer touch points, is changing our media plans. We must change with them. We, for one, will be very interested to see how the category responds and performs next year.
We hope you enjoyed this broad category view of Toy media spending, and media mix, in 2012, brought to you by Blue Plate Media Services. If you would like more information, or to contract a more customized report for your brand and category, please contact a Blue Plate Media partner at firstname.lastname@example.org.
Tim Jones, Media Director, Blue Plate Media