• by Wendy Davis  @wendyndavis, October 3, 2023

Metaverse ads aimed at children under 13 could be particularly manipulative, given that young children may not be able to distinguish content from ads in virtual reality worlds, the self-regulatory group BBB National Programs Children's Advertising Review Unit says in new guidance.

“Metaverse worlds, whether branded, sponsored, or user-generated, may feature advertising that is woven into the theme and content of an experience. Seamless and organic integrations are not likely to be easily identifiable as advertising to children,” the organization writes in “Building Guardrails for Child-Directed Advertising & Privacy in the Metaverse,” issued Tuesday.

“The risk of manipulating children into unwittingly viewing ads or making unintended purchases is heightened in such metaverse spaces,” the group adds.

The recommendations come more than one year after the Children's Advertising Review Unit warned it intended to “strictly enforce” its ad guidelines in virtual reality environments. Among other requirements, those guidelines require disclosure of advertisers' relationships with paid influencers.

“Our guidelines are agnostic as to platforms and technology,” Dona Fraser, senior vice president for privacy initiatives at BBB National Programs, tells MediaPost. 

She adds that the document released Tuesday is intended to help companies decide how to address metaverse ads, including product placement.

The organization began developing the guidelines last year, before the online platform Roblox banned ads aimed at children younger than 13.

The new guidance provides that content endorsing a specific product or brand would likely be considered an ad. Also, if content incorporates a product in ways that would promote its purchase, that content is likely an ad, the group writes.

At the same time, the group says not all product placement in the metaverse is an ad. For instance, if there hasn't been any payment, product placement isn't an ad. Also, the use of generic products within a branded metaverse experience isn't advertising, the organization writes.

If companies are uncertain whether something is an ad, they should err on the side of disclosure, the group recommends.

“When in doubt, disclose!,” the guardrails state, adding that disclosures should be in simple language such as, “This is an ad.”

The self-regulatory group also recommends that companies in the metaverse incorporate “privacy by design” principles, and keep up with laws and regulations, such as the federal Children's Online Privacy Protection Act. That statute prohibits online companies from collecting personal data from children under 13 without parental permission.

“Privacy-by-design principles focus on creating algorithms and data flows that default to data minimization, privacy protection, and user control,” the group writes.