The Poster Child for Compliance: CARU Updates Its Advertising Guidelines for Children’s Advertising

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In its first major update since 2014, the BBB National Programs’ Children’s Advertising Review Unit (CARU) announced on July 29, 2021, the issuance of its revised CARU Advertising Guidelines (the Revised Guidelines), widely recognized industry standards to assure that advertising directed to children is not deceptive, unfair or inappropriate for its intended audience. The Revised Guidelines will go into effect on January 1, 2022, and will apply to children under the age of 13 across all child-directed content no matter the platform. The previous CARU guidelines applied primarily to children under the age of 12.

CARU, which is the nation’s first Safe Harbor Program under the Children’s Online Privacy Protection Act (COPPA), helps companies comply with laws and guidelines that protect children from deceptive or inappropriate advertising and ensure that, in an online environment, children’s data is collected and handled responsibly. When advertising or data collection practices are misleading, inappropriate, or inconsistent with laws and guidelines, CARU seeks change through the voluntary cooperation of companies and, where relevant, enforcement action. CARU monitors child-directed media to ensure that advertising is compliant with CARU’s self-regulatory guidelines.

The Revised Guidelines recognize the growth over the past decade in online platforms and new immersive forms of child-directed interactive media and have been updated to more specifically address digital media, video, influencer marketing, apps, in-game advertising and purchase options in games, social media, and other interactive media in the children’s space. In addition, recognizing the importance of diversity and inclusion in ad creative, the Revised Guidelines hold advertisers accountable for negative social stereotyping, prejudice or discrimination.

While the core principles of the CARU guidelines have not changed, the Revised Guidelines move beyond television-centric requirements to address and reflect today’s digital advertising environment. The Revised Guidelines now (i) contain a new section dedicated to in-app and in-game advertising and purchases; (ii) contain a new guideline requiring that advertising not portray or encourage negative social stereotyping, prejudice or discrimination; (iii) incorporate updated Federal Trade Commission (FTC) guidance on endorsements and influencer marketing; and (iv) move the privacy provisions into a separate, freestanding guidelines document made available by the BBB National Programs’ Self-Regulatory Guidelines for Children’s Online Privacy Protection, which will be updated when the FTC publishes its revised COPPA regulations. Other key updates in the Revised Guidelines include the following:

  • The section on “Blurring of Advertising and Content,” which addresses the practice of native advertising in the children’s ad context, states: “Some Advertising will require disclosures or contextual cues to help Children recognize it as Advertising. Attention to the wording used in Ads and common-sense 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. Some Advertising, due to its wording, design, and context, may be so clearly commercial in nature that it is likely to be recognizable as Advertising even without a specific disclosure, e.g., traditional linear television commercials or, in many instances, an Advertiser’s own branded websites, social media channels, or apps.”
  • CARU clarifies in the Revised Guidelines that placement or integration of a product, service, character or brand in editorial, educational, entertainment or other noncommercial content is not within the scope of the Revised Guidelines unless such placement or integration constitutes an endorsement. An “Endorsement” has been defined in the Revised Guidelines to mean “any Advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of any individual or the name or seal of an organization) that Children are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring Advertiser, even if the views expressed by that party are identical to those of the sponsoring Advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the Endorser and may be an individual, group, or institution.”
  • Changes in the “Material Disclosures” section of the Revised Guidelines clarify that disclosures in children’s advertising should be repeated in any long-form advertisement, not just in streaming videos or other offerings where a child can tune in at any point in the piece. This is consistent with the FTC’s position that disclosures should be repeated in media such as lengthy YouTube videos, and therefore is especially important in the children’s advertising context.
  • A new section of the Revised Guidelines clarifies appropriate practices for in-app/in-game advertising and purchases targeted to children. It states: “Advertisements, apps, or games should not use unfair, deceptive, or other manipulative tactics, including, but not limited to, deceptive door openers or social pressure or validation, to encourage ad viewing or in-app or in-game purchases, or to cause children to inadvertently or unknowingly engage with an ad. Any methods provided to dismiss or exit an Advertisement must be clear and conspicuous to children. Advertisements, apps, or games that allow children to make purchases must make it clear that the purchase involves real currency.”

Why It Matters

CARU monitors child-directed media to ensure compliance with the CARU guidelines, seeking voluntary cooperation of companies and, where necessary, referral for enforcement action to an appropriate federal regulatory body, usually the FTC or state attorneys general, when companies fail to respond to CARU’s inquiries. CARU also announced that interpretations of the Revised Guidelines will now be updated on an ongoing basis through FAQs as new challenges and questions about application of the Revised Guidelines arise. Beginning in January 2022, CARU will begin actively investigating cases of noncompliance with its Revised Guidelines. As the Revised Guidelines more clearly spell out the factors that determine when an ad is primarily directed to children under age 13, companies looking to determine whether their advertising to children is compliant with the Revised Guidelines should reach out to a Manatt advertising, marketing and media team member, who is standing ready, willing and able to assist with the review.

In addition to working with legal counsel to ensure COPPA and CARU compliance, advertisers can also take advantage of CARU’s Supporters’ Council, which provides certain benefits to help members with their compliance. CARU, which in 2001 became the first COPPA Safe Harbor Program, helps 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 prescreening services and will review members’ scripts, storyboards, television commercials and micro websites for compliance. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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