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Companies make millions off kid influencers, and the law hasn't kept up

Kid Influencers: Few Rules, Big Money
Kid influencers: Few rules, big money 23:06

Watch the new CBSN Originals documentary, "Kid Influencers: Few Rules, Big Money," in the video player above. 

Lots of parents share pictures and videos of their children on social media, but now a growing number are actually making a living at it. The companies that showcase the content of these kid influencers are making millions in the process, while the rules and regulations aimed at protecting children haven't kept up.

Jaqi Clements, mother of 9-year-old social media influencers Ava and Leah, was recently notified that the footwear brand Crocs is looking to collaborate with the twins

"Do you guys know what Crocs are?" she asked the girls, to which Ava replied, "No."

Eventually Ava remembered the iconic foam clogs. What she may not have realized was that posing for a picture with them on her feet could potentially command thousands of dollars from the brand. Jaqi said the whole process is fun for the girls. "Our kids are doing what they love to do," she told CBS News. 

9-year-old twins Ava and Leah Clements and their mother, Jaqi, prepare for a photo shoot.  CBS News

Kyle Hjelmeseth, the founder of God and Beauty, an influencer marketing and management agency that manages the twins, says the metric his company uses for influencer posts in general is a rate of $1 per 10 followers, per post, with a sliding scale as their follower numbers grow to keep the cost from getting prohibitive. 

These collaborations are also lucrative for the brands that participate. A 2016 case study from Nielsen Catalina Solutions, in partnership with TapInfluence and a Fortune 500 food brand, found that 1,000 views brought $285 worth of incremental sales — a return on investment 11 times higher than what traditional forms of advertising provide. 

Influencer marketing can also save brands millions in paid advertising. A report by RhythmOne, a digital advertising technology company that runs influencer marketing campaigns, said one dollar spent on influencer marketing generated $11.69 in earned media value (unpaid social media exposure) for brands. 

The rapidly growing world of youth influencers 09:12

The families and managers of Instagram-focused kid influencers like the Clements twins negotiate brand partnership deals directly with the brands they feature; Instagram does not provide an option to monetize posts through the platform itself. 

On YouTube, however, influencers can monetize their content by selling ads on their videos. The company featured in the ad pays, on average, 10 to 30 cents per 30-second viewing or click. That ad revenue is then split between YouTube and the content creator: 45% for YouTube and 55% for the creator. 

Thus, when parents or managers sell ads on a kid influencer's video, YouTube ends up directly profiting off of a minor who may not even be old enough to use the site. YouTube's terms of service say it "is not intended for children under 13" and that users must "affirm" they are over 13 — but despite that, many kids as young as preschool age spend hours watching YouTube videos.

3-year-old twin Influencers Taytum and Oakley film a YouTube video with their mother, Madison. CBS News

"I think YouTube is a particularly egregious example," said Josh Golin, the executive director of the Campaign for a Commercial-Free Childhood. "They're basically adopting a 'don't ask, don't tell' stance about all the children that are on their site. But at the same time, they're profiting enormously by hosting content that is deliberately designed to attract kids."

Since YouTube and Instagram prohibit activity by individuals younger than 13, all of these kid influencers' accounts are run by their parents. YouTube, which is owned by Google, and Instagram, which is owned by Facebook, declined to be interviewed for this story, but sent statements which included the following: 

"YouTube has always been for people 13 years of age and older and when we become aware of accounts belonging to people under 13, we immediately terminate them. In fact, we terminate thousands of accounts per week as part of this process," a YouTube spokesperson said.

"Influencer marketing continues to evolve and we're committed to working with regulators, brands, and influencers on best practices and enforcement," a Facebook spokesperson said.

Influencer marketing is estimated to be a $6.5 billion to $8 billion industry – and growing fast. CBS News

Child labor laws haven't kept up

The No. 1 earner on YouTube last year was the 7-year-old star of the hit YouTube channel Ryan ToysReview. With a following of over 21 million subscribers, Ryan rakes in big money from videos showing him enthusiastically unboxing and reviewing toys. Forbes estimates he earned $22 million in 2018 alone, almost all of it through advertising. And YouTube also made millions.

"YouTube, based on whatever percentage they're getting of that, is probably making $10 million to $15 million just off of Ryan's videos," says Golin.

Overall, influencer marketing of every age is expected to be a $6.5 billion to $8 billion industry by the end of 2019 — a figure that's projected to grow to $15 billion by 2022 — and the number of kid influencers is likewise expected to rise. With billions of dollars at stake and little regulation to control a booming market, questions over the exploitation of children and child labor on social media are bound to arise. 

"So, whether this is child labor or child exploitation is, you know, something that people are really looking at now," explains Karen North, a clinical psychologist and professor of communication at the University of Southern California who studies social media. "When kids go on set for TV or film there are a lot of rules. There are no rules yet for what you can do in the privacy of your own home." 

Should more be done to protect youth influencers? 10:28

In the late 1930s, child labor in the entertainment industry was regulated with the passage of the Coogan Law in California, and similar legislation in New York, Louisiana and New Mexico. Named for child film star Jackie Coogan, who sued his parents after they squandered his money, the law requires that 15% of children's earnings get stashed away in a special "Coogan account" trust fund until they turn 18. The law also limits children's work hours.

However, times — and the entertainment business — have changed, and the laws haven't kept up. Despite the rapid growth of social media platforms, most state child labor laws have have yet to include amendments regulating child labor on social media, and recent efforts to amend the law in California have failed. In 2018, an amendment was introduced to the California Labor Code that included requiring employers to get a permit from the Labor Commissioner to engage a minor in social media work. But by the time the amendment was passed, that part of the measure had been struck out.
Some kid influencers' parents, who in many cases are their children's managers, don't see the need for more regulations. They say it's a family endeavor, their kids are having fun, and it should not necessarily be considered "labor." 

The parents of 3-year-old influencers Taytum and Oakley, twins with 3 million followers on Instagram as well as 3.6 million for their family YouTube channel, argue that they're the ones doing the lion's share of the work negotiating with brands and organizing photo shoots, and as long as they provide for the kids financially, they can decide how the money is spent.

3-year-old twins Taytum and Oakley Fisher have 3 million followers on Instagram. CBS News

"Who gets to decide who does the work? You know, my girls are in a picture — they're in a picture and that qualifies as work?" asks Kyler Fisher, Taytum and Oakley's father. "There's a lot of outsiders out there that think that my kids are a huge integral part of the business, and they are, and they come up with these numbers in their head about how much we should be saving for them, or how much goes to them. But I don't really think that they have an option or the luxury of deciding those things because it's not their business. However, we are saving for our kids."

Their mother, Madison Fisher, agrees. 

"We're going to provide them the perfect life that they need," she said. "And luckily, with the traditional media, there's their Coogan account which we have set in place, so like every time the girls do anything traditional media, like all the films and TV shows and commercials they've done, they already have an account set up." 

What is it like to manage a youth influencer? 06:33

The Fishers are aware of the risk that children could be exploited for the money they can earn through social media platforms. But they say they're doing what's right for their twins. 

"If there's families out there that are using their kids to make money, and then they're taking it all for their own expenses, then that's really sad. For us, we're taking that money that we've made, obviously it just goes into our family account, and we're just providing a life for our girls that's going to be a great life."

It is difficult to know what the kids themselves think about the influencer industry, or how they'll feel in the future about having shared their childhoods with millions of followers online. Most are still too young to fully understand the implications, and some are too young to even know what social media is. 

But 9-year-old Leah, one of the Clements twins, says they enjoy being influencers and don't feel like they're being pushed by their parents.

"They don't force us to do it. We want to do this," she said. "Because it's really fun."

Three sets of identical twins talk about being influencers 03:12

Editor's note: This article has been updated to remove an incorrect estimate of what the Clements twins may earn from a post, and to clarify that the estimated amount brands pay is based on a sliding scale.

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