You can blame the internet
EC: Why Don't Cereal Boxes Have Prizes Anymore?
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Toys and cereal boxes have been longtime boon companions. Decoder rings, Rainbow Brite charm necklaces, Honeycomb bike license plates—back in the ‘80s these precious commodities could be found at the bottom of your favorite breakfast staple. But recently, cereal boxes don’t advertise a tiny amusement that might fall into your bowl one sleepy morning. Why? As always, you can blame the internet.

The original decision to add prizes to the box is credited to John Kellogg, who first tried to entice kids to eat Corn Flakes with the offer of a free book, The Funny Jungleland Moving Pictures Book back in the early 1900s. At the time, kids had to mail in for their box, sending in a proof of purchase, but manufacturers learned kids wanted instant gratification and began putting the prize directly on the box or in it. General Mills started offering its own premiums in the 1930s, sticking 12 different “Skippy cards” into boxes of Wheaties and encouraging kids to collect them all, and other brands quickly followed suit.

Online threads devoted to the demise of the cereal toy put the blame on safety risks, including a 1988 recall of some 30 million flutes and binoculars distributed in boxes of Kellogg’s cereal after they were deemed a choking hazard. That major embarrassment did result in most manufacturers shifting toy placement, with most being placed between the bag and the box lining in the 90s, but it didn’t shut down the toy factory for good.

Nor have parents and nutrition hawks—although it’s not for lack of trying. Back in 1974, cereal box toys were deemed so successful at convincing kids they absolutely need that box for breakfast that the Federal Trade Commission considered banning all TV advertising of the premiums. Then FTC Chairman Lewis A. Engman charged the advertising the toys to kids would “exploit their known anxieties or capitalize on their propensity to confuse reality and fantasy.”

So what happened to the cereal toy? A host of factors contributed to its downfall, but one of the main causes of their extinction has to do with cost. It’s no secret that toys in cereal boxes have always been a marketing gimmick, and one kids have always bought into—whether they were lured in by the Cap’n Crunch treasure chest or an Alpha Bits terrarium. But online games are a whole lot cheaper than traditional premiums like, say, a decoder ring, according to Dr. Margo Wootan, director at the Center for Science in the Public Interest. Food marketers spend about a third of their marketing to kids on television ads and another 20 percent on toys and incentives, followed by investments in sponsorships that bring in popular characters like Dora the Explorer or a Disney princess. But just seven percent of marketing expenditures are spent on online games, Wootan says, making them an inexpensive way to keep kids engaged with a brand for long periods of time.

It’s what Dr. Hayeon Song, an associate professor at the university and one of the researchers behind the study calls “advergames:” Interactive—usually online—games incorporating brand messages. In other words, cereal makers still want kids to play, but they want them to do it in a digital world where they’ll be hit up with more advertising.

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“There are people who try to figure out ways to get children interested in their product because they’re a huge market,” points out Dr. Sandra Calvert, director of the Children’s Media Center at Georgetown University. “Things like putting premiums or toys in boxes is attractive, the characters are attractive.”

In the end, the change has more to do with kids themselves, and what entertains them. Raised in an era of smart toys and gaming consoles, Wootan says today’s kids just don’t want a hunk of plastic that will fall apart in a day or two.

“Tiny little plastic toys in a cereal box are not as cool as a big giveaway or collecting proofs of purchase toward a bigger prize,” she says. “Getting a special code for an online game is just more enticing to today’s kids.” But it’s still not as much fun to dig for an online gaming coupon as a decoder ring.