Opinion - Generation Media

AI: super powered friend or regulatory nightmare waiting to happen?

This month, Tyler looks at how, in 2025 and beyond, AI’s ability to process vast amounts of data in real-time is proving invaluable for brands navigating the competitive children’s market.

Artificial Intelligence (AI) is transforming the way brands engage with young audiences, offering unprecedented insights, efficiency and precision in marketing campaigns. However, with these advancements come significant challenges, particularly concerning data privacy regulations, ethical considerations and the balance between automation and human creativity.

The primary advantage of AI in marketing to children, parents, or any other audience you care to imagine, is its capacity to analyse and process immense volumes of data. On platforms like YouTube, where the sheer scale of content is staggering, this capability is essential. With over 50 million active channels and an average video generating just 41 views, AI enables marketers to identify the most relevant and brand-safe content for their audience. This precision ensures that brands invest in advertising placements that are both effective and compliant with strict regulatory frameworks.

Beyond YouTube, AI enhances media planning across multiple digital platforms (be that Social, Gaming, or anything else) by identifying trends, segmenting audiences and predicting engagement patterns. In theory this allows marketers to create campaigns tailored to the nuances of very specific audiences whilst minimising wastage in spend. However, this is where the skill of an experienced media agency or marketing person comes in.

Relentlessly chasing efficiency can often be a zero sum game, so outlining the parameters and benchmarks to work to is vital. Another challenge is that, given the regulatory restrictions put in place to protect children, a large proportion of the toy market’s audience would appear as a different age group altogether in the eyes of (unsophisticated) AI.

Despite its potential, AI-driven marketing must navigate an increasingly complex regulatory landscape. The Children’s Online Privacy Protection Act (COPPA) in the US and the General Data Protection Regulation (GDPR) in Europe impose strict guidelines on data collection and usage for under-13s (variable by territory). AI-powered solutions must be built with these considerations at their core, ensuring that data-driven targeting does not inadvertently violate these laws.

However, many AI-driven ad products function as ‘black boxes’, with limited visibility into how they classify audiences, process data, or ensure compliance. Advertisers must therefore trust these ad-tech companies and independent auditors to validate that these systems operate within legal and ethical boundaries. AI models used in digital advertising must be designed to anonymise personal data, ensuring that brands do not inadvertently collect identifiable information from children without parental consent. These automated systems must be regularly audited to confirm compliance with evolving regulations, preventing any risk of noncompliance that could lead to significant financial and reputational repercussions. At present, the focus of AI led media buying, outside of a youth specialist business, is on the largest spending categories where data restrictions still exist but aren’t as stringent. Many of the solutions currently in market need careful vetting by experts in this space before a toy brand entertains them, lest they risk running foul of the regulations.

While AI-generated personalities have gained some traction in mainstream marketing, they have yet to make a significant impact in the children’s sector. These virtual influencers, powered by sophisticated AI algorithms, offer brands a level of control over messaging, consistency and brand alignment that human influencers cannot always guarantee.

However, AI influencers in kids' marketing present unique ethical and regulatory challenges. Authenticity and relatability are key factors in children's engagement with influencers, and there is a risk that AI-generated personalities may struggle to establish the same emotional connections as their human counterparts. Additionally, brands must tread carefully to ensure transparency, making it clear that these digital personas are artificial rather than real individuals. As AI technology advances, it will be interesting to see if and how AI influencers find a place in the children’s marketing landscape, and which brands take a stance on whether this is a route they are willing to be associated with, or not.

While AI is a powerful tool for efficiency and targeting, there is a growing debate about its impact on creative originality. The magic of marketing to children lies in storytelling, imagination and emotional connection—elements that AI, for all its capabilities, cannot fully replicate (yet!).

AI excels at optimising content distribution, analysing engagement patterns and refining messaging strategies, but it cannot replace the human intuition needed to craft compelling stories. The risk of over-reliance on AI is that brands may default to formulaic, data-driven content that lacks the spark of originality. The challenge, therefore, is to strike a balance between AI-driven efficiency and human creativity, ensuring that marketing remains fresh, engaging and authentic.

Looking ahead, AI’s role in marketing to children will continue to evolve, becoming more sophisticated in its ability to predict trends, personalise experiences and ensure brand safety. However, responsible implementation will be key. Brands must remain vigilant in safeguarding children’s data while leveraging AI’s analytical power to create meaningful, effective campaigns.

As AI continues to shape the future of digital marketing, the industry must commit to using it responsibly, ensuring that children’s best interests remain at the heart of every campaign. By doing so, brands can harness the immense power of AI while maintaining the trust of both young audiences and their guardians.