Marking a Milestone: New Ad Guidelines, Influencers, Gaming, and More at CARU 2021

In a world where being online is a normal part of daily life for both adults and kids, with ads woven seamlessly into online content as digital platforms evolve, advertising and data collection practices become more complex. In the children’s space, with a uniquely vulnerable audience, conversations about the evolution of advertising and privacy law for child-directed content have never been more important.

On June 8 and 9, 2021, the Children’s Advertising Review Unit (CARU) virtually convened experts in children’s advertising, privacy, influencers, gaming, educational technology (ed tech), and state and federal regulations around the globe for our annual conference, CARU 2021.

This year, on top of valuable conversations from an impressive line-up of speakers, the CARU team unveiled progress towards updated Children’s Advertising Guidelines, currently projected to be released in July 2021, and scheduled to go into effect on January 1, 2022. 

If you were unable to attend this year’s conference, here is a short wrap-up of some key moments and discussions. Full recordings of all sessions are available to conference attendees in the Attendee Hub and will be available to the public in September. 

Announcing the Updated Guidelines

The discussion around the updated CARU Advertising Guidelines, Marking a Milestone, had all eyes and ears on BBB National Programs leaders Mary Engle, EVP Policy, Mamie Kresses, VP of CARU, and Dona Fraser, SVP Privacy Initiatives. The newest iteration of the Guidelines represents a continuation of CARU’s decades-long process that began in the early 1970s to ensure that the Guidelines designed to protect children from misleading advertising keep pace with the latest industry, regulatory, and technological advancements.

Speakers outlined that the scope of the Guidelines will change in three ways. 

1. The CARU Advertising Guidelines will apply across the board to advertising primarily directed to children under the age of 13. This updates the existing guidelines, which set this threshold at under age 12, except for provisions related to the Children’s Online Privacy Protection Act (COPPA). 
2. The Guidelines will be modernized to be less television-centric in defining the factors used to determine when an ad is directed to children.
3. The privacy provisions will be moved into a separate freestanding guidelines document that will be updated accordingly when the FTC publishes its revised COPPA regulations. 

Key substantive changes to the revised Guidelines will address new forms of media that have grown exponentially in size and prominence since the last revision. There has been a sea of change in the types of advertising now commonly directed to children, including through digital media, influencer marketing, in-game ads, in-app advertising and purchases, and social media. CARU’s more recent cases have addressed problems in these advertising formats, and the revised Guidelines will provide clarity on CARU’s and the FTC’s guidance on advertising through these media. 

The revised Guidelines will articulate strengthened diversity, equity, and inclusion principles, including a provision against negative stereotyping in ads, the violation of which could be the basis of a CARU investigation. 

CARU emphasized during the panel that while the Guidelines apply primarily to advertisers, all participants in the ecosystems that create and deliver advertising and content to children - brands, influencers, advertising and PR agencies, and developers - should become familiar with them to “bake-in” advertising by design from the start. This awareness is especially critical today because of the blurring of lines between companies providing content and services that go into creating ads. 

For an interactive, in-depth exploration of these topics and more, be sure to sign up for Kidvertising, CARU’s one-day workshop dedicated to navigating the revised Guidelines.

Age-Appropriate Design

During the CARU 2021 keynote session, Stephen Bonner, Executive Director of the UK’s Information Commissioner’s Office (ICO), discussed the ICO’s recently enacted Age-Appropriate Design Code, why it is needed, what it means for companies operating in the children’s space, and how it will be implemented.

The Code consists of 15 technology-neutral standards of age-appropriate design that online services must build into their processes if the services are accessed by children. These standards are outlined in detail on the ICO website and address principles such as transparency and data minimization, as well as profiling, geolocation, and connected toys.  

Bonner emphasized that at the core of the Code is the maxim that “you need to demonstrate that you are operating in the best interests of the child in what you’re doing,” and that this concept runs “like a golden thread through everything in the Code.” 

In response to a question about the different age thresholds between the ICO Code of under 18 and under 13 for COPPA, the keynote moderator Dona J. Fraser noted that our organization has taken the position that what some legislators propose, raising the age of COPPA, is not a solution. She went on to say that “the Code provides great guidance on how we can in some ways modernize COPPA and keep it where it is but also address that 13-17 group” through a self-regulatory teen privacy program.

Speaking of the Teen Space...

A consistent theme throughout the conference was the shifting age of a child. Across borders, and within the U.S., there are different definitions of a “child.” On the Global Footprints panel, speakers representing global brands, the International Council for Advertising Self-Regulation (ICAS), and Brazil’s CONAR agreed that self-regulation can oftentimes respond better and more quickly to novel or evolving issues such as the varying “age of a child” than regulators or legislators.

Panelists discussed how credibility and trust are paramount in the children’s advertising space as well as the importance of advertising by design, which requires building privacy and compliance into the marketing process from the very beginning.  

Guy Parker, Chief Executive, U.K. Advertising Standards Authority and President of ICAS observed that when self-regulatory entities have “the buy-in of responsible businesses and you listen to them and work with their expertise and understanding of advertising and marketing, then you end up with better regulation, you end up with more effective regulation and more compliance.”  

In More than a Number, a much-anticipated panel all about “Gen Z,” defined as individuals born between 1996 and 2012, Kathleen Hessert, Founder and President of WeRGenZ, discussed that this generation makes up 40% of the U.S population, spends $50 billion annually, and influences $750 billion in household spending.

Hessert was joined by a panel of Gen Z students who outlined key characteristics of their generation, one of which is their impact on forcing brands to move from the sidelines and take a stand on social and political issues.

Navigating Hot Topics 

Conversations about best practices in the children’s space took a different turn during the Home vs. School session. A diverse panel of thought leaders and corporate professionals addressed the difficulties faced by many ed tech companies during the COVID pandemic when the need for ed tech services changed from “nice to have” to “need to have.”

In addition to COPPA and the Family Educational Rights and Privacy Act (“FERPA”), the panel discussed the importance of ensuring that all state student privacy laws are understood and followed, as they often have specific limitations for contextual and targeted advertising on platforms used by schools. 

Our Kid Influencers panel continued the discussion of hot topics looking at influencer marketing in the children’s space. As the landscape continues to evolve and influencers gain more bargaining power, panelists addressed topics such as the demand for moral clauses that prohibit socially irresponsible or unacceptable conduct as well as how to draw the line between influencer content directed to parents and content directed towards kids.

The hot topic of the evolution, and recent explosion, of advertising in online gaming was the primary focus of the Playing it Safe panel. Game developers are seamlessly integrating ad content into virtual worlds. Although there may be a gray area around whether brand experiences in the metaverse should be labeled as ads, safety by design principles dictate that the default should be to identify this content as advertising. Panelists discussed the pros and cons of AI moderation systems, the responsibilities of game developers in creating innovative ways to get verified parental consent on these platforms, as well as the safe, and not-so-safe spaces, created in these online communities. 

The Year in Review

CARU 2021 closed with, The Year in Review, a discussion about the year behind us and featured a glimpse at the year ahead. The FTC discussed current initiatives relating to children and questions it is considering in the ongoing COPPA Rule review, including whether the definition of “personal information” should be expanded and to what extent COPPA addresses risks to children’s privacy in the evolving digital landscape. 

Following that discussion, the CARU team reviewed several online privacy decisions from the last year, each of which highlighted the importance of taking appropriate steps to comply with COPPA or, as appropriate, to deter children under 13 from using services not intended for them. On the advertising side, CARU’s cases highlighted the importance of viewing ads from a child’s perspective. In one case, the TV commercial, which featured a doll crying colorful “jelly” tears, created the net impression that these tears were edible when they are not.  

The main takeaway is that education and collaboration are key in the children’s space. CARU works with companies of all sizes to ensure they fully understand the Advertising Guidelines. CARU also provides prescreening services to review advertising and spot potential issues before ads go out the door, as well as a safe harbor program, which ensures that participants’ data collection and security practices meet FTC and CARU requirements. For more information, contact us at infocaru@bbbnp.org.