In September 2023, the Federal Trade Commission (FTC) published a paper highlighting the potential risks of digital advertising that blurs the lines between marketing and entertainment.

The paper called it "blurred advertising" meaning when digital advertising blends seamlessly into surrounding content.

The findings of the FTC were pulled from a workshop the organization hosted in October 2022, which provided users with a public forum in which they could discuss their engagement with advertisements within videos, video games, and other forms of digital media.

According to Michelle Rosenthal, the senior attorney and leader of the project at the FTC, they invited academics, consumer advocates, industry representatives, and the BBB (Better Business Bureau).

However, Rosenthal said, YouTube was the only prominent gaming community platform that participated, even though the FTC extended the invitation to other gaming platforms.

The findings of the FTC paper were clear: "children are finding it increasingly difficult to distinguish between advertising and other forms of content, and that this phenomenon can prompt them to make accidental purchases of unintentionally share their personal data."

The FTC is greatly concerned with their findings given the sheer number of hours children spend inside games these days.

Rosenthal said, "The report notes that 8-to-12-year-olds are spending approximately five and a half hours a day on entertainment screen time" and "13-to-18-year-olds are spending about eight and a half hours a day."

FTC has suggested that advertisers should avoid blurred advertising entirely. Instead, the FTC wrote, "game makers, social media influencers and other content creators should consider short bumpers or interstitials, such as a black or white screen, before and after the advertising message, similar to how ads are shown during the commercial breaks in television shows."

The past year, regulators and other government bodies are doing more to oversee how brands and children are engaging inside games, in the form of actual legislation and financial support for companies that build child safety tools.

For example, Kidas, a child safety tech company, received a $1 million grant from the Israel-United States Binational Industrial Research and Development (BIRD) Foundation last year, with the U.S. and Israeli governments jointly providing grant funds to Kidas and its distribution partner Overwolf. The extra funding significantly stepped-up Kidas' marketing efforts, nearly doubling the number of sign-ups to its service.

The increase in children's activity inside gaming platforms was also one of the inspirations for the reintroduction of the Kids Online Safety Act in May 2023. However, critics have pointed out that its current wording risks restricting online user's rights.

Video games continue to increase and the number of underaged users also continue to increase. This is why governments are stepping in and making the space safer and more equitable for all involved.

According to Overwolf CMO Shahar Sorek, "With the fast pace of technology, the way governmental institutions are set up, and the pace in which they're calibrated to respond, do not meet the velocity of technology in general."

Alexander Lee, "Why regulators at the FTC and beyond are turning an eye to child safety in gaming in 2023" https://digiday.com/marketing/why-regulators-at-the-ftc-and-beyond-are-turning-an-eye-to-child-safety-in-gaming-in-2023/ (Sep. 20, 2023).

Commentary and Checklist

According to cloudwards.net, 76 percent of kids younger than 18 in the U.S. play video games. Online gaming will continue to increase. Unfortunately, this means more underage users will have access to these games and as a result, there is a higher risk that these young users will unintentionally share their personal data or make accidental purchases. When they do share their personal data, they are also at risk for child sexual abuse and/or exploitation.

Those who have and work with children must take steps to help children stay safe online and prevent cyber exploitation.

There are several signs that could indicate child cyber exploitation:

• Parents or caregivers find child pornography or links to sexual websites on a child's computer.
• The child devotes long periods of time online - especially at night; makes calls to people parents or caregivers don't know; or gets phone calls, gifts, or money from unfamiliar people.
• When a parent or caregiver comes into the room, the child turns off the computer monitor or quickly changes the screen.
• The child is using multiple online accounts or someone else's online account.
• The child withdraws from the family; displays secretive behavior; has sexual knowledge beyond is or her years.
• The child reports participating in or being shown child pornography; reports phishing, spam, emails, and/or asking for personal information
• The child receives email offering pharmaceuticals or sex.
• The child's computer or other mobile device is infected with malware.
• The child reports threatening emails; bullying texts, posts, emails, and chats.
• The child inexplicably stops using the computer; refuses to go online; appears nervous or scared when receiving an instant message, text message, or email.
• The child is angry, upset, or depressed after using the computer.
• Parents or caregivers find a cell phone they do not recognize, or they have charges on credits cards they did not make.