Mattel violated self-regulatory principles by failing to disclose that some videos that ran in a "Barbie" app were actually ads, the watchdog Children's Advertising Review Unit said Tuesday.
"In a rapidly developing mobile environment, where advertising may appear in a variety of formats, it is imperative to clearly label when an ad is in fact an ad," the watchdog said in a written opinion.
The decision centered on in-app advertising in the "Barbie Sparkle Blast" game app, which enables players to use virtual currency to purchase outfits for a Barbie avatar. Players can buy the virtual currency with real money, or by completing an in-app game.
Mattel ran short video ads during the game, which were not labeled as advertising, according to CARU. Those ads can't be stopped, and users can't exit the screen, CARU wrote.
The app also allowed people to collect virtual currency by clicking on an icon that invited people to watch an "advert." When users clicked through, they received a pop-up screen that told them they could receive a reward for watching a video -- without a disclosure that the video was an ad.
"CARU was concerned that children would not understand the advertising intent ... without clear disclosure," the watchdog wrote.
Mattel has modified its app to include disclosures about ads, CARU said. The toy manufacturer also said it believed that third-party ad-serving companies would "include an advertising designation in ads served to children," according to CARU.