Adults and children count themselves among the fans of the 23-year-old show “SpongeBob SquarePants,” which helps explain why a mobile game based on the intellectual property recently was brought to task by the Children’s Advertising Review Unit (CARU), a self-regulatory agency administered by the Council of Better Business Bureaus. The example illustrates how much gray area surrounds in-app advertising, particularly for mixed-age audiences, and could have wider implications as gaming expands.
CARU determined the “SpongeBob: Krusty Cook-Off” app has a “mixed audience” of children and adults, yet the game did not include the required protections (age verification and/or parental approval) to ensure that data would not be collected nor used for children under 13. This put the game’s data collection practices in violation of the Children’s Online Privacy Protection Act (COPPA), and developer Tilting Point Media has taken corrective actions.
“It’s not completely new, but we’re seeing cases like this more and more,” said Amy Mudge, partner and co-leader of the Advertising, Marketing and Digital Media practice at law firm BakerHostetler. “The law is complicated, and it’s not easy to interpret. And it is going to get more interesting and complicated as gaming moves into the metaverse.”
A license to develop
When creating a licensed product featuring a beloved character, developers should consider if that product’s appeal could include adults and, at this point, their children. Tilting Point Media, creator of the mobile game “SpongeBob: Krusty Cook-Off,” found this out the hard way.
“Tilting Point violated COPPA and CARU’s Privacy Guidelines by its failure to provide a neutral and effective age screen to limit users under the age of 13 to content that does not involve the collection, use, or disclosure of personal information, or to obtain verifiable parental consent before the collection, use or disclosure of any personal information from children,” read a release issued by CARU in early September. Further, the self-regulatory agency found many of the ads supporting the game were not identified clearly enough as paid support for young children.
Tilting Point Media “cooperated fully with CARU’s self-regulatory program [and] proactively implemented changes to address each of CARU’s concerns regarding its advertising and privacy practices,” per the release. For marketers and developers, the case points to what could be a growing concern as the audience for gaming increasingly includes families.
Planning an ad-based app that adheres to COPPAs standards involves a decision tree that is a little like “a pinball machine,” Mudge said. Certain questions need to be answered: What kind of app is it? What does the app look like? How does the gameplay function? How interactive is the environment? Each answer can send the thread in a number of different directions.
“You’re going to have to think really hard about these things if the app is going to be interesting for kids,” Mudge said.
And, developers have to gauge how adjusting for kids will affect the experience for adults. Going too far in meeting some of the requirements — such as clearly identifying in-game advertising and curbing data collection — can take away from the overall user experience.
“Some may take the path of least resistance, but the choices you might need to make [to make it available] for kids may not be interesting for adults,” Mudge said.
Regulation vs innovation
Developers are getting better at creating bifurcated experiences that can meet the guidelines concerning younger children, remain enticing for adults and be enjoyable for all. Still, the rules are not as cut-and-dried as developers might want as they try to walk the line between responsible and engaging.
“What is still being developed is the question of how overt do you have to be about identifying an ad?” Mudge said. “It’s easy to say, but it’s not as easy to execute. What do kids understand when they’re advertised to online?”
These concerns are only going to become more complicated — and more profound — as the metaverse develops. While everyone wants to be responsible with their advertising practices, they also want to make the experiences as realistic and immersive as possible.
“We don’t want the advertising guidance to interfere with innovation,” Mudge said.
Some of these vagaries may come into clearer focus next month, when the Federal Trade Commission holds a virtual event, “Protecting Kids from Stealth Advertising in Digital Media.” The event will bring together researchers, child development and legal experts, consumer advocates and industry professionals in an attempt to better understand fundamental questions of capacity to identify advertising content based on age and development, what measures should be taken to prevent children from blurred content, and the need for efficacy and disclosures as a solution.
While a step in the right direction, Mudge notes that this is just the beginning of the conversation and finding answers is likely going to take some time. In the meantime, marketers and developers will need to pay close attention to the potential audience for their programs if they want to stay on the good side of regulators.
“If they don’t know how to do this for adults, they certainly haven’t yet figured it out for kids,” she said. “We have to make sure the guidance we’re creating is following the developments in the advertising world.