Brief:
- Mattel violated self-regulations by not disclosing that some of the videos in a Barbie mobile app for kids were actually ads, according to watchdog group Children's Advertising Review Unit (CARU) in a report from MediaPost. CARU's main goal was to protect the very young users, who likely might not understand the add' intent without clear labeling.
- The in-app video ads in "Barbie Sparkle Blast" were not labeled as ads, and users couldn't stop the video or exit the screen. Users could earn virtual coins by watching these unlabeled videos to buy outfits for their Barbie avatar.
- Mattel fixed the app to include more disclosures and said that its third-party ad-serving companies would include clearer labels in ads targeting kids.
Insight:
CARU’s principles aren’t legally binding, but the advertising industry clearly prefers self-regulation over fines from the Federal Trade Commission and other government agencies. To its credit, Mattel quickly fixed the offending ads in “Barbie Sparkle Blast” to comply with the guidelines. Advertising directed at children is always a sensitive issue, especially as parents navigate the relatively new space of leaving their kids unattended with mobile devices connected to the internet.
As the digital marketing landscape expands and becomes more complex, the Mattel example exemplifies how important it is for marketers to set clear parameters with third-party partners as the brand can bear the brunt of any misdeeds, whether intentional or not.
In the past, government regulators have tended to focus on misleading “freemium” in-app offers. The FTC filed a lawsuit against Amazon in 2014 that alleged the e-commerce giant unlawfully billed parents for millions of dollars for children’s unauthorized in-app charges. The government watchdog in May said Amazon began to offer $70 million in refunds to customers for the those charges incurred by kids.
Meanwhile, European regulators are even stricter about digital commerce and privacy rules. Two years ago, Apple, Google and Amazon reached an accord that allows the U.S. companies to avoid fines for allegedly misleading people in the European Union to make in-app purchases after first providing free downloads. The three companies and French game developer Gameloft agreed to make changes to their marketing practices, The Wall Street Journal reported.
