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Journal Issue: Children and Electronic Media Volume 18 Number 1 Spring 2008

Children as Consumers: Advertising and Marketing
Authors: Sandra L. Calvert

Regulation of Marketing Practice

Because of age-based limits in children's ability to understand advertiser intent, the Federal Communications Commission has placed safeguards into the television advertising marketplace to protect young child audiences. Among the guidelines is the separation principle, which consists of three components. First, the transitions between an advertisement and the program content must be distinct; the program must use a constant production convention, such as “After these messages, we'll be right back,” to separate program and commercial content. Second, “host selling” is not allowed. That is, the main characters on a television program cannot sell products during that program or during blocks of commercial time adjacent to it. And, third, products being sold cannot be integrated into program content (a practice that resembles the common practice of product placements).160 In addition, the FCC has limited the time allocated to commercial content during a given hour of children's programs. It also requires “tombstone shots” that show the unadorned product in a still frame shot without all the extra toys that can be purchased with it.161

While the FCC is charged with regulating media, the Federal Trade Commission (FTC) is charged with regulating advertising.162 The Children's Advertising Review Unit (CARU), a voluntary regulatory organization created by the advertising industry, enforces broadcast standards for the industry, in part to prevent governmental interference. Although CARU has made some attempt to regulate the newer interactive technology marketing practices, many of its rules have not carried over to the Internet, video games, or cell phones. For example, websites attempt to create “sticky sites” where users spend long periods of time with branded characters.163 Such sites feature Tony the Tiger from Kellogg's Frosted Flakes or Chester the Cheetah for Frito-Lay and create content focused solely on commercially branded products.164

Early studies of online marketing practices documented the use of deceptive practices that invaded the privacy of children. For instance, popular media characters, such as Batman, would ask children for personally identifying information for a census that was being taken in Gotham City.165 Did children even understand that Batman was not real? No research has been conducted to answer that question, yet the developmental literature from the television area suggests that young children may not understand that such characters are not really interacting with them.

Such practices led Congress to pass the Children's Online Privacy Protection Act (COPPA) of 1998, which placed rules on online marketing techniques to protect the privacy of children under age thirteen.166 The new law, which went into effect in 2000, authorized the Federal Trade Commission to create and enforce rules for data collection practices at children's websites and to disclose privacy policies about data collection techniques as well as about how that information was to be used.167

After COPPA was implemented, several agencies, including the FTC, the Center for Media Education, and the Annenberg Public Policy Center, conducted an evaluation of website practices.168 All these studies found that the majority of websites linked their home page to their privacy policy. But the studies found fewer efforts to obtain parental consent or to inform parents about how the data collected on the site would be used.169

Although researchers now have a reasonably good idea of what takes place on online websites, they still know little about how children perceive, understand, or participate when asked for personally identifying information. No database as yet documents such information on the part of child consumers of different ages.

Spyware in which an outside agent installs a program on a user's hard drive, collects information about that user's behaviors without his knowledge, and then sends that information back to a marketer also poses risks that may one day cause spyware to be subjected to regulation by the FTC.170 Spyware invades privacy, poses security risks, including identity theft, and can cause computers to crash, be subject to barrages of pop-up ads, and run slowly.171

Regulators should also address the issue of whether and how to make the regulation of newer online marketing activities consistent with traditional television and film guidelines. Such existing television standards as clear separation of commercial from program content, rules about host selling, consideration of age-based skills in understanding marketer intent, tombstone shots of the unadorned product when the camera shot is still, and limits on the amount of time children can spend seeing marketed content should be considered in the context of newer media. Product placement, the emerging and perhaps preferred replacement of the fifteen- or thirty-second commercial, is also in need of additional study and regulation. With convergence increasingly bringing the varying forms of technologies together under one umbrella, it is sensible to have uniform standards for marketing to children across varying media platforms.

Ultimately, though, all of these practices have some protection because of the First Amendment guarantee of freedom of speech. Although advertisers do not enjoy the same freedom as everyday citizens in their right to speak as they wish, they have considerable leeway to present the content that they wish, and it is up to advocacy groups to demonstrate that any regulation is necessary. Indeed, the Central Hudson Test, the primary legal argument for limiting commercial speech, has been interpreted in recent years as calling for the least amount of interference in the advertisers' right to speak as they wish.172 Moreover, in many cases the online environment is not even constrained by U.S. law. Setting up an online shop in a different country, for example, can insulate users from prosecution for violating a number of laws that they would have to follow within the United States.173