Following a $170m Federal Trade Commission (FTC) settlement related to charges that it violated the Children’s Online Privacy Protection Act (COPPA), YouTube has announced changes to its service that it says will help protect children’s privacy.

Specifically, the Google-owned video giant “now treats personal information from anyone watching children’s content on the platform as coming from a child, regardless of the age of the user. This means that on videos made for kids, we limit data collection and use, and as a result, we need to restrict or disable some product features.” Notably, YouTube is no longer delivering personalized ads to viewers of children’s videos.

According to the FTC, children’s videos are those videos intended to be viewed by children. YouTube allows content creators to specify that their videos fall under this category in YouTube Studio but says it also uses machine learning technology to identify videos that weren’t appropriately flagged by their creators.

With YouTube and its dedicated app, YouTube Kids, being among the most prominent tools advertisers have to reach children online, what do YouTube’s changes mean for advertisers? Here are the three key takeaways.

The assault on targeting continues

To meet their insatiable demand for highly-targeted ads, publishers and ad techs have given marketers the ability to target individuals of all ages with few restrictions. Even in cases where targeting might be of dubious legality or morality, the industry has largely operated as if targeting was permitted.

That is rapidly changing and targeting options are going away. Here, advertisers will no longer be able to use personalized ads on children’s’ videos. These ads, which Google previously referred to as interest-based ads, allow advertisers to target viewers based on their interests and demographics. It gleans this information from a variety of sources, including cookie-based tracking of user activity and previous activity with Google services and interactions with Google ads.

Advertisers could benefit

Ironically, advertisers might benefit from the inability to use personalized ads on children’s videos. That’s because personalized ads typically cost more than contextual ads, but it’s questionable as to how much benefit advertisers get from them on children’s videos. After all, it’s a fairly reliable assumption that children’s videos are viewed mostly by children, so advertisers attempting to reach children don’t necessarily benefit from trying to target in a more sophisticated fashion.

In fact, with cookies under assault and contextual advertising experiencing a revival as a result, YouTube’s change raises broader questions advertisers will increasingly be forced to ask about the efficacy and necessity of highly-personalized targeting.

Budgets could shift to favor influencer marketing–with caveats

For marketers looking to inure themselves to more specific audiences of children, YouTube’s change could encourage budget shifts that see more dollars being allocated to influencer marketing, which is likely to become more appealing to content creators too, given that a lack of personalized ads on their videos could cause their incomes to drop.

Proving the power of influencer marketing in this space is eight-year-old Ryan Kaji, who has some 23m subscribers to his Ryan’s World channel and was, according to Forbes, the highest-earning YouTuber last year with a whopping $26m in earnings. Many of Ryan’s videos feature toy reviews and unboxings, and last year he launched branded toothbrushes and toothpaste in partnership with Colgate.

Of course, the concerns that forced YouTube to change its policies vis-à-vis ads on children’s videos also apply to influencer marketing. Advertisers looking to employ influencer marketing to reach children must adhere to COPPA as well as the FTC guidelines for influencer marketing.

As a reminder of this, a consumer watchdog group last year filed an FTC complaint alleging that Ryan’s World was “deceiving millions of young children” by failing to disclose that videos contained ads. If an investigation is launched and finds that the complaint has merit, it could result in fines and further restrictions.

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