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. …