Brand loyalty starts from a very early age

10 June 2010 | By Lou Cooper

Children’s spending power is booming. Marketing consultant Martin Lindstrom estimates children’s global purchase influence to be $1.88 trillion (£1.29 trillion). Moreover, young people are often seen as early adopters for many digital and direct media technologies, according to last year’s Buckingham Report on the commercial world and children.

Direct marketers that properly research and execute work targeting children and families may well be able to build future brand loyalty among young people. The Buckingham Report indicates that children exert a lot of influence on their parents’ purchasing activity as well as being consumers in their own right.

And companies that spend time and money influencing children at a young age could see them retain their custom in the future.

But despite all the potential, this is a thorny area for marketers. While not much legislation exists to regulate brands that market exclusively to children, this sector demands that marketers treat this vulnerable demographic in an ethical and responsible way. Any “inappropriate” transgressions end in consumer backlash, as retailer Primark discovered in April when it tried to sell a padded bikini range for seven-year-olds.

Earlier this year, Conservative Party leader David Cameron warned marketers, advertisers and shops to “show more restraint in the way they operate” when marketing to children or face further regulation. Before he became Prime Minister, Cameron expressed concern that children were being “treated like adults”, adding: “It’s high time the children’s market and advertisers show much more restraint in the way they operate. We don’t want to resort to regulation, but we will make it clear that if business doesn’t exercise some corporate responsibility, we will not be afraid to impose it.”

Marketers have responded quickly to this threat. Social networking site Facebook, to which users can sign up from the age of 13, is used by many brands for direct marketing activity. The website announced last month that it would be introducing simpler and more powerful controls for sharing personal information, in response to user concerns about privacy.

According to Facebook founder and CEO Mark Zuckerberg, these changes will include Facebook not sharing personal information with people or services that users don’t want, not giving access to personal information and not selling that information to third parties.

Jules Polonetsky, director of the Future of Privacy Forum, cautions: “The message that all companies should be taking on board is that managing their digital identity is critically important to internet users of all ages and backgrounds. As sites, services and devices grow increasingly complex, the challenge for Facebook and others is to continue to seek innovations that ensure that privacy tools can be intuitive for users.”

Caroline Roberts, director of public affairs at the Direct Marketing Association (DMA), advises that the Data Protection Act fails to mention children and that marketing to this demographic is fine, as long as brands go about it in the right way.

“It’s perfectly legitimate marketing to children of all ages, provided it’s suitable. It’s knowing what’s appropriate and making sure that you are getting proper parental consent where you need to,” she explains.

Yet to optimise their success rates in the family sector, many direct marketers focus their efforts on parents, who still exercise considerable control over the purchases their children make.

The Lateral Group managing director Ruaraidh Thomas, who has worked on the Government’s Change4Life campaign, says: “I wouldn’t say it never happens, but rarely would you engage directly with a child on a DM programme. Individuals are very sensitive – quite rightly so – about how people talk to their family. The benefits of using DM versus other marketing methods wouldn’t warrant the potential effect this could have on brand value.”

The Change4Life campaign sends direct mail packs containing tips, tools and activities to families to help them to eat better and exercise more. While it wants to reach children, it steers clear of addressing them directly. “It isn’t actually engaging with children in the sense that it works with families,” says Thomas. “Children come into it because they’re being supported by the programme through the contact their parents have with it.”

Thomas says none of the DM for Change4Life is about telling people what to do; it’s about helping people achieve their aims. He says: “We try to understand as much as possible about the data through surveys that families fill out. That helps to drive understanding around specific areas that people might be interested in and has triggered complementary programmes such as Dance4Life, in direct response to consumer needs.”

Ian Bates, creative director at agency Indicia, agrees that making life easier for parents is becoming an increasingly important “in” for direct marketers looking to engage with the family sector.

“A golden rule is don’t forget who’s paying for all of this,” he notes. “Unless you’re talking about kids who are at an age where they are making purchase decisions themselves, your aim is to make things more convenient for the parents.”

Bates works with online retailer Woolworths.co.uk, focusing on creating marketing programmes appealing to women with families, making certain critical periods such as Christmas feel easier for them to manage.

“That marketing technique was very much based around dynamic email, following the customer journey and making it more relevant as that journey continued, so that women saw more and more value in the dialogue,” he recalls.

As the direct marketing industry continues to expand to encompass new online channels and social media, marketers are increasingly using this space, in which children are often more savvy than their parents, to create brand awareness and engage with a younger audience. This sidesteps some of the burdens associated with data capture, used in more traditional forms of DM.

Nickelodeon UK marketing director Steven Brabenec explains: “We avoid Facebook because you’re not supposed to use it until you’re 13 and we know that a lot of our audience is younger than that. But there are quite a few places online now that can provide social interaction specifically targeted at the seven- to 15-year-old market. It’s very much social media with stabilisers on.”

One of these sites is Stardoll, an online fashion and games community for girls. Children register and are given their own avatar. Brabenec says: “Because it exists online, you can go into the cinema and watch a trailer for a Nickelodeon show or sign up to the Big Time Rush [programme] Fan Club. We then deliver a package to your virtual door that has a Big Time Rush T-shirt, which you can put on your avatar and wear it to walk around the Stardoll site.”

Another site is Swapit, where children earn “swapit” points and exchange them for virtual stuff. He says: “We can put Nickelodeon content on there that children can watch and earn swapits that they can then use to bid for Nickelodeon goodie bags, for instance.”

Brabenec used to do email marketing to 70,000 children in the form of the Nick Insider enewsletter, but the implications of collecting data from children – parental consent, double opt-in processes, reminders – were wide-ranging.

“You have to be seen to be following best practice, but the task became greater and greater and we had to look at it again. When I set it up four years ago, it was a very different world. Our website wasn’t so great then, but it’s marvellous now and children are getting everything they need from it. The job the newsletter used to do has been superseded by the website,” he says.

Brabenec adds that Nickelodeon does send direct mail but this is targeted at parents and is focused on the pre-school end of the sector. “We actively target the parent, but we include stuff that’s very much going to be rewarding and interesting to the child,” says Brabenec.

Similarly, Moshi Monsters (see Client View) splits its marketing material in order to engage both parents and children on a level that is most appropriate for each.

It appears that while some marketers are concentrating on the parental moneymakers, others are entering the new realm of virtual marketing direct to children. Whatever the strategy, marketers have to be careful to walk a fine line between risking appearing too intrusive, and impressing families with well-targeted, useful campaigns that can set up brand loyalty for life.