Is this The End of Targeted Ads for Kids?

In March 2022, Biden called for the end to targeted advertising to kids in his State of the Union Address.

“We must hold social media platforms accountable for the national experiment they’re conducting on our children for profit,” he said.

Research from Pixalate indicates that 80% of parents worry about their children's privacy when using apps and 73% are concerned about their children's location being tracked. Which makes sense, because behavioral targeting can be downright creepy. So, in the internet age, how should brands think about advertising their youth-focused products?

Advertising Where Kids Are

Gone are the days when kids sit in front of the television on Saturday morning, watching the newest episode of the popular cartoons. Because of the growing group of cable cutters (19.9% of U.S. Households are cord-cutters as of 2020), TV commercials are no longer an option for targeting children for the latest and greatest toy or the new McFlurry flavor at McDonald's.

According to Concordia University, children and teens spend almost $200 billion annually and brands spend more than $17 billion advertising to them each year. It's no surprise that marketing to the youth matters; brands can build loyal customers for life with a well-placed advertising campaign.

Because more and more parents are paying for ad-free content engines (YouTube Paid, Netflix, Hulu, etc.), advertisers have had to become clever to place products or brands in places where children (and some adults) don't realize that it's explicitly an ad in a traditional way. The strategy uses relationship-building to build recognition with the child. The ads are integrated into content or... the ad is content.

For example, Lucky Charms created a YouTube series starring Lucky the Leprechaun. Then, they also created a version of Candy Land to sell to kids. Or Netflix started to launch Netflix Games for mobile.

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Other ways that brands are marketing to young people are through building relationships through viral videos, using online influencers or creating brand images that are deemed relatable like Wendy's or Denny's Twitter account.

Finally, there is behavioral targeting, which is where ads placed are targeted based on personal information that has been collected. This is what many consumers and parents have an issue with.

How AI is Used to Target Children

The use of AI has allowed advertising to become more personalized. It can target ads to children based on their interests, demographics, and even the time of day. Advertisers have always used these factors to target ads, but AI allows for more sophisticated analysis and delivery systems.

Companies like Google, Facebook, and Amazon are all using AI to target ads to children. But is it necessarily a good thing?

In 2021, a report was published regarding the concerns and impacts of surveillance advertising on children. This includes using collected information from underage Facebook users such as browsing history, perceived mood, insecurities, peer interests and anything learned from their interactions. A poll was conducted polling teens 16-17 across the nation and 82% said that they had been served ads so targeted to them that it made them feel uncomfortable.

While some argue that this is a necessary evil to keep advertising afloat, others say that it's a violation of privacy and children's rights.

Biden might also be calling for an end-to-data collection related to children, especially teens who were not included in the originally COPPA protection act which prohibited behavioral advertising on apps and websites designed for those 13 and under like coolmath.com.

What do you think? Is AI in advertising becoming too personal? Are we crossing a line by targeting ads to children based on their private information?

The future of privacy-first practices is here. With more laws and restrictions coming down the pipeline for behavioral ads, advertisers may want to look at safer avenues for digital advertising.

The Growth of Contextual Advertising (For Kids)

Contextual ad spending is estimated at 178.3 billion in the U.S. for 2021. It is expected to more than double by 2027. Contextual ads do not use behavioral targeting or remarketing. No personal information is collected.

By using contextual targeting, a company can ensure that their ads are placed within content that is related to their product. For example, an ad for a racing game application could be placed within content about go karts.

CatapultX takes contextual advertising one step forward. Contextual ads are placed within video content that is related to the product or ad. So, McDonald's could serve a McDonald's ad when the show a kid is watching talk about or shows food.

This is a safer way of advertising that will keep children safe, while continuing to allow brands to market effectively.

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