YouTube has announced plans to stop ads on videos made primarily for children. This may sound like the Google-owned online video giant has a good heart, but it is actually a legal issue.
YouTube is free for its users. To make money, they sell ads that appear before a viewer can see a video. There are two types of ads. One type is content-related. As an example, A sports video might be accompanied by an ad for related sports gear.
The other type of ad that YouTube sells is based on its viewers search data. The site collects information like search topics, age, and other relevant information and specifically targets its customers based on their supposed demographics. These ads are most successful.
Here is the problem: targeted ads rely on information that YouTube collects from its watchers. It is not legal to collect that information from minors under the age of thirteen. Doing so without permission violates the Children's Online Privacy Act.
YouTube could be in hot water for this, so they have decided to make some drastic changes.
YouTube has decided to pull ads from videos aimed at kids. The media giant hopes that this move will protect it from getting into trouble with the Federal Trade Commission. The two have recently reached a settlement related to this issue, although it is not immediately clear whether YouTube's announcement to pull ads is a result of this settlement.
Ads are the main source of income for YouTube, and this move will certainly affect Google's bottom line. However, that loss would likely be much less than losing a suit by the FTC.
This is not the first time YouTube has had problems with children viewing its content. Recently, sinister or inappropriate messages were popping up mid-video when parents did not know.
YouTube does make clear that its content is not intended for children. It urges parents to only allow children to view its kid-friendly companion app. Regardless, kids continue to watch through the main site.