The speed of the development of the internet, fuelled by a tech-savvy generation that has grown up alongside the web, offers endless opportunities to reach the impressionable audience of under-16s.
However, following the rise of social networks in recent years, pressure has been mounting on the Government to do more to protect children using the web.
In March 2007, TV psychologist Dr Tanya Byron was commissioned by Prime Minister Gordon Brown to conduct the independent Byron Review, looking at the risks to children from exposure to potentially harmful or inappropriate material on the internet and in video games.
Her findings, published in March 2008, led to the creation of the UK Council for Child Internet Safety (UKCCIS) in October - a new watchdog consisting of more than 100 public and private-sector organisations working with parents, young people and the Government.
The group, which includes representatives from the Internet Advertising Bureau (IAB), AOL and the Child Exploitation and Online Protection Centre (CEOP), will be responsible for delivering Byron's recommendations and will report directly to the Prime Minister.
Although it is early days, the council is expected to outline a set of regulations for advertisers and media owners that will ensure children are not exposed to harmful content, inappropriate ads or members of the public with unsavoury intentions (see box, page 13).
While the industry is intrigued to see what the council will come up with, it is not expecting a wave of disruption through the sector because there is already a considerable amount of self-regulation among media owners, as well as a number of groups set up specifically to address the issue of internet safety.
The CAP code (the British Code of Advertising, Sales Promotion and Direct Marketing) offers a regulatory framework of what is acceptable in advertising, while the Advertising Association's Digital Media Group, set up 18 months ago, is examining whether the existing CAP framework sufficiently covers new areas of digital advertising.
In addition, the Government announced the launch of an independent study of the "commercialisation of childhood" in April and, in 2005, owners of ad networks banded together to create the Internet Advertising Sales House (IASH) as a direct response to agencies' calls for guarantees that ads will only be placed next to suitable content.
Nick Stringer, the IAB's new head of regulatory affairs, welcomes the creation of UKCCIS and outlines how simple changes by advertisers can kill off undesirable websites. He says: "Advertising is like oxygen for undesirable websites - it gives them the funding to exist. We need to cut the funding of these sites and we can do that by not placing ads on them."
But what will the new rules mean for the day-to-day workings of digital media owners? Not much, according to Matt Simpson, head of digital for OMD Group. "The CAP code leaves people in no doubt what they can and can't do online and advertisers are very respectful of it on the whole, as are agencies," he says.
"Agencies are not carrying out work that's too close to the line, so their business models are not going to fall apart if small changes are introduced."
The past year has seen a number of high-profile slip-ups by advertisers. Ads for blue-chip companies such as Orange and Virgin Media were found on explicit website Onlyfights.com, after spots were sold via blind ad networks.
But Simpson believes that if advertisers refuse to take the risks blind networks present, there should be no need to worry. "Agencies have to take a whiter-than-white view or they won't get clients," he says. "If we're presenting a media plan to a fast-food chain, we have to prove we will only put ads in front of an over-16 audience."
However, Paul Robinson, worldwide managing director of international kids' TV channel KidsCo, is sceptical about the long-term benefits of the Government's ban on advertising foods high in fat, sugar and salt (HFSS) to children, effective from 1 April 2007.
"The clampdown on advertising HFSS foods to children is well-intentioned but will achieve nothing but take money out of the kids' business," he says. "People who go to fast-food outlets every day do so either because they are ill-educated and don't realise what they're doing or because they don't care what they're doing. Frankly, changing advertising is not going to make a difference."
Robinson's views may not echo those of child-health experts or the Government, but he is not alone in his call for education rather than regulation. Chris Seth, managing director, Europe, for Piczo, is working hard to pre-empt further regulation and believes his teen social networking site is going the "extra mile" to protect children.
Education not regulation
Piczo has a Safety at Piczo area on the site, with advice from the COI, ChildLine and NSPCC. Furthermore, the social network has no search facility, which provides an extra level of safety that some sites cannot guarantee.
Seth says: "Search generates a lot of traffic and revenue, but we have ruled it out because we believe it's important to maintain a higher level of user safety and privacy."
However, the internet remains a largely unrestricted medium. KidsCo's Robinson, who is "incredibly diligent about the data captured" on his websites, points out that because the internet is not a territorial medium, it is harder to control.
"The internet is a global platform, so if the UK does something, it doesn't affect the rest of the world," he says. "Then you have the question of taking away people's freedom: how do you regulate but allow people to be free to do what they want to do?"
The media industry is united in its belief that children should be protected from harmful material when they are online. But many are concerned that taking the media to task for indirectly harming the welfare of children - and piling more and more restrictions on the industry - will ultimately lead to unworkable rules.
The majority of media owners and advertisers believe additional rules on what children can access online are unnecessary. Some feel there is already sufficient self-regulation, while others believe further regulation would have a negative impact on the sector financially or would have no effect whatsoever.
But one thing is certain: when these regulatory discussions do take place, they are best led by a forum made up of advertising experts, rather than government employees with no first-hand experience of commercial digital media.
ACTIONS PROPOSED BY THE BYRON REVIEW, MARCH 2008
To create the UK Council for Child Internet Safety in order to develop a) better regulation in the form of voluntary codes of practice and b) better information and education involving the Government, police, schools and children's services
To ensure the advertising industry works with media owners to raise awareness of their obligations under the CAP code to advertise responsibly to under-18s on the internet and that the council keeps this under review
To focus attention on reducing the availability of harmful and inappropriate material in the most popular parts of the internet
To increase children's resilience to harmful material so they have the confidence and skills to navigate new media
To help parents learn how to protect children and to teach children what they can do to protect themselves, such as not giving out their contact details online
To develop an independently monitored voluntary code of practice for the relevant industries on the moderation of user-generated content
To ensure computers sold for home use in the UK have Kite-marked parental control software and that ISPs advertise this prominently when users set up their internet connections
To require search providers to make it obvious to users what level of search they are using and to give them the option to "lock" their search setting
To require every search engine to have a clear link to child-safety information, as well as safe search settings on the front of its website
To work with the advertising industries to take steps to "future-proof" the current system for regulating advertising, in order to take account of the new forms of online advertising that are currently outside the remit of regulation.