Hitting a Marketing High Note1 Jan, 2013 By: Thomas Haire Response
Larry Balaban says Baby Genius sees DR-style tactics as crucial — from television to online to the coming social and mobile marketing booms.
“We like to cover all angles,” says Larry Balaban, co-founder of the Baby Genius brand of children’s music and education-based products and characters, and chief creative officer of its parent company, San Diego-based Genius Brands Intl. (OTCQB: GNUS). “DR is very specific and gets us right into the market place we’re trying to reach, segmenting and pinpointing areas you might not reach otherwise.”
Along with his three business partners — CEO and Chairman Klaus Moeller, President Mike Meader, and Executive Vice President of New Business Development Howard Balaban — Balaban initially developed the brand in 1998, seeing powerful retail success for its line of CD and video products throughout the company’s early stages of growth. Retail partners like Wal-Mart, Target and Toys“R”Us remain crucial cogs in the Baby Genius distribution wheel to this day.
But, as the market changed over the years, Balaban says the Baby Genius team has included more and more direct response marketing across all media to help build and reinforce its retail strength. The company made a major statement about its intent to maximize its DRTV marketing last year when it brought long-time industry leader Denise Kovac on board as a marketing director to head its DR division.
But, according to Balaban, the evolution of television and the Web have made almost every possible outlet in both media a DR opportunity. From the company’s major success on social shopping sites like Groupon, to the major push it received from a recent segment on NBC’s “Today,” Balaban calls it, “DR that doesn’t feel like DR.”
Still, in a conversation with Balaban, what really comes across is his — and the company’s — enduring passion for the products and the kids they help.
Creativity for the Kids
The 49-year-old Balaban is a creative wizard. “I’ve always been involved in creative, interactive entertainment,” he says. “Everything I’ve ever worked on has led back to some sort of creative influence.”
This includes his run as president of Virtual Reality Productions in New York in the mid-1990s. “I was partners with Mike Rowe, who of course everyone knows now as the host of ‘Dirty Jobs,’” Balaban recalls. “It was right before the Internet bubble and we created what we called ‘telephone entertainment calling cards’ as a way for kids to interact with their favorite TV characters on the phone.”
The company licensed characters from shows like “Star Trek” and “The Simpsons.” Balaban says, “It was innovative stuff, but with the Internet coming on, telephone wasn’t the right market. We wanted to be online, but the timing was off and our licensed partners were not going to give us Internet rights.”
But it was shortly thereafter that Balaban teamed with his three partners to create the Baby Genius brand. “There was a void in the market,” he says. “There was no brand in kids’ music besides Disney — just a lot of random stuff out there. We came up with Baby Genius as a line of CDs to become a musical guide for kids and their parents. We wanted to help parents take an active role in their kids’ development. As we said in our original slogan: ‘Music makes a difference.’”
No type of music was off limits — “lullabies, sing-alongs, classical, you name it,” Balaban contends. The company took the products directly to specialty retailers. “We went to big kids stores at the time, like Noodle Kanoodle and Zany Brainy,” he says. “And the CDs got a good response.”
At about the same time, Balaban recalls, Baby Einstein began having success in the video space (“It was VHS before it was DVDs,” he says), so the Baby Genius brand expanded into video. “The key was finding fun, simple things to make it fun for the kids to sing along, be silly and build confidence. Everything we do to this day ties back to the musical influence.”
Between 1998 and 2005, the success of Baby Genius drove the original parent company to go public and become a major distribution company for its own content, as well as third-party content. The Weinstein Co. eventually became a majority shareholder in that original company, before — in 2006 — Balaban and his partners bought back the Baby Genius brand assets and several other prominent brands, leading to the formation of Pacific Entertainment (which went public, itself, in 2009).
By that time, Baby Genius had exploded out of the music and video markets and into books, toys and other hard goods. This led to the company’s vast expansion in retail. Baby Genius products now sell in most major retailers, including: Wal-Mart, Target, Shopko, Toys”R”Us, Babies”R”Us, K-mart, Best Buy, Costco and online at Amazon.com.
The company also created a series of characters recognizable to most anyone who’s had a baby in the past 15 years: Oboe the Monkey, Tempo the Tiger, DJ the Dinosaur, Vinko the Bear and Frankie the Elephant, among others. “They’re great characters, all with musical messages,” Balaban says. “They pop up throughout all of the videos and are very integrated into our toy line.”
The company has also spent time creating co-branding partnerships throughout the years. “San Diego is a great location for this, obviously,” he contends. “We’ve partnered with the San Diego Zoo and the Safari Park for three amazing videos. We also did a great underwater adventures video with the Aquarium of the Pacific in Long Beach (Calif.).”
He also points to product promotions the company has done with businesses like Wendy’s, Taco Bell and Huggies. “We had a 37-month run with Taco Bell, selling 28 different books to children at their restaurants,” Balaban says.
But how does a product that’s had such incredible retail success from a grassroots beginning continue to push the envelope? That’s easy — by being creative with its marketing. And that means one thing: driving more parents to tap directly into the Baby Genius brand.
“Things are changing so quickly, but we’ve found so many ways to directly connect with our customers and new consumers online,” Balaban says. “Social media, and especially Groupon, have been great for us. In the past year, we’ve driven a massive number of new consumers on to our customer lists.”
Balaban is very clear in his belief that mobile technology is changing the marketing universe that Baby Genius — and all other brands — are living in. “Cable companies will not be the main delivery company of your advertising message,” he says. “Apple and Microsoft will, whether on smartphones, tablets or other Web-connected devices. It all will integrate seamlessly, I believe, and it’s our job to make sure we integrate into that format.”
But Balaban compares that job to a great leap of faith. “You’ve got to take that one big step, understand that the technology is in place and strategize to become a digital partner with the players that are out there right now,” he says. “We’re a content provider for kids CDs, DVDs, books and more, and we have to become available at every distribution point, whether that’s Wal-Mart or Groupon and Living Social. If consumers see the content everywhere, they know it’s available and easily accessible, right through that phone they never leave home without. The smartphone is the most important new delivery device.”
Driving ‘Instant Gratification’
Still, even with the focus on new marketing technologies and outlets, Balaban knows that the content is all about video. Under Kovac’s direction, Baby Genius is readying and testing a series of new DRTV spots.
“We’re testing a couple of new music products, but that’s a hard money spend,” Balaban says. “Doing traditional media like that is tough today if you don’t integrate it to work with the way people are consuming media and buying products now. That’s what this DR work is designed to do — connect with consumers who want immediate gratification and also to continue to drive folks to our traditional retail partners, too.”
Balaban also points to integrated appearances on some of TV’s most popular morning shows that have driven great results. “We often appear on popular shopping and deals segments, where they talk about available special offers for our products,” Balaban says. “Those drive incredible and immediate results for us.”
Baby Genius is also leveraging its YouTube channel with great success. “We have 15 videos on YouTube featuring bonus songs with our line of characters,” Balaban says of the channel that has more than 4,000 subscribers and has delivered nearly 11.4 million views. “We’re seeing our views grow at the rate of 600,000 per month, which we’re leveraging to drive more visitors to our site and create awareness of our other products.”
He also calls YouTube a “great equalizer.”
“When you are on YouTube on someone’s computer, phone or tablet, you’re just as big a player as anyone else,” Balaban contends. “The inherent size advantage of a company like Disney is nullified.”
But Baby Genius’ wide range of direct response marketing efforts all lead back to one thing in Balaban’s mind. “It’s about instant gratification,” he says. “Because of how content is now accessed on different devices, consumers have gotten used to having what they want, where they want and when they want it. And they’re only going to grow more used to that. Instead of hitting maybe 400,000 people with a single TV spot, now your universe can be a billion people — if you get the message out to them where they want it and they’re aware they can buy your product.”
Balaban adds, “We are leveraging direct response across all these mediums in a way to ensure consumers know they’re getting a great value for a great product for their kids from Baby Genius. People are eager to spend money to help their kids, and if we can be there with a great product at the end of a couple pushes of a button, it’s not only good for them, but it’s great for us.” ■