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Digital ad spend on kids expected to double by 2019

As children watch less Nickelodeon and more YouTube, the ad dollars will follow

Financial trends and news by Steven Loeb
September 11, 2017
Short URL: http://vator.tv/n/4a1c

It's no secret that advertising dollars are shifting rapidly from traditional mediums, such as television and print, to digital platforms. According to eMarketer, digital ad spend grew to $129.23 billion in 2016, passing the amount spent on television for the first time. This year, $10 billion more will be spent on digital over television. 

A Whitney Houston once said, the children are our future, and they are growing up in a world where they have a much greater comfort level with digital platforms which, for advertisers, represents a golden opportunity to get the next generation of consumers on the platforms that are increasingly seeing higher viewers and engagement rates.

The digital advertising market is expected to double within the next two years, according to the Kids Digital Advertising Report from PricewaterhouseCoopers and Super Awesome, a company focused on brands and publishers for children. It will grow from $600 million in 2016 to $1.2 billion by 2019 in the United States and the United Kingdom.

The percentage of total advertising spent on children is expected to go from 3.5 percent in 2012 to 4.2 percent in 2019, a rise of 20 percent. Of that, the amount spent on digital will go from 0.3 percent to 1.2 percent, a whopping 300 percent increase in the same time period.

As more money is spent on advertising for children, expect more and more of that to be put into digital platforms. 

Goodbye Nickelodeon, hello YouTube

There are a few trends driving this shift toward digital advertising dollars. A lot of it has to do with where kids are choosing to spend their time. 

First, fewer kids are watching television than they were just a few years ago. Nickelodeon, the largest kid oriented TV network by far back in 2010, has seen its daily viewership fall from over 1.2 million around 700,000 in 2015, leaving it in second place, behind the Disney Channel.

Meanwhile, the amount of time being spent on YouTube is now roughly 30 percent of all the hours children spend on online media.

That includes 23 percent of children aged 3 to 16 spending three to hour a week on the platform, and other 15 percent spending between five and 10 hours.

Dealing with compliance

Selling to kids isn't quite the same thing as selling to adults. 

Right now, the government, in both the U.S. and the U.K., has put regulations onto what can and cannot be shown to children. For example, advertisers aren't allowed to lie to kids by showing them an advertisement that isn't labeled as such. In the U.K. and the EU, there's a ban on showing kids unhealthy products (we really should have something similar in the U.S., shouldn't we?). There are also bans against collecting data on kids without parental consent.

If these laws are violated, advertisers face monetary penalties.

So far, platforms and networks that comply with these laws are being favored overwhelmingly by children. Digital kids broadcasters that are compliant are expected to grow by 35 percent from 2016 to 2019, while non-compliant broadcasters will see just 3 percent growth.

Even compliant kids TV broadcasters will be growth of 7 percent, while those are non-compliant will shrink by 18 percent in that time frame.

Given all of the regulatory hurdles, programmatic advertising to children will be somewhat difficult. Knowing which ad to put in front of the right person at the right time becomes difficult when you're restricted in knowing who the person is. Even then, though, PwC expects 10 percent to 20 percent of spending on compliant inventory to be programmatic by 2019.

(Image source: expertbeacon.com)


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