This activity seeks to be regulated by the States, with global standards of data privacy and secure communication for this segment.
Digital advertising aimed at children under 18 years of age is an annual market that in Latin America alone is currently worth more than US$250 million a year, and will reach US$380 million by 2025, according to a private estimate.
This activity seeks to be regulated by the States, with even global standards of data privacy and secure communication for this vulnerable segment.
Demian Falestchi, co-founder and CEO of Kids Corp, analyzes in the following interview with iProfesional how children and teenagers in Latin America use information and communication technologies (ICT) and how Web3 opens new opportunities to the digital advertising business for this segment.
Kids Corp has its own offices in Mexico, Brazil, Argentina, Colombia and Uruguay and works with more than 500 brands, including Disney, Hasbro, Kellogg's, WarnerMedia, Nintendo, Netflix, Mattel, Pokémon, Lego, to understand, innovate and interact with more than 150 million children, teenagers and parents every month.
-How do children use smartphones and tablets? Just to watch programs and play games?
Smartphones are an important part of everyone's life, including children, with 85% of U18s (under 18) having access to one in Latin America, and reaching 93% among adolescents (13-18).
Access to entertainment through a mobile device is increasing, and children choose to watch videos (78%, mainly on YouTube and YouTube Kids) and play video games (64%) among their favorite activities, well above watching TV (broadcast or cable), chosen by 42% of the segment.
The case of social networks requires a very particular analysis for two reasons. Firstly, access to most of them (TikTok and Instagram, to mention the segment's favorites) requires being over 13 years old to create an account, but in reality millions of children access through users with fake IDs.
On the other hand, the most viewed content on social networks are also videos, mentioned above as one of the main online activities performed by children and adolescents.
-What are the challenges of giving children access to the vast amount of information that exists online?
-Before talking about the challenges, I think it is essential to understand the opportunities that children and teenagers have access to today. The Internet is the largest library in the history of mankind.
There are two main ways of accessing its contents, either by paying for them (through purchases in apps, games, websites or subscriptions, for example), or by advertising brands paying for them.
In this last point, is where children have a huge opportunity to learn, be informed, entertained and grow, thanks to the fact that there are companies that, through digital advertising, contribute to universal and free access to content.
However, behind this enormous opportunity, there is also a great responsibility of the entire industry to ensure that this access is through safe experiences for them.
The Internet was not designed and created for children, therefore, there are different risks when connecting, such as exposure to inappropriate content, "grooming" or spying on children when they are "online". We must take care of all this so that it does not happen in the future.
Governments, through regulations and laws that protect data privacy; creators, by developing quality content suitable for each segment; and brands, by investing in technology that guarantees safe and entertaining experiences for children. We all have a historic challenge to accompany children and adolescents to take advantage of this unique moment.
-How do you turn the screen from a mere distraction device into a reference tool for children and their parents?
-Today, screens are undoubtedly a reference and development tool for children, and parents have a huge opportunity to help their children make this happen.
During the last year, through the Askids Insights Portal (Kids Corp's data and insights solution for the "kids, teens and families" segment in Latin America), more than 25,000 children and teenagers were asked who they trust, and 92% answered "my parents" first. Far behind, with 62%, are their teachers.
This trust has to be the driving force for all parents to find a point of contact to be close to their children in their connections, to be informed and to guide them in taking advantage of all the good things that screens offer, both from a playful, academic and formative point of view.
-Today, the creation of child-friendly versions of existing applications predominates. When will there be a shift to building from the ground up for children, rather than an outside-in, adult-first perspective?
-This is something that is already happening, and the main exponent of this is the metaverse, spaces that are more natural for children than for adults. Roblox (more than 13 million "kids" and "teens" use it in Latin America), Fortnite and Minecraft, to mention the most popular (in adoption, number of users and engagement) are virtual experiences designed exclusively for children and teenagers.
Such is their success that they are a reference for other metaverses designed for general audiences, such as Horizon Worlds, the Meta virtual platform recently launched for the United States and Canada, or Decentraland, the virtual space created in Argentina that began in February 2020, and which has already become a place to shop, have fun, attend concerts or events, such as the Metaverse Fashion Week (2022), with fashion shows and the presence of major international fashion brands.
On the applications side for the segment, Zigazoo was created in 2020 and is a social network for children with a notorious growth, allowing them to express their unlimited creativity in a safe context.
Another example is Ok Play, a community where children can create, play and share content in a space 100% for the segment. Also platforms such as Cryptoys (recently invested by Mattel), which merge collectibles, NFTs (non-fungible tokens) and gaming.
Going a little further back in time, the still "online", but not so current, Mundo Gaturro, which started in 2009 as a game for children from 4 to 12 years old, and in 2010 was officially launched worldwide.
Club Penguin is another prescient example, in fact one of the first metaverses for the segment. Designed in 2005 (and later acquired and closed by Disney) specifically for children aged 6 to 14, and with a strong focus on child safety. Already at that time they introduced a number of features in the game to protect them through technology and moderators in the chats.
Within the more generalist applications such as YouTube and TikTok, created for adult audiences, efforts are being made to adapt to minors, while respecting data privacy regulations.
YouTube, since 2020 and after being penalized for 170 million dollars in 2019, does not collect information from channels classified as "make for kids". TikTok deleted more than 20 million accounts in the first quarter of 2022 on suspicion that they belonged to children under the age of 13, in violation of the platform's policies. As part of this, both TikTok and Instagram, have removed all ad targeting filters on accounts under the age of 18.
-What new uses will get kids excited? For example, a money app for kids first, focused on allowances and gift cards?
-The relationship of kids and money is very interesting, and among teens even more so, with 51% of them having access to money of their own to make purchases and save.
Between 13 and 18 years old, 38% of them spend money on clothes and shoes, 36% on food and beverages, and 33% on eating at fast food restaurants, to mention the 3 most relevant ones.
In addition to the fact that the vast majority (67%) make cash payments, they also use other means of payment such as debit cards (16%), credit cards (8%), virtual wallets (7%) and PayPal (4%).
Linking the topic of money with its new uses, it is a segment that is directly impacted by digital currencies, since only 13% never heard of them in Latin America, 4% use them and/or use them at home and 43% understand what they are, despite not using them.
Children are "early adopters" of these new technologies and there is no doubt that adoption will be increasing in the segment. Virtual wallets are finding a very attractive and dynamic segment, and the efforts of some of the large companies have already begun to be seen, such as the appearance of new "fintechs" specialized in children.
For example, in Brazil we are currently working with Mercado Pago on the communication of their accounts for teenagers between 13 and 17 years of age.
Mozper is another great example of how financial education is present in the segment. This company, created in Mexico in 2020 and with operations in Brazil since 2021, supports parents in the financial education of their children in a safe way, through financial education, and logically with products for children and adolescents, such as credit cards and digital accounts.
-What online experiences make sense for children?
-There is a prejudice and preconception that devices are bad for children because they "dull" them, keep them away from a social life and keep them locked in a screen that is bad for them.
Although there are cases of excesses, the reality is that screens used correctly and without excesses, have a great sense of playfulness, academics and socialization, through which they can be in contact with their friends, play, interact and perform activities together, that if it were not for the connection of the screens, they would not be able to do so.
All experiences can make sense, as long as they are appropriate to their ages and context. For this, it is essential that the content they access and interact with is relevant to them.
At Kids Corp we created the "kidtech" industry in Latin America with that purpose, to make the Internet a safer and more entertaining place for the new generations. And we do this through technology and data tools that empower more than 500 content creators, advertisers and decision-makers.
-In what new ways could an Internet device be a platform for imaginative play?
-Those ways already exist and are being developed on the Web3, which tends to regain decentralization and be a secure network. Roblox, for example, is an experiential platform where children create their own games and stories, and develop an online life through their avatars, clothes and accessories, virtual goods, and their own economy.
Today children have access to countless sources of inspiration, education and learning to create content, program and interact with each other on the Web3. Whether it's YouTube, Twitch, communities on Discord, they have everything at their fingertips.
Another example designed exclusively for the segment is Crack The Code, a Peruvian "startup" created in 2018 that offers hundreds of courses and trainings that prepare new generations to develop in this new digital era. Its mission is to create opportunities for children and young people in Latin America through coding, programming and technology.
-Virtual reality has made a leap in the last few years. When will it be on the children's list for the end-of-year holidays?
-It is common in the development of technologies that often take time to normalize, expand and be friendly. Virtual reality is in its infancy, but it is becoming more and more widely used. In the beginning, VR (virtual reality) devices such as Oculus and headsets were very expensive.
However, in the last two years they have become more competitive in price, and their use has been democratized. This has generated that more and more virtual reality content is being produced and the industry is slowly starting to grow. We estimate that in approximately five years there will be a great adoption, driven by the new generations.
-What possibilities does the metaverse offer to children? How will children create metasocieties?
-In recent years, children have redefined the sense of community, generating a boom of virtual spaces where conversations take place, ideas flow and fun is shared.
Through the creation of virtual universes with components of everyday life, such as Roblox, Minecraft, Animal Crossing or Fortnite platforms, it is no longer just about playing, but also about customizing characters and interacting with friends, generating a new identity on the Web3.
Digital natives today are the colonizers of the metaverse, which is reshaping how people meet, play, shop, work and learn, building their digital identities.
This context generates a huge challenge for brands, just as 10 years ago they had to work to find their role within the social media universe, now they are challenged to draw strategic plans to navigate in the galaxy of metaverses, the new social media.
-What is the place of podcasts in kidtech?
-The podcast format occupies a very important place in our mission to raise awareness and work for the development of our industry, it is part of our contribution to the industry, as are the webinars and summits, and soon Kids Corp University, which we organize from Kids Corp throughout the region.
Kids Talks, our podcast, is a space for conversation and reflection with leaders of the digital ecosystem for children and teenagers in Latin America, and aims to address various issues, trends, opportunities and challenges that make the industry of products and services aimed at the segment, as well as to meet the people and ideas behind the executives and professionals of the most important companies in Latin America.
While this content is a source of inspiration for the entire industry, it is also a source of inspiration for parents of children and teenagers to learn more about safe content, how companies work and their commitment to develop relevant content and safe experiences for their children.
-What are the challenges of digital advertising focused on children and teenagers?
-Children and teenagers are the most creative beings on earth and consume more and more content on more and more screens. This presents advertisers with the need to innovate and the challenge of knowing and understanding each of the points of contact with the segment, taking into account that there are only six seconds to capture their attention.
On the other hand, the Internet was not designed for minors, exposing them to risks such as inappropriate content, disclosure of information, bullying, grooming, sexting, among others.
This context requires an understanding of data privacy protection laws. By the time a child turns 13, the adtech industry will have already collected 72 million of his or her data, which is prohibited.
It also requires understanding local and global advertising regulations to ensure an entertaining, safe and appropriate experience for each audience.
Currently, when using adtech solutions not designed for children under 18, such as Google's, 7 out of every 10 dollars spent is wasted by not reaching the target.
Working with kidtech solutions specially designed for the segment, allows to reverse this situation and ensure that at least 8 out of 10 dollars reach the target, guaranteeing safe and appropriate contexts for their brands.
Finally, consumption and purchasing power, the great influence on family decisions, and the beginning of building loyalty with brands. It raises a need to understand the role of each of the actors in the family and its environment, for decision making in the business.
Today we consolidate our position as the number 1 kidtech company in Latin America, and from 2023 we will start our operations in the United States to bring our solutions to the world.
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