Investor Alert

Oct. 29, 2020, 2:45 p.m. EDT

YouTube kid influencers are marketing junk food from McDonald’s, Coke and others to children

By Syd Stone

Kid influencers are marketing junk food and sugary drinks to billions of viewers through product placement, a new study published in the journal Pediatrics found.

Researchers analyzed 418 YouTube videos from the five most-watched kid influencers on the platform in 2019 and found that of the 179 videos that featured food or drinks, about 90% promoted unhealthy branded items like fast food. 

Those videos were collectively viewed by over 1 billion people and generated 2.6 million likes. 

“It really was unhealthy brands by a landslide, and that was the most shocking part,” said Marie Bragg, an author of the study and assistant professor of public health nutrition at New York University’s School of Global Public Health and Langone Medical Center.

Kid influencers’ parents post videos of their children doing things like playing with toys and unwrapping presents — oftentimes to huge audiences.

According to the study, the highest-paid YouTube influencer of 2019 was then 8-year-old Ryan Kaji of Ryan’s World. He earned $26 million in advertisements, sponsored posts and product placements.

One of Ryan’s videos with 46 million views shows him wearing a hat with a McDonald’s logo pretending to be a cashier and making cheeseburgers.

McDonald’s (NYS:MCD) accounted for the highest number of product placements, according to the study. The researchers also found that Kinder and Coca-Cola (NYS:KO) were frequently featured.

“McDonald’s USA does not partner with kid influencers under the age of 12 for paid content across any social media channels, including YouTube, and we did not pay or partner with any of the influencers identified in this study,” according to a statement from the company.

Ferrero USA, the company that owns Kinder, said it doesn’t pay for or seek free promotion from influencers with audiences of children.

“The Coca-Cola Company is committed to responsible marketing, and we do not market directly to children under 12,” according to a statement from the company.  “Specifically, we do not buy advertising targeted at audiences that are more than 35 percent children under 12. This includes marketing across television, radio, print, the Internet and mobile phones.  We also do not hire child influencers.”

Research suggests that young children are especially susceptible to marketing — and even more so when an influencer promotes a product.

“Children are a special audience,” said Michael Robb, senior director of research at Common Sense Media. “There are specific cognitive limitations that children have that make it difficult for kids younger than seven to really understand the intention of advertisers.”

Robb said he thinks commercial advertising targeted to young children should either be eliminated or strongly restricted, especially on digital platforms like YouTube.

There are strict regulations for television advertising, he said, against a host of a program selling products, but that rule doesn’t apply to YouTube, which is owned by Google (NAS:GOOG) . But in reality, children are forming even closer emotional bonds to the influencers they see on YouTube because of the intimate nature of the platform.

“Because kids have these cognitive limitations that prevent them from really understanding what an ad is and because they form these emotional attachments to favorite personalities, it just makes it kind of like a perfect storm,” Robb said. “It makes it extremely difficult for children to be able to disentangle the intention of an advertiser or an influencer from what’s in their own best interest.”

Product placement in kid influencer videos is effective, Bragg said. “Pester power,” when children beg their parents for specific products or brands, generates $190 billion in sales every year, she said.

Bragg said that parents might have more power to change the advertising content that influencers produce than they might think, although it is tough to compete with companies’ advertising budgets.

“A lot of these influencers are really invested in their fan base, so I would imagine if fans said they would actually love to see a mix of healthier stuff that might help shift the tide,” she said. “It really speaks to the need for parents to get vocal about what they want to see in these videos.”

However, Bragg said, the solution is not to place all the blame on the kid influencers or their families because “it’s hard to turn down millions of dollars.”

Instead, she said parents and advocates can put pressure on the companies to be more responsible with the kinds of sponsorships they promote.

“We as a society and as a government have a responsibility to help parents,” she said. “Obesity and its comorbidities cost a lot of money, so if we’re able to set up policies and put pressure on companies to change their practices, that’s important.”

The researchers are calling on the Federal Trade Commission to enforce stricter regulations on the ways kid influencers can be used to promote unhealthy foods and drinks.

Bragg said the Kids Internet Design and Safety (KIDS) Act — introduced by senators Ed Markey of Massachusetts and Richard Blumenthal of Connecticut in March —attempts to protect kids from influencer marketing, but focuses more on nicotine and tobacco products.

“Expanding bills like the KIDS Act [to include junk food] could strengthen this policy landscape even more,” she said.

In addition to tighter federal regulations, Robb said there’s a good amount of research yet to be done on digital media, influencers and children.

“It’s really important that we do a much better job of doing that research and setting up some roadblocks and rules to protect kids,” he said. “They are in much more of a wild west space when it comes to the kinds of ads that can reach them.”

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