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AdRelevance Reports Shift in Online Advertising

While it is clear that children have a great deal of influence regarding online purchases, the fact remains that kids have no money.

According to new research by the AdRelevance division of Media Metrix, online advertisers wanting to reach this key demographic are shifting their focus away from children and on to families.

The research showed a strong 96 percent increase in online advertising by businesses targeting families between May 2000 and August 2000, while advertising by companies targeting Children declined 56 percent in the same period.

One major reason cited for the decrease in child-targeted advertising is legislation aimed at protecting children. The Children's Privacy Act (COPPA), which became enforceable last April, is deigned to place parents in control over what information is collected from their children online.

"The shift that we're seeing in child and family advertising online might be tied in part to the recent FTC privacy guidelines. It's safe to say that companies have learned to tread lightly as they seek to target younger generations," says Charlie Buchwalter, vice president of media research for the AdRelevance division of Media Metrix. "Clearly, the latest AdRelevance data suggest a reallocation of online ad dollars from the child to the parent."

The law requires Sites targeted at those under 13 years of age, to post clear and comprehensive Privacy Policies on the website describing their information practices for children's personal information. In addition, the sites must provide notice to parents, and with limited exceptions, obtain verifiable parental consent before collecting personal information from children.

The study also revealed a trend towards family-targeted advertising being placed on portal sites as opposed to the near even mix between portal and children's sites for those marketing towards children.

According to the authors of the report, this may also be a result of attempts to protect youth. Unlike sites targeted at adults, kids' sites help to protect children by ensuring advertising content is easily differentiated from site content. In order to do accomplish this, ads are typically flagged with text or graphics to make it clear that banners are a paid advertisement.

The report states: "The gray areas between what is acceptable marketing to children and what is not may be creating some reluctance among advertisers seeking to target younger audiences."

With children and teens spending nearly $80 million annually and having influence on an additional $160 billion spent by their parents, we can expect the competition to attract this segment - to heat up in the near future.