YouTube, which has been under pressure for facilitating inappropriate content viewed by children, is in discussions with federal regulators to end its advertising targeting on videos that appeal to kids, Bloomberg reported.
Several years ago, Google-owned YouTube launched a new arena that would ostensibly house all of its online video aimed at viewers younger than 13: YouTube Kids. Despite the existence of YouTube Kids, though, certain kinds of videos with appeal to younger viewers (animated clips and the like) rack up millions of views in the broader YouTube arena.
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After age-inappropriate ads and comments began popping up on the site’s young-skewing videos, activists and consumer groups began pressuring YouTube to take action. The Federal Trade Commission began investigating whether YouTube had violated the Children’s Online Privacy Act. It has reached a settlement with the company but not divulged the terms of the settlement, though it wasn’t apparent whether the discussions about ending targeting were part of that settlement.
Limiting the ability of a gargantuan ad machine like YouTube to target ads based on behavior — a huge advantage digital platforms enjoy over television and other traditional media — will likely hurt revenue. Even so, Bloomberg cited multiple unidentified people with knowledge of the talks in reporting that the halting of targeting has been identified as the least financially burdensome outcome for the tech giant.
In reporting second-quarter financial results last month, Google parent Alphabet delivered Wall Street a huge upside surprise in terms of total revenue, which came in just shy of $39 billlion. Executives cited YouTube as a key ad driver, saying it was the second-biggest contributor during the quarter despite more aggressive take-downs of inappropriate content.
YouTube declined to comment on the Bloomberg story and an FTC rep did not immediately respond to an email from Deadline.