The Hidden Costs of Online Advertising: Data Privacy and Child Exploitation

The $700 billion digital advertising industry’s collection and use of personal data is creating new concerns about online safety, especially for young people. To learn more about this issue and how it can be addressed, Culture Reframed recently talked with leaders at Check My Ads, a nonprofit that advocates for transparency and accountability in digital advertising.

As the use of the internet and smartphones has grown, so has the digital advertising industry. Now in control of $700 billion worth of ads and a chunk of our personal data, digital advertising is big business. Companies are spending hundreds of millions of dollars to connect with potential customers, tapping into personal data that has implications for everyone’s online safety and presents serious risks for young people.

In recent incidents under global scrutiny, ads placed by major technology companies, including Google, Amazon, and Microsoft, were shown on a website featuring images of child abuse. In other cases, children are delivered ads designed for mature audiences. Events like these have prompted Congress to launch a bipartisan inquiry into advertising placed by technologies developed by Google and Amazon on sites known to host illegal content like child sexual abuse material (CSAM).

Ad technology like this is another safety threat in the digital world that children and teens encounter regularly. To learn more about this growing issue and what parents, caregivers, educators, and others can do to help protect children online, Culture Reframed reached out to Check My Ads. The nonprofit organization advocates for a more transparent and fair digital advertising market, highlighting problems with the ways that ad budgets are spent and personal data is used. Programmatic advertising involves collecting and sharing user data, which can inadvertently include that of children and teens, used to target them with inappropriate ads or to create detailed profiles sold to third parties.

In this Q&A, Sarah Kay Wiley and Arielle Garcia of Check My Ads explain how the digital advertising industry accesses our personal data with little accountability and how their organization is working with policymakers and advocates around the world to advance consumer-informed solutions and regulations that address these issues. They also suggest actions that parents, caregivers, educators, and advertising professionals can take to promote digital literacy and protect young people.

Please share the reasons why Check My Ads was established and some of its recent advocacy work. Why is it so important for your group to exist?

Sarah Kay Wiley: Check My Ads was created to advocate for a more transparent and fair digital advertising market for advertisers and the public. As former marketers, our co-founders realized just how difficult it has become for brands to understand where their ads appear and what their ad budgets fund.

When brands want to run digital advertising campaigns, they typically work with an agency. That agency will work with a demand-side platform, which then sends bids to the supply-side platforms that publishers use to sell their ad space. At each step in the supply chain, intermediaries take a share of the ad dollars and receive access to personal data—largely out of view and with little accountability.

“We’re shining a light in the dark corners of the ad tech ecosystem and advocating for common-sense reform that empowers businesses and people to take back control from the intermediaries.”

We’re shining a light in the dark corners of the ad tech ecosystem and advocating for common-sense reform that empowers businesses and people to take back control from the intermediaries.

How has the issue of online safety worsened in recent years as the digital ad market has grown to $700 billion? What threats does this pose to young people specifically?

Arielle Garcia: Within this supply chain, out of every dollar spent on programmatic advertising, only 36 cents make it to the publisher. Meanwhile, advertisers continue to have their ads run on websites that don’t serve their needs or meet their standards—like “made-for-advertising” websites more likely to attract bot clicks than real humans. As generative AI adoption makes it easier and easier to stand up to these AI spam sites instantly and legitimate publishers struggle to stay afloat, the need for advertisers to have transparency and control of their own ad dollars grows even stronger.

This is about much more than wasted spending. Absent ad tech accountability, sometimes brands’ ad dollars inadvertently fund illegal activity. For example, we recently worked with Sen. Marsha Blackburn, R-Tenn., and Sen. Richard Blumenthal, D-Conn., who launched an inquiry into ad tech companies after research revealed ad tech vendors like Google and Amazon had placed ads on a website known to host CSAM for years.

Policymakers are becoming increasingly aware of the need for greater oversight and accountability of the ad tech ecosystem. The CSAM revelations emphasized the need for ad tech companies to perform adequate know-your-customer diligence on the websites that they monetize and to provide granular reporting to advertisers so that they are able to steward their own ad budgets.

How does a lack of transparency in the complex digital advertising market threaten individual data? How is this used to target kids?

SKW: Before digital advertising, advertisers typically worked with an ad agency to identify which publications their target audiences were likely to consume. Today, most online advertising is transacted through automated, real-time auctions known as programmatic advertising. Over the past two decades, the central promise of programmatic advertising has been that it would help advertisers of all sizes more efficiently and effectively reach their audiences and help publishers monetize—or sell—more of their ad space.

This means advertisers today are typically reliant on a supply chain comprised of various intermediaries. This includes ad tech companies, advertising agencies that plan and execute campaigns on their behalf, and data brokers.

For every dollar a business spends on digital ads, each of these intermediaries gets a percentage revenue share, with most paid based on volume. This creates dysfunctional incentives, as every company in the middle stands to gain by having more money pass through their pipes. In addition, in each transaction, these intermediaries get access to personal data.

This is how programmatic advertising has resulted in constant tracking and the widespread sale and leakage of consumer personal data. This data is compiled by data brokers into detailed profiles about consumers. While the Children’s Online Privacy Protection Act is supposed to provide some protection of children’s data, the opacity of the ad tech ecosystem, and complex data flows, paired with various loopholes that these companies avail themselves of, means that children and teens are still exposed to this pervasive tracking and the resulting harms.

For example, in 2023, research revealed that YouTube was serving adult-targeted ads on kids’ content, meaning that when children (perhaps accidentally) clicked on ads, they could be exposed to tracking by brands that expected their ads to serve to adults. Meta also reportedly hatched a plan with Google and its ad agency to target teens, relying on a workaround—targeting “unknown” audiences in Google’s systems, which Google knew skewed to users under 18—to promote Instagram and other Meta products.

Children are, of course, less aware of how digital advertising works, and how ads are targeted—making them more susceptible to manipulation.

Children are, of course, less aware of how digital advertising works, and how ads are targeted—making them more susceptible to manipulation. But this is about more than harmful ad targeting practices. This data that fuels programmatic advertising is compiled into detailed profiles and sold on the open market by data brokers that have limited obligations to vet the entities that they’re selling data to and next to no accountability for what the data is used for.

How is Check My Ads partnering with policymakers and organizations to raise awareness of online dangers and advocate for policy/regulations to address this issue?

AG: This is a global problem, and our advocacy reflects that. We work with policymakers in the U.S., Canada, the U.K., and Europe to educate and advocate for common-sense regulation of the digital advertising industry that would benefit both businesses and consumers. In the United States, we recently supported Sen. Mark Warner, D-Va., in sending letters asking the Department of Justice and Federal Trade Commission to investigate three ad verification companies, following research that identified that for at least five years, federal government agencies, along with many other advertisers, had their ads served to easily identifiable bots.

In Vermont, we testified before the Senate Institutions Committee in support of the Vermont Data Privacy and Online Surveillance Act, sharing our perspective on how privacy laws would help—not hurt—businesses large and small in delivering relevant, effective advertising while also protecting individuals’ rights and liberties.

In 2024, we launched a campaign with our partner, Friends of Canadian Media, calling for legislation that restores transparency and accountability to our online spaces and makes them safer for everyone. We also briefed members of the Italian Parliament on the need for global oversight of the digital ad industry.

Members of the British Parliament used our report, Digital Advertising and Its Role in the 2024 Southport Riots, to question Google leaders, and we helped shape their subsequent inquiry to Google about the incident.

What actions can families, educators, and professionals take to help protect young people from dangerous online ads?

SKW: We believe that digital advertising literacy is central to digital media literacy. Advertising professionals should consider and be knowledgeable of their agency’s relationships with demand-side platforms, but also the relationships those platforms have with inventory and data vendors. Having a thorough understanding of how advertising dollars flow through the intermediaries is crucial. Knowledge is power; when marketers and brands know better, they can do better.

“We believe that digital advertising literacy is central to digital media literacy.”

For parents and educators, this means explaining to kids and teens how data is collected and compiled about their browsing activity, the apps they use, the purchases they make, and who they are. We can also teach young people how to exercise their right to opt out or delete their data and how to protect their privacy online.

Talk to your kids about digital literacy. For important information on the topic, explore the Digital Literacy section in Culture Reframed’s free Sex Ed Curriculum. These sessions have been designed to develop digital literacy to support healthy, safe, and ethical media use. Create your free account to access this lesson and many more.