I’ve talked a lot in this blog about how companies are using social media to capture new customers and engage existing customers.  Today, Advertising Age wrote a fascinating article on the success of Canadian toy manufacturer, Ganz, who has used social media and the Internet to spark massive sales of its Webkinz stuffed animals.  I’ve got mixed feelings about Webkinz marketing model and success. On the one hand, I admire the Ganz creativity. On the other hand, I question whether Webkinz takes marketing to children one step too far.  Before I explain this paradox in more detail, here’s some background…

Webkinz, which launched last year, are proving exceptionally popular among American children aged 6-11.  The success of Webkinz is so impressive that Advertising Age refers to them as “Beanie Babies on steroids”.  By November 2005, Ganz had sold one million Webkinz, without doing any formal advertising.  Ganz reports that this number was pushed “significantly higher” during the holiday season.  Instead of advertising, Ganz made Webkinz successful  by engaging a strong network of sales reps and retailers as well as innovative PR and social media strategies.  Bloggers and YouTubers started talking about Webkinz en-masse, which attracted the attention of the media and resulted in publicity on “Good Morning America,” “Regis & Kelly” and “Rachael Ray.” Social media combined with the power of traditional press accelerated the sales of Webkinz.

Webkinz word of mouth success via social media is in great part to do with its web-savvy product strategy.  Each Webkinz stuffed animal comes with a printed tag, with a secret code and the address of what Advertising Age refers to a “safe” social-media enabled website for kids.  Once registered, kids can dress and feed their avatar Webkinz by earning “KinzCash” by playing games and winning quizzes.  Kids can also engage their avatars with other Webkinz avatars by inviting them to be friends and sending messages from a pre-selected list of options (Advertising Age uses the example “You are” and “very nice”.).  So, in effect, the Webkinz site becomes a mini MySpace for very young kids, without the threat of sexual predators. Imagine the success of Cabbage Patch Kids in the 1980s, and add to the “adoption process” the power of the internet and talking cartoons, and it’s not hard to see why kids can’t get enough of Webkinz.

The concerning part of Webkinz and similar products is the way that they engage with and solicit information from children.  When a child goes to the Webkinz site s/he is greeted by vivid cartoon images and written instructions.  When the child clicks on the text “My First Adoption,” a cartoon named “Ms. Birdy” appears welcoming the child to the “Adoption Center.” Ms. Birdy asks the child to read and complete the end user license agreement (EULA).  Webkinz’s EULA is a typical legal masterpiece.  It contains text that is well beyond the reading comprehension level of a 6-11 years old, and yet, without suggesting that the child ask for parental assistance, “Ms. Birdy” asks the child to read and agree to the terms contained within the EULA.  Included in the terms is a paragraph, which says that any feedback provided to Danz on the site will become the intellectual property of Danz. I understand why Danz has this clause in the EULA, but I don’t feel that it is appropriate to expect that a child can read or understand a legal document intended for adults. I take issue with any website that expects a minor-aged child to click through and agree to a legal agreement without parental involvement – especially one that claims ownership of any intellectual property that the child submits in the form of feedback for the site.

After the child clicks “I agree” to the EULA (which they couldn’t possibly understand), Ms. Birdy speaks, telling the child that if s/he is under 9 years old, her/his parents should help her/him with registration.  The site then asks the child to submit personal information into the website: first name, date of birth, country of residence, and state. Although, it is not considered personally identifiable, this information does not appear to be transmitted securely, which is concerning to anyone illegally watching a family’s internet activity or a child predator stalking kids at the local library.

The child is then asked to create a username and password and submit the secret code on the tag of their Webkinz animal.  This code allows the child to play in “Webkinz World” for one year from the “date of adoption,” with the option to renew after that year for a fee.  All of this, is, of course, explained in the EULA, which is too complex for a child to understand.

While I am excited to see social media being used as an effective marketing tool, and I am pleased that DANZ complies with the Children’s Online Privacy Act (COPA), the Webkinz registration issues I mentioned highlight a larger issue of concern.  Companies are marketing to children, soliciting information from them on-line, and asking them to read legal agreements, which are beyond their level of comprehension.  It is difficult for parents to watch out for their kids in situations like this.  If a kid thinks it is okay to input their information onto, say, the Webkinz’s site without parental permission, what is to say that same child won’t think it is just as okay to give that information to a stranger via another website?  Nothing, unless their parents are involved.

One of the things that should be of growing concern to social media enthusiasts and child advocates alike is that there is currently no safe way to identify whether someone is a minor on-line.  Having a “second life” full of social media and networking on-line is becoming more and more common. In so many ways, anonymity is an accepted part of the Internet. This may hurt kids.  By this I mean, in real life, a child can’t go into a 7/11 to purchase porn, cigarettes, or booze, without showing appropriate age identification.  However, on-line, there is no such thing as an age identification. The Internet is largely anonymous.  As a result, there is no way to protect kids from seeing or interacting with inappropriate material, as there is in the non-anonymous “first life” – unless that material costs money and requires a credit card to purchase. A scary thought.