Young children comprise one of the most vulnerable demographics when it comes to advertising. In an effort to shield young children from misleading, deceptive, and inappropriate advertising, the National Advertising Review Council established the Children's Advertising Review Unit ("CARU") in 1974 as a self-regulatory program designed to promote responsible children's advertising. CARU is administered by the Council of Better Business Bureaus and governed by a set of standards that take into account the susceptibilities of children (i.e., inexperience, immaturity, lack of cognitive skills to evaluate advertising, etc.). CARU creates guidelines based on these standards and periodically updates those guidelines to address the ever-evolving marketing landscape. CARU uses these guidelines to review and evaluate advertising of all kinds for truth, accuracy, appropriateness, and sensitivity exclusively as it relates to children.
CARU last updated its guidelines in 2014. Since 2014, the world of advertising has evolved immensely. For example, we have seen the meteoric rise of TikTok; the popularity of Instagram explode from around 200 million users in 2014 to over 1.3 billion users in 2020;1 celebrity influencers becoming a central pillar of advertising; the unprecedented growth of unique forms of advertising in mobile applications and in video games; and the birth of the "metaverse." Moreover, the past several years have been defined by a movement to embrace diversity and inclusion in all forms of corporate and social governance, including advertising.
To address the growing importance of these new immersive forms of child-related advertising, CARU recently updated its Guidelines for Children's Advertising. The changes in the guidelines directly reflect the new online and digital focus of children's advertising that has blossomed over the past decade, with the changes addressing digital media, influencer marketing, and in-app and in-game advertising, among other updates. CARU's new guidelines became effective January 1, 2022.
What Changed in CARU's 2022 Children's Advertising Guidelines?
Before delving into the changes, it makes sense to start with something that didn't change: the core principles of CARU's Children's Advertising Guidelines. These principles continue to focus on CARU's foundational goal of ensuring truthful and clear advertising that does not depict or promote inappropriate or unsafe behavior to children. The guidelines also continue to espouse what CARU calls the "special responsibility" that advertisers have to children who have limited knowledge, experience, sophistication, and maturity.
With the core principles unchanged, CARU's updated guidelines include five key changes that marketers should keep in mind when creating advertising targeted towards children.
1. "Children" Means Under Age 13
In what may be the biggest change in the guidelines, CARU has broadened the scope of the guidelines to apply to any advertising "primarily directed" to children under age 13. Previously, the guidelines covered advertising primarily directed to children under age 12.
To help marketers determine when advertising is "primarily directed" to children under age 13, CARU has clarified the factors it will consider in making that determination. Specifically, CARU will consider the following factors, none of which are controlling: (1) subject matter; (2) visual or audio content; (3) use of child-oriented animated characters, child-oriented activities, or incentives; (4) age of models; (5) presence of child celebrities who appeal to children; (6) language or other characteristics; (7) competent and reliable empirical evidence regarding audience compositions; and (8) evidence regarding the intended audience.
Unfortunately, despite this expanded list of factors, CARU does not provide any additional guidance on how it might weigh these factors when deciding whether advertising is primarily directed at children, so advertisers should carefully consider all these factors when creating any advertising.
2. Influencer Marketing
Reflecting the growing trend of influencer marketing in all forms of advertising media, including children's advertising, CARU updated its 2022 guidelines to incorporate the Federal Trade Commission ("FTC") guidance on influencers. Specifically, influencers (and other endorsers) must disclose that they have a material connection to the advertiser (which the CARU guidelines define as "a connection that is not expected by ordinary children"), and all endorsements must reflect the actual experiences and beliefs of the influencer. Practically, these updates should not create any new burdens on marketers, as the updates mirror the FTC's pre-existing guidance on influencers. But it is important to for marketers to be aware that CARU is now cognizant of and actively reviewing influencer content.
3. In-App and In-Game Advertising
To account for the growing amount of time that children spend on smartphones and playing video games, CARU added a new section in its 2022 guidelines specifically focused on in-app and in-game advertising and purchases. This new guidance counsels advertisers to avoid using unfair, deceptive, or other manipulative advertising in applications and video games, including "deceptive door openers" or "social pressure or validation" to encourage ad viewing or in-app/in-game purchases. The new guidance also provides that any means for a child to dismiss or exit a digital advertisement be clearly and conspicuously displayed. Finally, the guidance explains that advertisements, apps, or games that allow for purchases must make it clear that the purchase involves real-world money. Marketers in the video game and mobile application space should be particularly aware of these new guidelines and consider them carefully when developing in-game and in-app advertisements, as CARU will likely be vigilant in looking for violations of this new provision.
4. Clear and Conspicuous Disclosures
The 2022 guidelines provide new definitions of "Clear" and "Conspicuous" to better explain how material information (as defined in the guidelines) must be presented in children's advertising. "Clear" means "easily understandable by ordinary children." "Conspicuous" means "presented in a manner that is easily noticeable, i.e., difficult to miss, by ordinary children." For example, the guidelines recommend that, in audio-video advertisements, any disclosures be made in both audio and video form to increase the likelihood that a child sees, hears, and understands the disclosure. The updated guidelines also underscore the importance of increased transparency in situations where the line between advertising and non-advertising material is unclear (which is called "blurring"). Further, the guidelines also recognize that the guidance is flexible, and what constitutes an appropriate disclosure varies depending on the age of the child. For example, something that may be clear and conspicuous for a 13-year-old may not be for a 7-year-old. As a result, when designing an advertisement targeted to a specific audience of children, it is imperative to evaluate the age of the prospective audience.
5. Diversity, Inclusion, and Anti-Stereotyping
While the 2014 version of the CARU guidelines included guidance that advertisers should avoid social stereotyping and appeals to prejudice, the updated guidelines substantially expand on that sentiment. The 2022 guidelines urge advertisers to "recognize the power of their advertising to promote positive change by reflecting the diversity of humanity and providing an inclusive space where all can feel valued and respected." The guidelines go on to include a provision asking advertisers to "strive to create content that is welcoming to children of all races, religions, cultures, genders, sexual orientations, and physical and cognitive abilities." To achieve its aspirational goals, the guidelines clearly prohibit advertising that "portray[s] or encourage[s] negative social stereotyping, prejudice, or discrimination."
Although noble in their purpose, the new diversity and inclusion provisions leave much to be desired in terms of their scope, definitions, and application. The guidelines do not define what constitutes "negative social stereotyping," "prejudice," or "discrimination," leaving it up to CARU to interpret those terms on a case-by-case basis. Only time will tell how this provision will be enforced and whether that enforcement will run afoul of any broader Constitutional provisions, such as the First Amendment or Equal Protection Clause if the guidelines were, for example, ever invoked or relied in a court proceeding. For now, marketers should be cognizant of CARU's new diversity and inclusion provision, and carefully review any children's advertising with these concepts in mind.
What Do These Updates Mean For Marketers?
As mentioned above, CARU is a self-regulating program, and its Children's Advertising Guidelines are exactly that—guidelines. They are not legally binding (as a statute or formal government regulation would be); rather, they are aspirational and provide a set of best practices to follow to avoid the dissemination of potentially misleading, deceptive, or inappropriate advertising to children.
While the guidelines are not obligatory, they should be taken seriously and carefully reviewed and followed. CARU, as a unit of the Better Business Bureau National Program, has the power to challenge advertisements that it believes violate its Children's Advertising Guidelines and issue a decision regarding that purported violation. The process here is similar to challenges made before the National Advertising Division ("NAD"), and decisions from CARU can be appealed to the National Advertising Review Board. Of course, decisions issued by CARU (like the NAD decisions) are non-binding, but those who fail to comply will risk the interference of the FTC.
Regarding federal and state advertising litigation, it is possible the CARU guidelines will become a touchstone for courts when evaluating whether children's advertising is false or misleading to children, similar to how the FTC's Green Guides are used in analogous situations. Currently, however, courts seldom cite to CARU's guidelines, and it remains to be seen whether reliance on them will increase with the new updates (including, for example, in class action false advertising cases).
Footnote
1 https://www.businessofapps.com/data/instagram-statistics/.
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