FTC Receives Complaint Against a Highly Subscribed YouTube Toy Channel and this could Affect Advertising on the Platform!

There’s no doubt that over the last few years, YouTube has become an advertising hub. However, an influencer with kid-oriented content needs to ensure that their audience know the difference between advertisement and entertainment.

Recently, group Truth in Advertising filed a complaint with the Federal Trade Commission (FTC) in regards to children's YouTube channel Ryan ToysReview, for not disclosing paid partnerships in a way understandable by preschool children.

The executive director at Truth in Advertising Bonnie Patten told media outlets that unlike adults, preschoolers aren’t able to determine if they are being pitched a commercial. Patten is worried about the fact that a disclaimer found in the description section of a video or a quick voice-over isn’t sufficient for kids to realize that they are about to watch a paid advertisement.

The complaint also raises an issue that has been talked about earlier i.e. Creators with young target audience plugging their own merchandise and products for example Jake Paul. In its defense however, YouTube used to point towards its terms of service, in which it is mentioned that the site is not meant to be used by people under the age of 13. For children, YouTube’s official Kids app must be the go-to.

However, the children’s rights advocacy groups argued that YouTube was ignoring the fact that many of its highly subscribed channels catered to young children.

After being fined a whopping $170 million for allegedly violating the Children’s Online Privacy Protection Act, YouTube is set to make some changes. The company must stop collecting data on kid-oriented videos. This will probably result in creators pursuing brand deals from companies. Additionally, creators with kid-oriented content will have to label their videos as such, due to which they will lose some perks such as the ability to send notifications. A web version of the platform has also been rolled out which co-exists with the YouTube Kids app.


Although the above mentioned changes don’t completely address Patten’s concerns, she is optimistic that the changes are a sign that the government and YouTube are ready to address concerns regarding advertising on the platform. According to her, the research and law has yet to catch up with Influencer marketing. Now, with a body of research guiding the FTC in regards to the new form of marketing, we will probably see a new set of guidelines from the FTC.

It should be clarified that it doesn’t mean that Creators will be stopped from working with advertisers or promoting their own products. It’s about realizing the difference between an audience that can understand they are being pitched a commercial and those who can’t.

Patten explained that the FTC is going to make sure that a reasonable consumer following (for example) Kylie Jenner realizes when she is plugging her own makeup line and if the consumer is aware of it, then Jenner doesn’t need to put a disclosure. The disclosure is necessary in case of the consumer not being aware that they are being pitched an ad.

When it comes to kids and especially preschoolers, Creators are not allowed to pitch ads to them in an organic fashion because such an audience can’t understand the difference between ads and organic content.



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