ADVERTISING, MARKETING & PROMOTIONS >> ART · ADVERTISING, MARKETING PROMOTIONS the product information on the third-party websites selling the playset was incorrect and that batteries

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CHILDREN’S ADVERTISING UPDATE: CARU YEAR IN REVIEWWhile children’s advertisers spent most of 2013 complying with the FTC’s changes to the Children’s Online Privacy Protection Rule (COPPA) (See a previous alert here), the Children’s Advertising Review Unit of the Council of Better Business Bureaus (CARU) continued to open cases involving advertisements that were directed to children and failed to comply with CARU’s Self-Regulatory Guidelines for Children’s Advertising (the CARU Guidelines). Given the industry’s current focus on COPPA, children’s advertisers should be reminded about their obligations under the CARU Guidelines as well.

By way of background, CARU represents the children’s arm of the advertising industry’s self-regulation program and evaluates child-directed advertising and promotional material in all media to advance truthfulness, accuracy and consistency with the CARU Guidelines and relevant laws. In 2013, CARU monitored more than 3,973 commercials, pre-screened more than 144 advertisements, and closed 31 cases.

Children’s advertisers should pay particular attention to the sections outlined below when engaging in any marketing directed to children, as these areas have been the subject of recent CARU scrutiny:

UNSAFE OR INAPPROPRIATE ADVERTISING TO CHILDREN“Safety first” was CARU’s mantra in 2013, with CARU bringing a number of cases involving advertisements for products that were allegedly “unsafe and inappropriate” for children.

Throughout the year, CARU continued its vigilance against products that posed safety risks to children, such as face cleansers, medicated poison ivy cleansing foam and other products that were labeled “Keep Out of Reach of Children.” CARU also held that fish oil supplements should not be advertised to children – not because the supplements were dangerous to children when used as directed – but because children (particularly those that could not yet read) may mistake the supplements for candy and accidentally ingest a harmful amount.

CARU continued to open inquiries against advertisements which failed to depict adult supervision in instances where children engaged in activities that presented safety risks. For example, CARU brought a case against an advertisement for an electric scooter which included a “Parental Supervision recommended” disclosure in the audio and video, but failed to show any parental supervision in the commercial itself. CARU also brought a case against a television commercial for an electric powered skateboard, which disclosed the need for parental

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This past year, CARU’s inquiries were particularly focused on advertisements involving

safety issues, inadequate disclosures, sweepstakes and contests, and online privacy

protection. CARU’s focus in these areas may suggest heightened scrutiny throughout

2014 as well (particularly with respect to online privacy protection, in light of the

COPPA changes). As such, children’s advertisers should pay particular attention to the

outlined sections above when engaging in any marketing directed to children.

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supervision and even included adults in the spot. According to CARU, however, the adult supervision in the spot was not meaningful because the adults wore shaded helmets (so the audience could not see where they looked), and the adults did not appear to be concerned about the children’s actions. The advertiser also argued that the warnings on the product packaging and the product label emphasized the need for parental supervision so that additional disclosures were not required in the spot itself. CARU was not persuaded by the advertiser’s arguments, citing well-established precedent that advertisements that are inadequate on their face cannot be cured by supplemental information provided elsewhere. According to CARU, because a television advertisement is the child’s first point of contact with a product, the ad must make clear to children the manner in which the product should be used. CARU further explained that video supers in television advertisements are not reliable methods of disclosing material facts to children because young viewers are often unable to understand them.

CARU also continued to enforce its guideline prohibiting “inappropriate” advertising and content to children, finding that books intended for children over 12 years of age, which featured “murderous escapades,” should not be advertised to children because they invoked feelings of fear and anxiety in

children. CARU also questioned whether the film “Iron Man 3,” which is rated PG-13 by the Motion Picture Association of America (MPAA) for “sci-fi action violence, and brief suggestive content” was inappropriate for children and referred the matter to the MPAA, under the terms of CARU’s referral agreement with the MPAA.

ADEQUACY OF DISCLOSURESConcerns about the adequacy of disclosures in children’s advertising resulted in several CARU cases in 2013. Under CARU’s Guidelines, all disclosures material to children should be understandable to the children in the intended audience, taking into account their limited vocabulary and language skills, and advertisers should choose simple words to convey these disclosures (e.g., “You have to put it together”). These disclosures should also be conspicuous in the advertising format and media used (e.g., in television, advertisers should use audio disclosures when possible). According to CARU, disclosures regarding whether products need assembly, whether an item essential to the use of the product is not included in purchase (e.g., batteries), and whether products or accessories must be purchased separately are material disclosures that must be conspicuously disclosed.

Tellingly, CARU brought a number of cases involving advertising that failed to adequately disclose what was

included in the initial purchase of the product. For example,CARU brought a case against a television advertisement for a toy pirate ship, which depicted several accessories and mini-figurines. In analyzing the case, CARU had to determine whether children could be misled as to what was not included in the initial purchase. In instances such as this, where the advertiser does not provide consumer perception evidence, CARU routinely steps into the shoes of the child consumer and uses its experienced judgment to determine the reasonable message conveyed. Using this discretion, CARU determined that, because the commercial depicted more mini-figurines than came with the initial purchase and did not disclose in the audio which products must be purchased separately, children could be misled by the commercial. CARU was not persuaded by the advertiser’s argument that the island shot at the end of the commercial showing the exact depictions of the playset corrected the misimpression, finding instead that the island shot failed to clearly depict what was included with the initial purchase.

“Batteries not included” disclosures have always been a high priority for CARU. Not surprisingly, CARU opened a case against a television advertisement for a toy playset which failed to disclose “batteries not included” — only to find that

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the product information on the third-party websites selling the playset was incorrect and that batteries were included with the playset. Accordingly, advertisers should check any third party websites selling their products to ensure that the information describing their products is correct and up to date.

SWEEPSTAKES AND CONTESTSBecause of the appeal of sweepstakes and contests to children, CARU has implemented guidelines to ensure that advertisers take special care in using these promotions so as not to exploit children’s immaturity. Under the CARU Guidelines, advertisers should recognize that children have unrealistic expectations about their chances of winning and should clearly disclose the prizes, free means of entry, and the likelihood of winning in language that is readily understandable to children (“Many will enter, a few will win”). In addition, all prizes should be appropriate to the child audience. (In other words, children’s advertisers should not give away a Swiss army knife, a pack of cigarettes or DVDs or videogames rated “M” or “R” as a prize. A trip to Vegas is also not a good idea, yet advertisers have tried it).

These material disclosures should also be clearly communicated to the intended audience. For example, in 2013, CARU opened an inquiry involving a child-directed sweepstakes,

which failed to disclose in the television voiceover that “Many will enter, few will win.” CARU similarly opened a case involving a sweepstakes that failed to disclose the free method of entry in the television voice-over, but had instead visually disclosed “No Purchase Necessary” at the bottom of the screen, which CARU found to be insufficient.

ONLINE PRIVACY PROTECTIONNot surprisingly, CARU spent much of 2013 updating the CARU Guidelines to reflect the new COPPA and laying the groundwork to enforce the new COPPA, particularly with respect to COPPA’s prohibition on behavioral targeting without parental consent. To that end, CARU worked with the Online Interest-Based Advertising Accountability Program to identify which child-directed websites and mobile apps may be tracking children over time and across different websites.

While CARU updated its Guidelines to reflect the new COPPA, it continued to monitor web sites for compliance with its own Guidelines for Online Privacy Protection. One case involved a child-directed website that, although included an age gate, failed to include a session cookie so that children under 13 could click on the back-button of their browsers and change their birthday to indicate they are at least 13 years of age —

after being told that they could not participate because they were under 13. According to CARU Guidelines, age-screening mechanisms should be used in conjunction with technology (e.g., a session cookie) to help prevent children from going back and changing their age to circumvent age-screening.

CARU also opened an inquiry against a sweepstakes that directed children to a web site, which the operator believed complied with COPPA under the one-time contact exception because it collected only the child’s email address for purposes of the sweepstakes. However, in reality, the operator also collected the child’s name, state and country and, therefore, needed the parent’s verifiable consent to collect this information. As such, operators of child-directed sites and apps should check to ensure that their services are not collecting more information than they are supposed to collect.

SUPPORTERS’ COUNCIL Advertisers should not feel overwhelmed if CARU compliance seems too daunting of a task. In addition to working with legal counsel to ensure COPPA and CARU compliance, advertisers can take advantage of CARU’s Supporters’ Council, which provides certain benefits to help members with their compliance. For example, CARU

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established the first Safe Harbor Program in 2001, which helps CARU Supporters protect the privacy of children online and meet the requirements of COPPA and the CARU Guidelines. Members who adhere to CARU’s Guidelines are deemed in compliance with COPPA. CARU also

offers members pre-screening services and will review scripts, storyboards, television commercials and micro websites for members. Over the past year, thirteen new companies became Supporters of CARU and its Self –Regulatory Programs.

FOR MORE INFORMATION Allison Fitzpatrick Partner 212.468.4866 [email protected]

or the D&G attorney with whom you have regular contact.

Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com

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