"At PikLuk, we value your privacy and that of your children. To that end, we: Do not market to your children."
Rather than seal yourself off from this potential revenue source you might want to re-phrase the wording on your site to say that you do not allow unnapproved/offensive ads to reach their kids. I honestly wouldnt feel bad if you offered limited ads since your service is free. I dont think parents will mind as long as the ads are carefully filtered for offensive content.
Wow, you are in essence the gate keeper to the ads kids can see. If ad agencies dont go through you then they cant reach your highly desirable user base, even if they are already advertising on the web page that the child is viewing (b/c you block them). That is just huge.
Sorry if I'm thinking "evil" here, but I'm just offering suggestions with purely business interests in mind.
Children click on adverts, but do they 'convert' - leads or sales. If they do not, that click revenue is going to diminish quickly as advertisers start to realize.
I'm not married nor do I have kids, but I have definitely seen the effects of a child desiring something. Often that desire comes from the influence of an advertisement.
I dont think online ads have traditionally targeted young kids much because there is not really a reliable means to focus in on them. The demographic can be very specific (as far as age range). Pikluk could be an new way to target a specific age bracket on the internet, which would be very desirable to advertisers.
I hear you about the legal issue of blocking ads and replacing them with your own though. People might have serious problems with that..