After years of wrangling with the Federal Trade Commission (FTC) and the attorney general of New York, Google agreed to a $170 million payment in 2019 to settle child privacy complaints. This led to major changes at YouTube, with targeted ads banned for those 13 and under and new requirements for content creators to label videos as being appropriate for children.
A new report from ad evaluation firm Adalytics finds that some of these targeted ads are still slipping through the cracks, and potentially violating federal child privacy law. The revelation has prompted two US Senators to write a letter to the FTC requesting that it pick up its investigation once again, as Adalytics identified some 100 videos marked as appropriate for children were displaying ads from some 300 brands marketing products for adults (including some containing violent content).
Child privacy still in question on YouTube
It is legal in the US to advertise products meant for adults as a part of children’s programming, but Google’s settlement with the FTC expressly forbids it from placing targeted ads in videos marked as being meant for underage viewers without parental consent. This could also put the company in violation of the Children’s Online Privacy Protection Act (COPPA) once again, the country’s central child privacy law. The company also has an internal policy restricting ads containing violent content from being placed in children’s videos.
The report found violations in July 2023, and noted that ads for numerous Fortune 500 companies that incorporate targeted ads were involved. In some of these brands’ personalized ad campaigns, the highest clickthrough rates were seen from popular kids channels such as Cocomelon and Kids Diana Show. Some of the companies whose ads were displayed, such as Amazon and Facebook, have already paid fines for child privacy enforcement actions.
The crux of the issue appears to be Google’s Performance Max (“Pmax”) ad targeting algorithm, rather than brands doing anything to prompt their targeted ads to be placed in children’s videos. Advertisers have issues with auditing ads that sneak into children’s videos as Pmax does not provide granular placement reports. This may be some sort of fundamental coding flaw with the algorithm, as the report observed both YouTube and Google ads (for things like YouTube NFL Sunday Ticket and Chrome Enterprise) being placed in children’s videos.
The placement is also not benefiting brands in any way, as many of the products being placed in children’s videos require one to be 18 or older to purchase them. Advertisers say that they are frustrated by the situation, but the present level of control that Google provides does not allow them to ensure that targeted ads aren’t being placed in these videos. Advertisers can build keyword exclusion lists, but there does not appear to be an option to simply exclude all videos that YouTube labels as being intended for kids.
Targeted ads shown on kids videos include construction companies, investment tools, credit cards
The report finds that hundreds of thousands, if not millions, of kids have likely been exposed to targeted ads and tracking in this way since 2019. Senators Edward J. Markey (D-MA) and Marsha Blackburn (R-TN) have written a letter to the FTC requesting that the agency renew its investigation into Google’s compliance with child privacy laws. Privacy group Fairplay and several other nonprofits have since made their own similar requests to the agency.
Google has called the Adalytics report “misleading” and claims that ads that appear on children’s videos are based on the content of the channel or a page that they are embedded in, rather than anything in a user profile. However, the company said that it had changed the classification of some specific ads containing violent content that were mentioned in the Adalytics report so as to prevent them from running on children’s channels.
Though Google cannot serve targeted ads to kids, the Adalytics report (and other research) has found that it outfits all YouTube videos with a universal set of persistent cookies. This includes a cookie called “IDE” which is used for advertising purposes, though Google claims that its placement complies with child privacy regulations and that it is only for non-personalized purposes like tracking ad views and preventing fraud. Such cookies are legal for users of all ages if they are not used for ad personalization.
If Google were to be found in violation of COPPA, potential fines can run up to a little over $50,000 per violation. Given the amount of impacted minors, the company could be looking at a loss of billions of dollars. Since Google would be considered a repeat offender due to the child privacy case that was settled in 2019, the company would likely get little leniency in terms of any fines assessed.
