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01 Nov 2013 - Advertising Age: Tips for Coping with COPPA

There's a debate heating up over the recent changes to the children's privacy law in the United States. While some brands and websites directed at kids say the revised law hurts ad revenue through tighter restrictions around advertising, for others the law has created opportunities to innovate in order to continue to profit.

Club Penguin is a great example. One of the top kids' virtual brands for the past eight years, it works hard to continuously tweak its product to work within privacy laws while at the same time generating new forms of revenue. Just this summer, it added Star Wars, Marvel and Pixar themes and found a way to re-engage its user base and add revenue streams through the sale of digital goods in its virtual world.

While there are expenses associated with compliance, the complexity of the law and the thought of overhauling an entire business model are bigger issues. Having worked with the law for a few years now, I can say it's truly not as bad as it seems.

Here are a few tips to get you started:

First things first. Read and understand the full Children's Online Privacy and Protection Act(COPPA). You can't assume your lawyer, developer or anyone else is handling this for you. Focus on what is considered "collecting personally identifiable information from kids." Common things like name, address and phone number are included, but less obvious items like photos, audio files and persistent identifiers also count.

Create a parents area on your website. If you don't want to get parental consent and ad serving is part of your revenue model, you'll need to segment off the ads through an age-gate mechanism, such as requiring users to enter their birth date. This way, only users above the age of consent would have personally identifiable information tracked and receive behaviorally-targeted ads. It makes sense for you to consult with a search-enlightened developer and make sure your age gate still allows your website to be optimized.

Use credit card charges from an existing revenue stream as parental consent. If you have an offering that parents are willing to pay for, credit card charges for that product could easily be turned into a form of consent. For example, we have an upgrade feature on our site that allows kids to send their grandparents personalized messages. When a parent uses her credit card to purchase the messaging feature, she provides consent by agreeing to our terms and conditions at the same time.

Join a safe-harbor program that is endorsed by the FTC. There are currently five organizations that are approved by the Federal Trade Commission to audit websites and give guidance on how to comply with children's online privacy laws: Entertainment Software Rating Board, Aristotle International, Privo, Truste, and Children's Advertising Review Unit. What's even better, they help protect you from FTC lawsuits.

Consider working with a partner who is already compliant. If you are unable to change your site, it might be time to phone a friend. Find a partner who is legally compliant and can distribute content on your behalf.

While the children's online privacy law does create some new challenges for brands, kids are more and more active at younger ages in the online world and that is not about to change. With that, the FTC will be more committed than ever to keeping kids safe. Now is the perfect time to get your house in order so you can take advantage of this incredible time to build brand loyalty with kids and their families.

Sara Hanlon