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Pre-Teens

Posted on Tuesday, Jan 9th

Worried your kid is spending too much time in front of the computer? Blame it on websites like, CartoonNetwork.com, Disney.go.com, ArchieComics.com and NickJr.com, which are attracting kids with a host of interactive games and shows. The percentage of children having access to Internet increased to a phenomenal 93% in 2006 in contrast to 56% in late 2003.

With the websites becoming more user-friendly and interactive, Internet is grabbing pre-teen eyeballs at a rapid pace, placing television and radio in the back burner. 67% of the teens are avid users of the Internet. The graph below gives details of Internet usage of tweens. Tweens and young teens aged between 8 and 14 on an average spend 1.5 to 2 hours daily surfing the Internet and make up 60% of the Internet users, aged less than 18.

The graph below shows the expected growth in Internet usage among the pre-teens.
Internet usage

Popular Pre-teen Sites and Trends

Internet usage pattern of pre-teens is different and it changes dramatically as they grow up. Kids are attracted to websites dealing with race cars, music, education, comedy, sports, news and movie stars and sites like MTV.com, Nascar.com, Hollywood.com, Comedycentral.com and Sportsline.com are popular among them. Apart from the children’s websites, the pre-teens are also influenced by the surfing of their parents and elders.

Research shows that after school hours, around 3 pm – 4 pm in the evening, 89% of the children are drowned in their computers. The pre-teens are mainly attracted to websites like NeoPets.com, ArchieComics.com, NickJr.com and CartoonNetwork.com where they can watch and interact with cartoon characters, play computer games, vehicle racing, board games, puzzles, play sets, action figures, participate in online quizzes, drawing and win prizes and watch television episodes that are missed out during school hours.

Below is a list of the popular websites among the pre-teens and their Alexa rankings:
Rankings of Websites

According to a research conducted by Media Metrix, “kids prefer websites which are popular amongst older users like Yahoo.com, AOL.com, Wikipedia.com, Geocities.com and Google.com. They visit a wide range of websites, from education to entertainment to news, which clearly shows that there is an opportunity for those trying to reach out to the young audience.”

Popular sites visited by the kids include music sites [55%], e-card sites [25%], animal sites [35%], sites on books [20%], sites on TV channels/films and cartoons [25%], sites on mobile phones [19%].

Below is a list of the online activities of the pre-teens by eMarketer.
Activities

Why the pre-teens matter?

Pre-teens add up to 17 million in the U.S and together they spent approximately $45 billion last year and influenced purchasing of their parents and relatives of an additional $80 billion. These kids control billions of dollars in purchasing power and entrepreneurs, Venture Capital firms and advertisers are increasingly targeting the tweens because of their influence in family purchases of clothing, cars, food items and consumer electronics. Everybody wants to catch them young.

A study by the popular youth website NeoPets.com revealed that the pre-teens aged 8 – 12 like Internet over traditional media like television, radio, newspapers and magazines.
Media Liking

While the pre-teens watch videos on the Internet, download music and play games, the parents shop online as per the wishes of their kids. However, kids belonging to the age group of 9 – 12 make online purchases by themselves. Neilsen//NetRatings survey shows that kids are increasingly becoming educated online shoppers in their own rights.

According to MarketResearch, kids are likely to spend more of their pocket money on online products with an expected $126 billion amount to be spent by their parents directly on their kids. ToysRus.com is a popular pre-teens website for online toy shopping. During the holiday season, ToysRus.com was the leading website accounting for 24% of Google Checkout’s upstream visits.

Retailers maximize their advertising ROI by running back to school advertising campaigns in the weeks before the school begins. Strategy Analytics, expects 2007 to be the year of online sales of prerecorded video for pre-teens. There exists an all-round bullishness for pre-teen websites and businesses targeted at them.

Business Model

Websites targeted at pre-teens earn majority of their revenue from subscription, e-commerce and content provided by the websites. Other sources of revenue for these websites are advertisements placed either on their websites or in the games, downloading of music and games, licensing of content, syndication and partnerships for developing content and gaming. Many gaming and educational websites targeted at the pre-teens are commercial free and survive only on subscription revenues. ClubPenguin.com, ranked 3,519 on Alexa is a popular gaming website for the tweens is completely funded by subscribers and has no advertisements.

Immersive gaming model used by NeoPets.com and other gaming websites could well be the business model of tomorrow as it allows advertisers to place creative advertisements in games without disrupting the flow of the game and thus generating interest in the product, which creates brand awareness. In-game advertisement is gaining in popularity and both the websites and the advertising industry is upbeat about the success of it. DFC Intelligence expects spending on in-game advertising to touch $1 billion by 2008 from $200 million in 2005. The market will get a boost as more game consoles go online and as broadband penetration rises, making online entertainment more robust and varied.

Marketers see in-game advertisement as an opportunity to attract kids without interfering in their games. NeoPets.com a popular destination for kids between 7 -14 has tied up with a host of companies to offer in-game advertisement. McDonald’s set up a store in the online game provided by NeoPets.com, which the McDonald’s management believes has helped in increasing consumption among the tweens and build brand loyalty.

Marketers are tying up with the tween sites to offer various games, shopping, puzzle solving or mix n’ match services to attract the kids to their products. Some of these marketers are providing kids with virtual currency to do fun shopping or discounts to kids jointly with the pre-teen websites. Marketers believe internet is the right medium for these kids as they spend more time on the internet than on any other medium.

VC Activity

Venture Capital and Private Equity activity has been comparatively less in the tween category but with the growing popularity of the Internet among the kids, increasing spending power and the level of influence that these small kids have is getting the VC community interested in this category. The Internet space for the kids and tweens is less crowded than those for the adults and with kids spending a major chunk of their waking hour’s surfing the Internet presents a good opportunity for the entrepreneurs and VC’s to target this niche space with creative and fun sites. The high level of brand loyalty among the kids makes it more attractive for entrepreneurs and marketers.

Experts are of the view that websites targeted at the pre-teens will do well provided they can offer innovative content, fun-filled games and community services that allows these young ones to play and communicate with their peers. StarNet Interactive, Inc., which owns tween community websites KiddoNet.com and GirlSense.com received a $2.7 million Series A funding from VC’s led by Leo Capital Holdings.

Conclusion

Mindshare Online Research group estimates that approximately 25 percent of the tweens belonging to the age group 6 to 12 are logging onto Internet to watch their favorite television shows. A study by eMarketer shows that more than two-third of kids aged 8 -14 is involved in online shopping, buying or comparing items. While a majority of the kids surf social networking sites, others can be found downloading music, games, cartoon characters, and watching television online.

It is no Midas touch that is driving the pre-teens to the Internet medium. It is the computer-technology quotient infused very early in lives of the pre-teens that is making this market shoot up by more than 50%. The pre-teens are addicted to their favorite websites and brand loyalty is high among them, which implies a good opportunity for entrepreneurs to tap this rapidly growing market that is still under served and has place for niche players. Marketers can use innovate in-game advertising and clever product placements to build brand awareness, drive consumption and connect with the young. The growing popularity of the Internet among the kids, high rankings and stickiness enjoyed by tween websites could just be the next big trigger for Internet businesses.

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