Metaverse May Be ‘Blurry,’ But Expectations For Advertising To Children Are Not – CARU

The Children’s Advertising Review Unit of the BBB National Programs Inc. tells marketers its guidelines apply to ads in the metaverse, and the watchdog will ‘strictly enforce’ in the space.

The metaverse is a “blurry” frontier where ads can be seamlessly woven into content, but rules and guidelines for advertising to children still must be observed and may even apply when children aren’t the intended audience, says the Children’s Advertising Review Unit of the BBB National Programs, Inc.

“Our warning puts advertisers, brands, influencers and endorsers, developers and others on notice that CARU’s Advertising Guidelines apply to advertising in the metaverse and that CARU will strictly enforce its Guidelines against metaverse advertising,” said Mamie Kresses, vice president of CARU, in a 23 August release accompanying a compliance warning posted on its website.

While the watchdog group notes the blurring of advertising and non-advertising content directed to children isn’t new, “the sophisticated and varied ways in which blurring can occur in metaverse spaces are a special concern and focus for CARU,” according to the compliance warning. CARU encourages voluntary cooperation with its guidelines and notes that, where necessary, it will refer non-compliant marketers to the Federal Trade Commission.

“This mix of platform types within the metaverse means that when it comes to compliance with applicable rules and regulations, there is not now – nor is there every likely to be – a one-size-fits-all approach." – Rashida Gordon

CARU attorney Rashida Gordon acknowledges in a same-day blog post there is debate over whether the metaverse – a three-dimensional virtual reality where users can interact using digital avatars – is already here or will arrive soon. She quotes a digital trends expert who says while there is no metaverse yet, there are several platforms that can be considered “proto-metaverses,” including Roblox, Fortnite, Minecraft and Meta’s Horizon World.

Major cosmetics companies, including L’Oréal SA, Procter & Gamble Co., The Estee Lauder Companies, Inc. and e.l.f. Cosmetics, Inc., are filing trademark applications to cover virtual representations of their brands after Facebook (now Meta Platforms) announced its vision for the metaverse late last year. Meta envisions an immersive digital world where users can travel through interconnected virtual spaces to engage with friends, play games and spend money on items real or digitally coded. Whatever shape the metaverse takes, it will likely include virtual stores where visitors can try on or purchase products, and it is seen by some in the industry as a place to engage new, young shoppers (Also see "Beauty In The Metaverse: Top Companies Move To Fence Off IP With Eyes On Seminal Court Cases" - HBW Insight, 23 Mar, 2022.)

Gordon says regardless of when it arrives and in what form, the metaverse will have a “profound impact on the digital footprint and online experiences of children” since ads can be blended into interactive gaming, entertainment and educational content, along with influencer marketing and user-generated content.

CARU, which keeps an eye on all advertising in any medium directed to children under the age of 13, as well as content for mixed audiences of both children under 13 and older teens or adults, says marketers that do not intend to target children in the metaverse must keep in mind that children will engage with their content.

“This mix of platform types within the metaverse means that when it comes to compliance with applicable rules and regulations, there is not now – nor is there every likely to be – a one-size-fits-all approach,” Gordon says. “Advertisers and operators need to plan now and begin to tailor their advertising and privacy practices in the metaverse with children in mind.”

She recommends that companies ensure from the get-go that they comply with CARU’s Advertising and Privacy Guidelines, which help firms avoid deceptive, unfair and inappropriate communication to kids and responsible handling of children’s personal data. CARU updated the guidelines, effective on 1 January, moving beyond a television-centric focus to reflect today’s digital advertising environment, including in-app and in-game advertising and purchases. The update applied guidelines for ads targeting children under 13, whereas the previous guidelines pertained to children under 12. 

Additionally, Gordon advises marketers to follow the Federal Trade Commissions’ Children’s Online Privacy Protection Act (COPPA), which imposes requirements on operators of websites or online services directed to children under 13 years of age as well as on operators of other websites or online services that have actual knowledge they are collecting personal data from children.

Text Size, Borders Can Separate Ads From Content

CARU’s compliance warning signals that enforcement activity could be coming. The group highlights key points marketers should note within its guidelines to clearly distinguish advertising from non-advertising content.

Ads must be easily identifiable as ads, CARU says, noting marketers should take “extra care” to be transparent when those ads target children. Some advertising will require disclosures or contextual cues to help children recognize ads.

“Attention to the wording used in ads and commonsense design techniques, including text size and color, positioning and other visual or contextual cues, such as the borders around or background shadings of ads, can substantially increase the likelihood that children will recognize an ad as an ad and reduce the potential for children to be misled,” CARU says.

The metaverse also presents opportunities for sponsored avatar influencers and computer-generated influencers to interact directly with children to promote brands, branded games, and other goods and services. Revised guidelines “make clear that influencers are endorsers and that both advertisers and influencers are responsible for claims made and for clearly and conspicuously disclosing an influencer’s relationship to the advertisers,” the BBB National Programs unit says.