ADventures in Law

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When the FTC announced it was doing a <a href="https://www.ftc.gov/news-events/events/2022/10/protecting-kids-stealth-advertising-digital-media">workshop</a> focused on children’s digital marketing that would be followed by a <a href="https://www.ftc.gov/reports/protecting-kids-stealth-advertising-digital-media-ftc-staff-perspective">Staff Report</a>, I was as giddy as a kid on Halloween. But now I feel like I got more tricked than treated, largely because the Report lays out a fair number of musings without being clear about any shift in the enforcement landscape. For those who want the executive summary, here are the Report’s “recommendations”:

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(1) Don’t blur ads. (2) Disclose ads orally and in writing. (3) Disclose ads with icons. (4) Educate kids about ads. (5) Platforms should require ad disclosures and allow parents to block access to anything with a disclosure. When the workshop was announced, the <a href="https://www.ftc.gov/news-events/news/press-releases/2022/05/ftc-hold-virtual-event-protecting-kids-stealth-advertising-digital-media">press release</a> was a bit salacious, with the title of the event seeming to suggest the FTC came in with an agenda rather than an open mind on investigating how children understand digital ads: “Protecting Kids from Stealth Advertising in Digital Media.” The workshop itself was a frustrating day of advocates saying advertising to kids is bad and industry saying parents are the best ones to make decisions for their kids. (Although there were some very helpful presentations and submissions from Google about creating programs to identify ads to kids and educational programs, as well as research.) We all need to be realistic and start from the premise that while advertising pays for the internet, we need to make sure viewers of any age know when they are seeing ads. Going down the rabbit hole of whether children have the cognitive ability to process advertising is not productive; this is not an issue the FTC should or will solve. The Report opens with a one-pager from BCP Director Sam Levine telling us that the FTC is doing what it can to take the burden off parents and shift it to operators, creators and platform owners who must do more than have clear disclosures to protect children from blurred advertising harm. He tells us, with italics for emphasis, that “there is no silver bullet.” I think this might be Sam’s code for “this Report is not going to tell you much.”

The problem, and this was a problem at the workshop as well, is a lack of definition and a lack of context. “Blurred advertising” at times seems to mean any sort of advertising that kids see, advertising indistinguishable from content and with no disclosure at all, or something in between. Definitions matter, and marketers need to know what the FTC views as a Section 5 problem. Particularly when the staff’s No. 1 recommendation was the very circular “do not blur advertising.” And then to the extent guidance was given, it was never really clear if it was in the context of pre-roll or mid-content video commercials, advergaming, kid influencers, or anything else. The FTC could really advance this discussion with some examples similar to those from the dot com disclosure guides, which were rooted in specific platforms. The Report seemed to start from the premise that the way traditional video ads appeared on old-school TV was A-OK. The staff recommended that similar bumpers be created before and after an online video ad break – but then went on to say that far more was required, including disclosure of any ads in writing and orally. And not just “This is an ad,” but also include “important” information about an ad, like “This is an ad for NeoToys because they want you to buy NeoToys.” Even this, the staff said, was probably not sufficient to protect very young kids, and they went on to recommend (require?) one ad icon to be used across the web by everyone (staff might want to check in with their colleagues in the Competition Bureau to see how they feel about that), education, and the ability for parents to block anything with or including ads. So, what is an advertiser that wants to communicate to those under 18 (because this was not limited to under 13) to do? I have long thought this should be a problem that platforms solve. Make things uniform and easy. But I am not the boss of these things. That said, here is what I suggest:

Any video ads directed to kids online ideally should have a verbal disclosure at the top and embed an ad “bug” or watermark throughout. I leave it to you to decide if you have to include “because we want you to buy our stuff” for extra credit.

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Use “ad” or maybe “paid.” Words like “sponsored” for kids are frowned upon.

Stick with ad formats that more closely resemble ad formats in the real world.

If an entire piece of content is advertising, the FTC staff’s recommendations uniformly are important. Don’t think “How much disclosure do I really need?” but rather “How much more disclosure can I add?”

Use child influencers with caution, and in particular any campaign involving large numbers of child influencers. The disclosures needed will be onerous and the auditing/monitoring time-consuming.

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Approach any “out of the box” ideas with even greater caution. If the staff has concerns with pre-rolls, it is unlikely to appreciate an in-game avatar product spokesperson.

No Silver Bullet: The FTC’s Staff Report on Kids’ Digital Marketing Workshop