Presented by the FTC: Children’s Digital Marketing and Blurred Advertising Event – JD Supra | Mobiz World

Yesterday, the Federal Trade Commission (FTC) hosted an event focused on children’s digital marketing. Here’s a rough transcript; and if you have five hours, you can watch the videos that will be published on the event page soon. The big question is whether the FTC will update its updated Testimonial & Endorsement Guides (or other mandates) with child-specific requirements based on this event. (By the way, these things used to be called “workshops.” For reasons that escape us, that term seems to be passe by the current FTC. Wouldn’t it be more festive to call them soirees, galas, thought raves, or to dos , if you wanted to rename?)

The event grew out of proposed changes to the Testimonial & Endorsement Guides. In releasing the updates on commenting, the FTC essentially relied on additional guidelines only for child-focused testimonials. For many years, the FTC has stated that all of its guidance applies to all consumers regardless of age, but that the level of knowledge of the target audience should be considered when determining which disclosures are effective. In the proposed revision, the FTC included a place marker for recommendations aimed at children, saying: “Recommendations in advertising aimed at children may be of particular importance due to the nature of the audience. In such cases, practices could be challenged that would not normally be challenged in ads targeted at adults.” At the same time, the FTC planned this event to gather more information.

The day was divided into three panels examining children’s cognitive abilities to understand advertising and advertising disclosures, potential harms from children seeing blurry ads, and possible solutions to them. Mamie Kresses, the director of the Children’s Advertising Review Unit (CARU), set the table by reviewing the self-regulatory landscape and summarizing her recent cases in the digital space.

There has been a lot of discussion about the FTC’s ban on passing rules related to advertising to children under the FTC’s unfairness jurisdiction. Congress enacted this ban after the KidVid days, when the FTC was ridiculed for its hyperbole and called the National Nanny for trying to block certain ads aimed at children. However, this should not prevent the FTC from making regulations regarding conduct it deems misleading or deceptive towards children online. This has been less discussed West Virginia vs. EPA, in which the Supreme Court ruled that regulators must have “clear authority from Congress” to enact rules on “major issues” of major political or economic importance. But this FTC shows no lack of audacity in their enthusiasm to begin rulemaking (as we will discuss in tomorrow’s blog about today’s open commission meeting).

As for the event itself, barring the outlier views (proponents who said parents can monitor effectively on the one hand, and many of the child advocates who said all digital displays to children should be banned), we think the FTC likely does tun will add some more specific guidelines for online disclosures for child-directed ads, including possibly adopting CARU’s requirements for repeated audio and video disclosures. We wouldn’t be surprised if the FTC recommended using very simple words for disclosures like “advertisement” and “paid.”

YouTube discussed its current program of icons and other disclosures specific to children and an accompanying educational program, including research showing children understand these disclosures. Quantitative research into children’s understanding of advertising disclosures is clearly a best practice.

It’s not clear if the FTC will use the Children’s Online Privacy Protection Act’s definition of “children” and focus on recommendations for those under 13 and 13+, given the amount of discussion online about the cognitive abilities and harms of those under 5 years old up to the age of 17 as well as impairments of older children that are not neurotypical and disproportionate impairments of children from socially disadvantaged backgrounds.

The day was very muddled between what is an ad and what is branded content. Some presenters, in our view, appropriately focused on an ad as something that promotes the sale of a product or service. Some moderators seemed to fail to recognize such a distinction and seemed to imply that branded content was inherently commercial. We don’t think the FTC will rush into a detailed definition of where the line is drawn between advertising and content, but it’s definitely an area that content creation brands (and who doesn’t these days?) are in Keep an eye and move on should carefully consider where you draw those boundaries.

There has been a lot of discussion about advergaming. In the first panel, which focused on children’s cognitive abilities, the panel talked about virtual influencers and noted that many avatars seem to be very friendly. They hypothesized that young children would be more likely to view these influencers as friends and trustworthy.

The FTC is open to further opinions and particularly welcomes quantitative research in this area. It will keep the comment period open for another month.

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