Parents fret over kiddie e-commerce

Such fears are growing even as kids become an increasingly important part of the online marketplace, according to research presented Monday at Jupiter Communications' Digital Kids '99 conference in San Francisco. The change affects how kid-oriented companies run their businesses in the emerging Internet marketplace.

Jupiter found that 45 percent of parents surveyed said they were concerned about online advertising targeted at kids, compared with only 18 percent a year ago. At the same time, teens and kids are spending more time and money online, and Jupiter projects they will directly account for $1.3 billion of e-commerce dollars in 2002.

"This concern arises from the advertising-
marketing-commerce marketplace online, where parents understand that their kids are going to be directly involved in a purchasing relationship," said Jupiter analyst Anya Sacharow.

"To alleviate concerns, sites can buffer kids from commerce ... and they need to teach kids the value of money, what it means to buy, rather than focusing on instant gratification."

Sacharow chalked the rising concerns up to an increased awareness of the Internet through media reports. But although parents are more aware of the possible dangers their kids could face online, such as falling prey to data mining or stumbling across "adult" content, they don't feel they understand the Net well enough to monitor what their kids are doing.

"It needs to be an educational process [for parents]," she said. "It's also a matter of the industry stepping forward and taking the lead by creating an experience that's positive for kids."

The kids wanna shop
The companies presenting at the conference ranged the gamut from extremely cautious about kid-oriented commerce to aggressively pursuing kids' online dollars.

Many kid companies doing business online, such as Children's Television Workshop and Disney Online, have strict limits or bans on advertising or selling to kids. CTW, for example, has "no plans" to market to kids on its site, said executive vice president Gary Knell.

Disney Online places ads on its site, but says it has avoided a negative response by putting marketing in the right context. As for gathering data, "We don't ask any information from kids, period. We do not market directly to kids under 13," said Ken Golstein, senior vice president with Disney Online.

Golstein said the site is able to satisfy its advertisers with anonymous information about its visitors, gathered through tracking their usage of the site. E-commerce opportunities are generally aimed at adults, not kids.

Unsurprisingly, Toys R Us is taking a more aggressive approach to e-commerce with its newly established Web presence.

"I have to say, I'm a little surprised at the responses to this from my colleagues," said Bob Moog, head of Toys R Us' online branch. "We think the Internet is a great place for kids to go both for content and commerce. If a 10-12 year old kid wants go to our site to buy a present for his friend's birthday, I don't see any problem with that."

Image problem
Analyst Sacharow says part of the problem is an image of the Internet as a wild, unregulated place where rogue data miners and pornographers are free to target kids. There are no Federal regulators, as in the television industry, to ensure that advertisements are separated from children's programming.

But kids' sites generally are keenly aware of the trust they need to maintain, and have already taken measures to separate marketing messages from their online novelties, Jupiter says. Self-policing initiatives such as TRUSTe, taken up to circumvent restrictive Federal legislation, allow many sites to display their privacy policies up-front.

Separating content from commerce
And "content" sites that also operate e-commerce businesses are generally careful to separate the two. For example, LEGO Systems directly sells many of its popular MindStorm toy sets online, but maintains the shopping site distinct from the information and demonstrations at Lego.com. In fact, the toys listed on Lego.com don't even list prices.

LEGO Systems president Peter Eio said that parents' fears will subside as long as Web companies are careful about how they approach kids online.

"Parents are a little out of their depth here," Eio said. "This is the first time in history that a new generation has overtaken their parents in the use of a new technology."