Although toys are the marquee product at the American International Toy Fair, they are really just the focal point of a much larger panorama of marketing strategies, entertainment programs and emerging cultural trends that are on display at the annual event in New York City. Toy manufacturers are now closely associated with a variety of other industries, from production studios to marketing companies to ad agencies and retailers. As a result, Toy Fair has become a kind of bellwether of upcoming trends and a place where a wide cross-section of people come to shop not just for toys, but also for insights into what’s new and hot.

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Explain Toy Fair to someone not familiar with it, and it’s like you’re explaining the rules of a wild board game sprung from the mind of a demented toy inventor.

A Toy Fair attendee is one of thousands of players trying to maneuver his piece through an unwieldy maze of industry professionals in showroom after showroom, clamoring for space in crowded elevators that never quite seem to move fast enough, while being besieged by an army of toy demonstrators and costumed characters that keep an ample portion of New York City’s struggling actor community employed for a few days.

If Toy Fair serves as the game board, then the major motion picture studios, entertainment companies, the licensing community, advertising agencies and nearly everyone else in the kids business are the players. Each player comes to Toy Fair with a different agenda, but they all seek the same prize-to uncover the next big toy product or hot entertainment license that will generate sizzle and sales.

‘Toy Fair is one of the defining events that sets the table for kid culture in the new year,’ says Paul Kurnit, president of ad shop Griffin Bacal.

With most sales orders being written at numerous pre-Toy Fair events held by toy manufacturers, the New York event has evolved from a merchandising show to a marketing event. Toy Fair has become a venue to seek confirmation and validation of purchasing choices, examine the marketing programs in place for the toy lines and get a feel for new trends.

Non-toy companies attend not only to see what’s new in the toy business, but to investigate various business opportunities, including licensing deals, strategic alliances, cross-promotion and international activity. ‘Toy Fair has evolved from being purely a product show to being a showcase of what’s happening and what’s hot in the entertainment industry,’ says Maureen Taxter, vice president and general manager of licensing for Nickelodeon.

Companies have the chance to see what their competition is up to, announce new projects, check out the latest technological innovations and begin to evaluate how their product may behave in the marketplace based on the retail buyer reaction to it.

‘The basics of Toy Fair have remained the same; the difference is the completeness, the level of sophistication and the integrated marketing now present,’ says Kurnit. ‘More and more, the non-toy involvement . . . and the licensing involvement of a given property play a bigger role in establishing the belief that trade should get behind it.’

The harmonic convergence of the entertainment industry and the toy business has turned the bigger showrooms into Hollywood-like productions while the market becomes big business for the studios, which use Toy Fair as a launching point for the promotion of their upcoming releases. ‘The media attention that Toy Fair generates is the first time that most consumers learn anything about our properties that are coming out in the year,’ says Cynthia Cleveland, president of merchandising and licensing at Universal Studios.

As the amount of licensed product produced by entertainment companies increases in inverse proportion to the shrinking number of toy manufacturers and retail buyers, it becomes more imperative than ever for studios to generate positive buzz early to get noticed. In the past, a studio could come to Toy Fair and just describe future films. Now, they come armed with scripts, customized footage and even star power. ‘There are fewer players, and they are carrying a lot of clout,’ says George Jones, president of worldwide licensing for Warner Bros. ‘That has driven us to be more focused in developing strong relationships with retailers to better understand their needs so we can work with them more closely.’

‘It’s about getting a message out to the retail and manufacturing trade about who we are and what we mean to the toy business,’ says Robin Sayetta, vice president of licensing at Discovery Enterprises Worldwide.

For the licensing community, Toy Fair ranks with the June Licensing Show as the prime event to meet with partners (toy and non-toy), gauge the reaction to the licensed line by retailers and evaluate toy manufacturers to decide which ones would be most appropriate for new properties the company represents. ‘We’re looking at who’s doing what in the marketplace,’ says Discovery’s Sayetta. ‘Who is doing things in a smart way? Who do we want to be inspired by, what are the major trends and how are we different or similar?’

‘It’s important to see what other licensors are doing with their properties and what kind of competition we have out there,’ says Wendy Daniels, director of marketing and sales at United Media.

Toy Fair attracts non-toy licensees because it is one of the first places where they can get a feel for what is going to be big in the market, to get ideas for their own products and to build their confidence that they should continue to develop products for that particular license.

International licensing agents come to Toy Fair in increasing numbers to get a jump on hot properties in the U.S. marketplace that will eventually find their way overseas. ‘The fact that there’s a toy show at Toy Fair is not the most important thing in my life, but the fact that everyone is there and you can meet with people is more important,’ says Michael Eve, managing director of U.K.-based Trigger Licensing.

For example, Nelvana will meet with international agents to construct localized and global licensing strategies for its recently announced new series as well as its more established product. French entertainment company Gaumont Multimedia comes hat in hand, ready to explain to potential master toy licensees how its preschool television series Tune of the Moon, expected to air in the U.S. in 1999, will lend itself to a full range of preschool activity toys.

While the glitz and glamour of Toy Fair centers on the big toy companies and their partnerships with studios, the meat and potatoes of Toy Fair exhibitors are smaller companies looking to secure their niche in an industry in which being a little guy means being in a constant fight for survival. But it’s at these smaller companies where some of the most innovative ideas percolate, and this year’s small company could be next year’s big thing.

‘It’s a chance for us to look at what I call the `orchids in the desert syndrome,’ the things that don’t come from big studios,’ says Richard Culley, managing director of Copyrights Promotions Group, a U.K.-based intellectual rights company. He cites the Teenage Mutant Ninja Turtles as one of those little discoveries that paid off with huge dividends. ‘We’re looking at toy manufacturers and creative developers to see what’s coming along, and to detect that magic ingredient. Toy Fair is a big sporting ground for that kind of thing.’

Understanding what’s new in the toy business is an important window to understanding what motivates children. ‘There are always useful lessons to be learned at Toy Fair because the toy manufacturers pay close attention to kids and are on the cutting edge of the trends that affect other categories,’ says Julie Halpin, CEO of kid marketing communications company Geppetto Group.

Advertisers and advertising agencies come to Toy Fair to see where the focus of the kids business is going to be, what is the source of that focus, and how it is going to be fleshed out. ‘[Toy Fair] allows us to see the extent to which we can promote and create advertising and promotional programs around entertainment properties,’ says Deb Sawch, director of marketing development for Kraft Foods.

Cross-promotion of a brand and a toy product can go a long way toward establishing brand loyalty. According to Johann Wachs, senior strategic planner for Saatchi & Saatchi’s Kid Connection, Toy Fair is an important place to find partners who can either enhance or add new dimensions to a company’s image. For example, a food company that cross-promotes with Fisher-Price makes a statement to parents about its image because of the regard that parents have for Fisher-Price.

Additionally, partnering with toy companies by placing a branded toy inside the package not only differentiates the product from competition, but also extends the time and usage occasions of that brand beyond the kitchen. ‘By adding a toy to your product, you make kids play with the brand, and you catch them at their most receptive state of mind,’ says Wachs. ‘If your brand can be linked with play, it will make the impression that much deeper. An added identity will help kids relate to [the brand] better.’

Although much has been made of the possibility of major toy manufacturers pulling out of Toy Fair, most people believe that the market is too important for anyone to dare take that step. ‘It’s hard to imagine being in the business in a major way and not going to Toy Fair. It’s one of the life bloods of this industry,’ says Warner Bros.’ George Jones.

Toy Fair presents an opportunity for a unique intersection of ideas among the collected creative thinkers of all facets of the kids business. Susan Miller, president of Momentum Partners, remarks: ‘It’s energizing, it’s crazy, it ranges from very serious business to wacky, but that’s the toy business.’