As a major carrier of information, the Internet has become an important part of many lives. Growth of the Internet is driven by cheaper and faster computers, lower access fees, increasingly easy-to-use interfaces, and, perhaps most importantly, significant growth in the amount of information and entertainment provided (Barker & Gronnes, 1996).
The emergence of the Internet as a distribution channel has intrigued marketers who see potential marketing benefits. An overwhelming majority (87%) of the members of the Direct Marketing Association (DMA) have Web sites, with 83% of those marketers using their sites for marketing or sales applications (Coyne, 1998). One-fourth of those who use their Web sites for real-time electronic sales transactions are doing so profitably (Coyne, 1998). As companies market their wares on the Internet, a number of issues have emerged, including that of consumer privacy. In a 1997 survey of Internet users, privacy overshadowed censorship as the most important issue facing the Internet (GVU, 1997). In 1998, it remained a major concern among Internet users (GVU, 1999; Pew Research Center, 1999).
Internet marketing could raise privacy concerns in each of the following areas: access, solicitation, collection, monitoring, analysis, transfer, and storage of consumer information (Wang, Lee, & Wang, 1998). Indeed, the collection of personal data from children on the Web has attracted attention from parents, child advocacy groups, and the federal government (CARU, 1997; FTC, 1998).
This study of 166 Web sites was designed to examine the online collection of personal information from children online, and to assess the degree to which Web sites have complied with industry self-regulatory guidelines regarding children's online privacy.
Children and Marketing
Children represent three distinct consumer markets: primary, influence, and future (McNeal, 1998). In 1997, children under the age of 12 directly spent about $24.4 billion. As much as $300 billion of the nearly $500 billion in 1997 household spending was determined by children (McNeal, 1998). For decades, marketers reached children through traditional, non-interactive media such as television. With the growth of the Internet, marketers have a new--interactive--means of reaching children. And marketers appear ready to utilize this to their advantage. Most web sites for children were reported to target those between the ages of 8 and 11 (Raskin, 1998).
In 1998, over 6 million American children no older than 12 were reported to be online, up from 3.5 million in 1997 (Pitosky, 1998). These figures make the Internet an increasingly attractive medium for marketers interested in targeting children. Even beyond the numbers, the Internet is considered an excellent medium for marketing, especially for direct response and database marketing (Rowson, 1998). It enables marketers to identify and target audiences as small as an individual. Marketers are able to set up a personal file for each consumer which can be used for future promotional efforts. Customized Web sites have been suggested to ensure that customers have a new experience each time they revisit the site (Rowson, 1998).
Concerns about marketers targeting children focus on children's vulnerability to manipulation. By five years of age, children are able to distinguish programs from advertisements (Young, 1990). They may not, however, understand the intent of advertisements (Gunter & Furnham, 1998). For children to objectively respond to ads, they need to: distinguish ads from programming; discern their basic purposes or intent; and make sense out of their basic messages in terms of what is being said and asked (McNeal, 1992). Studies have documented that young children have difficulty articulating the purpose of advertising on television (e.g., Bever, et al, 1975; Paget & Kritt, 1984). Henriksen (1996) for example, found that young children's naive theories of buying and selling ignored the use of money. She concluded that without knowledge that selling implies an exchange of money for goods and an opportunity for profit, young viewers were unlikely to recognize advertisers' motives.
Since the Internet represents the integration of advertising and editorial content (e.g., there is no temporal demarcation as found on television), children are even more likely to have difficulty telling the difference between advertising and editorial content on the Web. Moreover, marketing strategies on the Web extend beyond ads. Clubs, contests, sweepstakes, and premiums effectively attract children's attention (McNeal, 1992). Some Web sites are devoted exclusively to promotion practices such as those just noted (CME, 1996a). Children may be especially vulnerable to the Web's seamless mix of editorial, advertising, and promotional material.
Concerns over information privacy can be approached from three perspectives with regard to agents: when public sector (government) organizations seek personal information from citizens, when corporations in the private sector request personal information from consumers, and when unaligned individuals seek personal information from other individuals. Although the government collects a large amount of personal information from people, private companies collectively gather more personal information, both in variety and amount (Cate, 1997). Laws have been enacted which regulate government and private corporations from collecting personal information from citizens (e.g., the Privacy Act of 1974; Computer Matching and Privacy Protection Act of 1988; the Electronic Communication Privacy Act of 1986). However, these laws regulate the potential use and disclosure of the personal information already gathered. Prior disclosure of information collection practices, as well as obtaining prior consent from citizens, fall outside the scope of these laws. Moreover, these laws do not address privacy concerns associated with the information superhighway.
In 1995, the Clinton administration's Information Infrastructure Task Force issued a report which featured a series of principles addressing the privacy rights of citizens (IITF, 1995). In addition to noting that information collectors should maintain the confidentiality of the information they collect, the task force called on information users to notify those from whom information was collected:
Information users who collect personal information directly from the Individual should provide adequate, relevant information about: why they are collecting the information; what the information is expected to be used for; what steps will be taken to protect its confidentiality, integrity, and quality; the consequences of providing or withholding information; and any rights of redress. (IITF, 1995, p. 5)
The IITF report also included a prior disclosure requirement-that individuals be "given sufficient information to make an informed decision about his or her privacy" (IITF, 1995, p.5). Moreover, such notices were to be "creative about informing in ways that will help all individuals, regardless of age, literacy, and education to achieve this goal" (IITF, 1995, p.6).
Even with the IITF report, the U.S. government has adopted a non-regulatory, market-oriented approach to electronic commerce. In A Framework for Global Electronic Commerce (Clinton & Gore, 1997), the private sector is called upon to lead electronic commerce. The report argues that the government should avoid undue restrictions on electronic commerce. If involved, the government should support and enforce a "predictable, minimalist, consistent and simple legal environment for commerce" (Clinton & Gore, 1997, p. 3).
In light of privacy concerns with children, the online collection of personal information from children by marketers has attracted considerable attention. Privacy was not as salient an issue with traditional …