Top Digital Advertising Channels for the Toy Industry in Q1 2023

Key Takeaways

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Advertising Trends

• Ad spend in the Family & Parenting industry increased by +17% YoY from 2021 to 2022.
• In 2022 competitive set saw a -16% YoY decrease in web traffic and a -22% decrease in ad spend. In 2022, all quarters saw a decline in spend YoY with Q3 2022 experiencing the greatest decline.
• Geoffrey, LLC. spent the most on ads at $3.4M, followed by Indigo with $1.6M. A majority of the brands in the competitive set (60%) cut their Kids/Baby Toy & Book advertising budgets in 2022.

Platform Trends

• Facebook saw the highest ad spend allocation ($3.2M), followed by Paid Search ($2.5M). 
• YouTube ($924K) and Display ($439K) saw the lowest ad spend allocations amongst the competitive set.
• Paid Search (-39%) and Display (-81%) are the only channels that saw decreases in spend into 2022.

Content Opportunities

• Amongst the competitive set, Paid Search ad messaging saw a trend in headlines offering the option to shop online or in-store.
• On Facebook, brands are seeing a shift in creative from rendered toy images to ads featuring a mix of stock imagery and text.
• As YouTube ads, Walmart utilized videos shared by various toy brands, such as Calico Critters and Hasbro. Some of these toy-specific ads mentioned being able to purchase the toys at Walmart, while others did not and simply linked to Walmart.
• On Display, brands use ads to promote their Black Friday and holiday campaigns. Indigo shared creatives featuring their yearly gift-giving guides and linked to the guides in their ads.

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From 2021 to 2022, ads in the Family & Parenting industry in Canada grew by +17% YoY, increasing from $17.3M in 2021 to $20.2M in 2022.

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All quarters saw increases YoY into 2022 except for Q4, which experienced a -17% spend decrease due to a cut in November.

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The following eight advertisers were the biggest spenders in Canada within the Family & Parenting industry in 2021-2022: 

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Zuru Toys, LEGO and Walmart are the only companies that saw increases in ad spend from 2021 to 2022 at +706%, +195% and +13% respectively. LEGO’s increase in ad spend can be attributed to the Star Wars “This is How we Play” campaign.

*Ad spend includes Facebook, YouTube & Display from the top Family & Parenting advertisers in Canada. Family & Parenting advertisers include brands that offer kids and baby toys, books, gear & supplies etc. Spend is a directional approximation and does not include retargeting, or behavioural targeting

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The following companies were included in the competitive set for this analysis:

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In 2022, the combined web traffic* of the competitive set decreased by -16% YoY from 2021.

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During this time period, brands in the competitive set reduced their digital ad spending by -22% YoY. 56% of the budget was allocated in Q4 2021 & Q4 2022.

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In 2022, all quarters saw a decline in spend YoY with Q3 2022 experiencing the greatest decrease from the previous year, at -37% YoY.

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From January 2021 to December 2022, Facebook saw the highest ad spend allocation ($3.2M), followed by Paid Search ($2.5M).

YouTube ($924K) and Display ($439K) saw the lowest ad spend allocations amongst the competitive set.

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Paid Search (-39%) and Display (-81%) are the only channels that saw decreases in spend into 2022.

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From January 2021 to December 2022, Geoffrey, LLC. spent the most on ads at $3.4M followed by Indigo with $1.6M.  

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From 2021 to 2022, Geoffrey, LLC., Canadian Tire, and Walmart cut their Kids/Baby Toy & Book advertising budgets, whereas Indigo and Amazon increased theirs.

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In 2022, Geoffrey, LLC. saw a -33% YoY decline in desktop traffic and a -31% YoY decrease in digital ad spend. 

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From January 2021 to December 2022, Geoffrey, LLC. had the largest budget amongst the competitive set at $3.4M.

Digital advertising spending was focused on Paid Search ($2.2M), followed by Facebook ($820K).

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Toys”R”Us made up 86% of Geoffrey, LLC.’s spend on Kid/Baby Toy & Book ads, and Babies”R”Us accounted for 14%. Both Toys”R”Us and Babies”R”Us experienced a decline in Kid/Baby Toy & Book ad spend from 2021 to 2022. 

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In 2022, Indigo saw a -13% YoY decline in desktop traffic and an +11% YoY decrease in its advertising budget.

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Indigo spent $1.6M on digital ads focused on Kids/Baby Toys & Books from January 2021 to December 2022. 68% of their budget went towards Facebook ($956K), followed by YouTube at $299K (21%). Indigo did not run any Paid Search ads for Kids/Baby Toys & Books during this period.

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In 2022, Canadian Tire saw a -14% decline in toy product web traffic and a -21% decrease in its advertising budget for toy products.

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Canadian Tire spent $941K on digital ads focused on kids and baby toys from January 2021 to December 2022. 92% of their budget went towards Facebook ($862K), followed by YouTube at $49K.

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In 2022, Walmart saw a -6% YoY decline in desktop traffic and a -63% YoY decrease in its advertising budget.

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Walmart spent $663K on digital ads focused on Kids/Baby Toys & Books from January 2021 to December 2022. 49% of their budget went towards YouTube ($325K), followed by Facebook at $301K.

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In 2022, Amazon saw a -10% YoY decline in desktop traffic and a +33% YoY increase in its advertising budget.

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Amazon spent $486K on digital ads focused on Kids/Baby Toys & Books from January 2021 to December 2022. 75% of their budget went towards Paid Search ($363K), followed by Facebook at $77K.

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From 2021-2022, all brands ran Facebook ads, while Indigo did not run any Kid/Baby Toy & Book focused Paid Search ads. Geoffrey, LLC. had the highest spend on Paid Search ads at $2.2M, while Indigo spent the most on Facebook ads at $1.2M. 

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All brands ran YouTube and Display ads. Walmart had the largest YouTube ad spend at $325K, while Geoffrey had the greatest Display spend at $229K.

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Facebook saw a total spend of $3.2M and an average CPM of $4.7. Indigo saw the highest investment at $1.2M. Link posts were the most popular ad format, with 57% of the ad spend. The top metros targeted included Hamilton and Toronto. 

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Indigo allocated 48% of its $956K Facebook budget in Q4 2021 and 25% in Q4 2022.

Indigo got a head start on their holiday ads in 2022, with creative running in October compared to November in the previous year.

In 2022, their holiday campaign featured real photos of people, whereas in 2021, their campaign featured toy renders.

Both campaigns featured a CTA with a gift list driving viewers to the brand’s kids’ gift shop. Copy emphasized giving the best gifts this year.

2022 Holiday Campaign

Spend: $47K |Imp.: 19M |CPM: $4.1

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2021 Holiday Campaign

Spend: $151K |Imp.: 30M | CPM: $5.1

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Canadian Tire devoted 94% of its $862K Facebook budget to ads in December, allocating 48% for ads in December 2021 and 46% for ads in December 2022.

Canadian Tire's holiday ads ran from December 12th to 24th, targeting shoppers looking for last-minute gifts and offering deals such as a "super sale" or CT Money bonus.

In their holiday campaign in 2022, Canadian Tire featured kids toys and other products together.

2022 Holiday Campaign

Spend: $293K |Imp.: 70.3M | CPM: $4.2

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2021 Holiday Campaign

Spend: $381K |Imp.: 70.5M| CPM: $5.4

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In 2022, Geoffrey, LLC.’s top-performing paid search keyword was “toys r us” with 360K visits. Next to “toys r us”, the brand allocated the most budget to the keyword “lego” which had a much higher CPC at $4.07, generating just 4.4K visits. Ad copy promotes being able to shop online or in store. 

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Amazon focused on broad keywords like "toys" and product-specific keywords like "fidget toys". Additionally, they bid on competitor-branded keywords such as "toys r us." In the ad headlines, Amazon uses the keyword followed by "at Amazon" and highlights their free 2-day shipping option in the ad description.

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$924K was spent on YouTube ads during the analyzed period. The average CPM was $13.2, with 47% of total ad spend going toward ads 10 seconds long and 42% going toward those 6 seconds long.

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In the video below, Walmart spent 62% of its YouTube ad budget in January 2021 to show how a family saved money while shopping at Walmart. The ad is family-focused and highlights the children's excitement when receiving new toys and the parents' joy in being able to provide extra for their kids.

Spend: $211K |Imp.: 16M| CPM: $13.2

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Additionally, Walmart utilized videos shared by various toy brands, such as Calico Critters and Hasbro, as YouTube ads. Some of these toy-specific ads mentioned being able to purchase the toys at Walmart, while others did not, and simply linked to Walmart.

Spend: $80K |Imp.: 6M| CPM: $13.2

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Spend: $72K |Imp.: 5M| CPM: $13.2

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Spend: $70K |Imp.: 5M| CPM: $13.2

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Spend: $567K |Imp.: 8K| CPM: $13.2

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Indigo ran the following three YouTube ads in November 2022 as part of their “‘Tis The Season” campaign. These 6 seconds ads featured children unboxing gifts, playing with toys and reading. The Indigo logo appears in the bottom right corner and indigo.ca is featured in large letters across the screen at the end of each video.

Spend: $237K | Imp.: 18M | CPM: $13.2

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Spend: $34K | Imp.: 3M | CPM: $13.2

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Spend: $27K | Imp.: 2M | CPM: $13.2

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In November 2022, Amazon spent $23K on the 6-second YouTube bumper ad below. The campaign creative for this ad shows a vintage 70s style video with the catchy jingle “Save big at Amazon” paired with onscreen text that reads “Save big on toys.”

Spend: $23K |Imp.: 2M| CPM: $13.2

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The competitive set invested $440K into Display ads with an average CPM of $5.80. 96% of ad formats were display image ads. Top publishers included The Weather Network and Funnyjunk. 

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Geoffrey LLC. spent 83% of its $229K display budget in Q4 2021. During the quarter, the company ran a Black Friday and Holiday campaign for Toys”R”Us. The Black Friday campaign creative utilized gifs, whereas the holiday campaign featured static images and generated a lower CPM overall. Both campaigns ran in English and French.

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Similar to Geoffrey LLC., Indigo allocated 82% of its $158K display budget in Q4 2021 with a Holiday Gift campaign, yet generated a much lower average CPM. The campaign featured their “Top 20 Gifts of 2021,” including Catan, a chess board, plush toys, Uno and more. Gifs and image ads generated similar CPM rates of $2.8 and $2.7, respectively.

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*Web traffic is an estimation of Kids/Baby Toys and Books traffic looking at web folders with the keyword “toys”. Desktop traffic only.

**Ad spend includes Search, Facebook, YouTube & Display ads focused on Kids/Baby Toys and Books in Canada.

**Geoffrey, LLC. includes Toys”R”Us and Babies”R”Us.

*Spend is a directional approximation and does not include retargeting, or behavioural targeting