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Pocketing money: how to help children navigate a commercialised digital world

Fortnite game screen

By Giles Milton

The sound of Christmas 2020 may be less sleigh bells jingling and more doorbells ringing for the arrival of yet another Amazon parcel courtesy of one of Hermes’ little helpers.

Lockdown has ensured that Christmas shopping has largely been an online affair, but while that shift may ensure stockings are filled, it also moves families further into a commercialised digital world.

For children and young people, this increasing commercialisation of online spaces can be particularly overwhelming.

From in-game spending and influencer marketing to pre-roll ads and live-stream donating, children are being commodified by subtle and sometimes manipulative marketing and sales techniques that pervade their favourite content.

While the online industry continues to haul in billions, regulators have been slow to react – meaning parents are having to pick up the burden to protect and educate their children.

So how can a parent help their child navigate the fine line between the content they want – and the products and services they are told they want? And what do they need to know about the ways the most popular online spaces for children and young people encourage spending?

Virtual currencies and rip-off games

Online gaming is guaranteed to be one of the biggest spending trends for Christmas 2020 – as will in-app purchases and virtual currencies.

In-game purchases underpin many of the most popular gaming platforms, including Fortnite, Roblox and EA Sports’ FIFA franchise. In these games – and many others – users can spend money on virtual currencies that can only be used for buying virtual items.

And it is big, big business. Parent Zone’s Rip-Off Games report found that 93% of 10-16-year-olds play online games regularly and 76% of them say games try to get them to spend money all the time. Almost half of these say online games are only fun when they do spend money.

While virtual currencies may have value of sorts, they can understandingly – and perhaps intentionally – become detached from reality. There are regular news stories about children inadvertently running up major bills from in-app purchases without a parent’s knowledge.

The usual response to these horror stories puts much of the responsibility on a parent to manage these risks by checking settings and parental permissions. But in truth, staying on top of a child’s spending in games can be almost impossible for even the most engaged parent – given the proliferation of new games available and their ever-changing spending functions.

There is also a wider question about consumer rights, and whether these purchases are fair.

If a child has money to buy a toy on the high street, they have a clearly-stated consumer right to take the item back for a refund if it is not up to scratch. So what protects a child online once they part with money for virtual items that have been pushed to them in games?

Actually, it turns out the Consumer Rights Act 2015 is worded to cover virtual items in a similar way to high street purchases. And parents might ask: who knew? Little or no information is presented in games around refunds and rights to return – in the way it might be expected at a shop cash register.

Until tighter regulation occurs around in-game spending – and consumer rights – it appears to be a parent’s responsibility to protect a child from disappointment or being ripped off.

There is also the growing issue of loot boxes, where users can gamble on getting high-value items from blind purchases. Loot boxes appear in various forms in many games – sometimes with their own odds of success – and can have addictive qualities due to their lottery-like nature. Loot boxes are not currently classified as gambling, despite a government consultation into the issue.

For families, it is a growing and potentially expensive minefield, and guaranteed to be an issue while stuck indoors this Christmas.

So where to start? It could involve discussions about devices, games, virtual currency and in-game spending functions. Maybe how to use them, what to use them for and the value they offer. It might even require explaining to grandma why gift vouchers or money was spent on little more than a few lines of digital code.

A multitude of challenges for parents – at a time when they face enough already.

Advertising and incentivisation on YouTube

Another reality of a child’s online life is the advertising and marketing they must wade through.

Of course, children have been targeted by advertising and product placement for many decades. But as many younger viewers abandon traditional TV and migrate online, businesses have become far more sophisticated in how they use data to target children and families.

Only recently it was reported that the nursery rhymes channel CocoMelon generates 1 billion monthly views and £10 million a month in ad revenue.

Advertising becomes a greater problem when children enter into platforms designed for adults where targeted advertising proliferates. A recent study found that 1 in 5 ads watched by children on YouTube was not age-appropriate.

Entering online spaces in this way takes children into an advertising bubble where it can be harder to differentiate between the types of content they see – and where simple protective mechanisms, such as a watershed, are irrelevant.

Parents should instead consider alternate platforms. YouTube Kids offers under-13s higher privacy standards, with clearly-marked family-friendly ads. Another option is paying to subscribe to YouTube Premium, which can block ads altogether.

Children’s YouTube content is big business and extends beyond simple advertising. An example is Baby Shark – now the most viewed video on YouTube – which in 2019 generated £65 million revenue from advertising and licensing.

It is spilling into major streaming platforms such as Netflix, who compete for non-exclusive deals with the biggest YouTube content rights holders, knowing their first generation of millennial customers are now parents looking for children’s content.

From simple nursery rhymes, multi-million pound businesses are built.

Influencer marketing and critical thinking

Beyond advertising, children come across vast amounts of digital content that promotes products, services or even junk food – either directly or indirectly.

One of the best-known pre-school influencers is Ryan’s World, a nine-year-old from the US who has generated £20 million from unboxing videos that show him opening and reviewing toys.

On YouTube, unboxing videos should be marked as sponsored content if a creator is being paid to showcase specific products. Investigators have found many content creators do not follow these disclosure rules.

Influencer marketing targets children of all ages. Popular TikTok and Instagram stars – for example Zoella, who has earned £4 million promoting her beauty range – are required to flag any promotional post as an ‘AD’. Yet the platforms recently had to pledge to crack down on the many who are not abiding by this rule.

Live streaming is another area where influencer marketing is growing, such as on gaming platform Twitch, which is owned by – and integrated into – Amazon. Broadcasters with large followings can openly promote Amazon products on their streams, receiving a percentage of any sales profits.

It is an area where regulators such as the Advertising Standards Agency have been left behind. As a result, parents have been left to pick through the pieces and help their children understand and process what they are seeing.

Whether it is a box-fresh shiny new toy or a must-have beauty product from TikTok’s hot new star, identifying the blurred and often unmoderated lines between content and advertising for children of any age remains incredibly difficult.

Developing resilience and media literacy

From skin gambling to the growing trend of in-stream payments, there are new and emerging commercial online risks for children and young people all the time.

Regulators need to do more to stay ahead of the curve. Parent Zone’s recent response to a government call for evidence around loot boxes is a welcome step in addressing one of these issues.

We cannot simply leave it to parents and educators to develop a child’s media literacy to understand these digital spaces, to make ‘better’ decisions. The overload of sophisticated advertising and marketing online is such that young people will always be susceptible.

Children also need more digital ‘green spaces’ to play, where they can consume content away from a hugely commercial environment. It is not an impossible ideal – as proven by CBBC and Bitesize.

Oscar Wilde once described a cynic as someone who “knows the price of everything and the value of nothing”. Perhaps helping children to understand the true value of what they see online is a crucial step.

However, it is also important to remember that while children are undoubtedly commodified, many of the places they visit online still provide great value: socially, educationally and for entertainment. Without having the space to explore these areas, they will not develop the resilience to thrive in them.

The good news is that for all these challenges, parents do not need to be tech experts to help their children with some of the fundamentals.

It may require talking to and supporting a child to develop a better understanding of the spaces they are in. Even so, many of the parental (or personal) rules that apply in the offline world also apply online too – whether it is being alert to scams or simply shopping around for the best deal on Black Friday.

These conversations might feel a little old-fashioned in light of modern technology – like explaining the value of money – but they are more important than they ever were.

For parents, it may be quite reassuring that in many ways, the job stays the same.

Images: dennizn, SeventyFour, both stock.adobe.com


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