Top Digital Advertising Channels for Toy Brands between 2021 to 2022
- Brands in the competitive set spent the most on Instagram ($60.1M), followed by Display ($33.3M) and OTT ($28.8M). TikTok ($2M) saw the lowest ad spend allocations.
- Paid Search and OTT saw a significant increase of +1500% and +209%, respectively in the past 2 years.
- Twitter, YouTube, and Display saw a decrease in ad spend in the past 2 years.
- All brands in the competitie set have Instagram in their top 2 ad spend channels.
- LEGO had the highest budget amongst the competitive set, with an ad spend of $103.4M from Jan. ‘21 - Dec. ‘22.
- Mattel and Squishmallows personify the toys in their ads and create characters that are cute and desirable to buy.
- LEGO and Melissa & Doug tell stories about how their product provided inspiration for a child - such as an ice cream toy or building a dog wheelchair.
- LEGO uses the hashtag #RebuildTheWorld to encourage user submissions of creative LEGO creations.
The following companies were included in the competitive set for this analysis:
- Emphasize sales and free shipping offers, such as Melissa & Doug providing 20% off or Lego’s free shipping on orders over $35.
- Personify toys and create a simple storyline to make the ad fun and memorable.
- Encourage audience generated content by using a branded hashtag and using audience submissions to co-create content.
- Partner with other brands and popular movie/tv franchises such as Star Wars, to capitalize on their audience base.
- Disregard potential customer concerns and doubts in ad creative.
- Forget to emphasize product benefits in addition to sales and discounts.
- Overcomplicate messaging with too much information.
- Fail to target competitor keywords and product review-seekers.
- Overlook platforms like Snapchat and TikTok, that have a younger audience and less competitive focus.
Between 2021-2022, the competitive set allocated $196M to digital ads. Despite some quarterly fluctuations, monthly ad spend has been trending upward.
Yearly ad spend has seen an increase of +45% YoY.
There was a seasonal pattern in ad spend, with higher spending occurring in Q4 2021 due to LEGO’s #RebuildTheWorld campaign & Mattel’s Hot Wheels campaign.
Q4 2022 saw a spike due to LEGO’s Instagram and Display ads, & Mattel’s 4-in-1 game experience campaign.
LEGO made up 53% of the $196M total ad spend amongst the competitive set at $103M.
Mattel had the second highest advertising budget a $85M.
Melissa & Doug and Squishmallows saw the smallest ad budget, allocating $6M and $1.5M — making up 2% and 1% of the total ad spend, respectively.
All brands, except for Squishmallows, experienced an increase in their annual ad spend between 2021 and 2022. LEGO had the largest increase of +98% YoY.
Squishmallows experienced a significant decline in advertising spend, dropping from $1.1M to $421K over the two-year period, representing an -62% decrease.
The highest priority for ad spend allocation among the competitors was given to Instagram, which accounted for 31% of the total budget, amounting to $60.1M.
Following that, Display and OTT were the next significant channels, with $33.3M (17%) and $28.8M (15%) of the budget allocated to them, respectively.
Instagram ad spend has been on the rise with ad spend increasing by +9.7% over the two year period.
Display spending has decreased, slightly dropping from 17.7M in 2021 to 15.6M in 2022 (-11.6%).
OTT has experienced a significant increase in yearly ad spend, increasing from $7M in 2021 to $21.8M in 2022 (+210%).
YouTube spending has decreased significantly, dropping from 13.6M in 2021 to 9.8M in 2022 (-28%).
Paid Search has experienced the greatest increase in yearly ad spend, increasing from $1.1M in 2021 to $18.6M in 2022 (+1500%).
Facebook ad spend has been on the rise with ad spend increasing by +13% over the two year period.
Twitter spending has decreased significantly, dropping from $3.3M in 2021 to $2.4M in 2022, representing a -28% decrease.
Although Snapchat data was not available until January 2022, there has been a substantial increase in the competitive set's investment in ads on the platform, with a $4.4M allocation in 2022.
Although ad spend data for TikTok ad spend data was unavailable until January 2022, spending on the platform has been on the rise. However, it still receives the smallest allocation of ad spend among all the platforms.
LEGO had the largest budget amongst the competitive set at $103.5M.
39% of their budget went towards Instagram ($40M), followed by Paid Search at $18.7M (18%).
LEGO budgeted 51% ($20.3M) toward Story ads, followed by Video ads ($10.2M) and Photo ads ($7M).
- User Generated Content: Both ads utilize the hashtag #RebuildTheWorld to encourage the audience to submit their LEGO creations.
- Co-Creation: This ad highlights LEGO’s audience ingenuity by editing user submissions onto a magical background.
- Positive Impact: This ad showcases how LEGO helps make a positive difference in the world by telling the story of a boy who utilized LEGO to build a wheelchair for his disabled dog.
Spend: $1.1M | Imp.: 110.7M | CPM: $9.9
Spend: $378.2K | Imp.: 39.6M | CPM: $7.2
LEGO budgeted $2.7M toward Mobile Paid Search (87%) compared to $410K on Desktop Paid Search (13%).
Paid Search Tactics
- Free Shipping Over $35: LEGO alleviates customer concerns about shipping costs by advertising their free shipping over $35 offer within the first sentence of their ad description.
- Addressing Concerns: LEGO addresses other main concerns their customers have by stating ‘order missing pieces’, ‘frustration free returns’, and ‘quality guarantee’ in their ad.
Mattel had the second-highest digital ad spend among the competitors, amounting to $85.3M.
24% of their budget went towards OTT ($20.7M), followed by Instagram at $17.4M (20%).
Mattel budgeted $9.7M toward Hulu OTT (47%), followed by $6.6M on Other* OTT (32%).
*Other OTT includes spend from streaming services other than Hulu, Pluto TV, Peacock, Tubi, and Paramount +.
- Animated Objects: This ad by Mattel animates the couch, chair, and the camper toy by creating faces and voices for them. This animation keeps the ad interesting and captivating for the viewer.
- Creating a Character: This ad by Mattel gives a personality and storyline to the dog toy to promote its new Barbie product line.
Mattel budgeted 43% ($7.5M) toward Story ads, followed by Video ads ($4.9M) and Photo ads ($4.1M).
- Close-Up Shots: Both ads by Mattel utilize short video ads to showcase more detailed shots of their products.
- Artistic Use: This ad by Mattel utilizes their product in a creative way — creating a silhouette art piece.
- 4-in-1: This ad by Mattel highlights the product’s value by sharing how it can be used for 4 different game experiences.
Spend: $179K | Imp.: 22.7M | CPM: $7.88
Spend: $131.2K | Imp.: 16.7M | CPM: $7.85
Melissa and Doug spent $5.9M on digital advertising.
32% of their budget went towards Instagram ($1.9M), followed by Facebook at $1.8M (30%).
Melissa & Doug budgeted 68% ($1.3M) toward Story ads, followed by Photo ads ($304K) and Video ads ($228K).
- Sales Promotion: This ad by Melissa & Doug entices viewers to check out their store by advertising a sale of 20% off.
- Telling a Story: This ad by Melissa & Doug promotes its product by telling a story about how a little girl gets inspired by seeing an ice cream counter and then getting her own ice cream counter toy.
Spend: $37.2K | Imp.: 4.6M | CPM: $8.08
Spend: $31.8K | Imp.: 3.3M | CPM: $9.63
Melissa & Doug budgeted 73% ($1.3M) toward Link ads, followed by Video ads ($322K) and Photo ads ($167K).
- Solving Parental Concerns: Both of Melissa & Doug’s ads target a big parental concern of reducing screen time by stating, ‘Looking for ways to reduce screen time? We’ve got a toy for that’ in their caption and ‘No screens, no batteries…’ in their photo.
- Trusted Brand: This ad by Melissa & Doug communicates their brand’s credibility to new audiences by stating how they are ‘the #1 preschool brand’.
*Post no longer available.
Squishmallows spent $1.5M in digital advertising.
59% of their budget went towards Instagram ($897.2K), followed by Twitter ads at $286.5K (19%).
Squishmallows budgeted 46% ($411K) toward Story ads, followed by Video ads ($270K) and Photo ads ($188K).
- Personified Plushies: Both ads by Squishmallows personifies their products by stating “Meet Foster” in their video and combining it with the caption that states how Squishmallows are ‘...friends with unique personalities’.
- Logo in the Photo: Both ads by Squishmallows includes its logo in the top left corner of the photo. This helps new audiences easily identify the brand.
Spend: $96.9K | Imp.: 12.7M | CPM: $7.62
Spend: $16.5K | Imp.: 2.2M | CPM: $7.50
Squishmallows budgeted $207K toward Photo ads (72%), followed by Link ads ($60K) and Video ads ($19K).
- Holiday Themed: Both ads by Squishmallows contain Easter themed products that were promoted 3 weeks before the holiday.
- Limited Supply: This ad by Squishmallows promotes sales by stating ‘while supplies last’, thereby creating a sense of exclusivity and urgency by describing how finite their limited edition product is.
Spend: $15K | Imp.: 2.9M | CPM: $5.20
Spend: $14.7K | Imp.: 2.8M | CPM: $5.25
- Spend is a directional approximation and does not include retargeting, or behavioural targeting. Spend is in USD.
- Total ad spend includes Paid Search, Facebook, Display, Instagram, OTT, Snapchat, TikTok, Twitter & YouTube.
- Ad spend was unavailable for TikTok and Snapchat from January 2021 to December 2022.
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