Children and the Internet - Marketing To Children Online

Jupiter Research reported that 67 percent of teens and 37 percent of children between the ages of five and 12 purchased or researched products on the Internet. American youth aged five and older were expected to spend roughly $1.3 billion online for consumer goods by 2003. According to Forrester Research, children's online spending constitutes a market worth $37 billion. As a result, it was a market that businesses increasingly coveted.

The Internet has accelerated "age compression," and American children have more sophisticated consumer tastes than those of past generations. Trends are communicated almost instantaneously across the Net. Half of American children grow up in dual-income families, and another fourth in single-parent households. Thus, they experience more independence than ever before. This independence often encompasses autonomy when it comes to shopping.

Since advertisers believe brand preferences are set by age 12, merchandisers are anxiously probing this market and devising new methods to tap its potential. Specialized market research firms have emerged that conduct information gathering via online focus groups, surveys, and chat sessions. By 2001, online research was expected to constitute 20 percent of the $4 billion spent each year on U.S. market research overall. Online market researchers often pay children for their participation, either in cash, gift points, or certificates. Additionally, some companies integrate purchasing options into all areas of their Web sites. Others notify registered members by e-mail of special, Internet-only sales promotions. Many advertisers seek visibility on well-known children's sites, such as Disney.

In the past, children's lack of credit cards impeded their online shopping. However, credit-card issuers increased solicitations to young people through the 1990s, mailing out 3.2 billion card offers at the turn of the millennium. Nearly seven out of 10 college students possess their own cards, and issuers are reaching for even younger customers. Some Internet vendors offer Web-only debit cards to teens, good for purchases at an affiliated-Web site.

Online marketing targeted at children has stirred parental concerns, especially about the saturation that can be achieved by a constant bombardment of ads. Parents worry about their inability to supervise children's online purchases, about children's fiscal responsibility, and about marketer's aggressive invasion of children's privacy. In response to such concerns, marketers have focused on generating ways to allay parental fears. Sites such as DoughNET, RocketCash, and iCanBuy offered "digital wallets" funded by a specified cash amount that draws, much like debit cards, on a savings account to prevent children from overspending. Other sites permit parents to stipulate where kids can shop.

Companies argue that the Net provides an opportunity for children to learn about financial responsibility. Even insurance companies have Web sites designed for young people. FleetBoston Financial Corp. claimed that 2,500 schools and 400,000 students accessed its FleetKids site, aimed at kindergarteners through sixth-graders. The site teaches financial skills through games such as the BuyLo/SellHi stock market game and Front Yard Fortunes, in which children build their own businesses.