Even many internet-savvy youngsters believe that the "com" in the advertisers' website dotcom addresses stands for community rather than company.
And while the eight to 11-year-olds may astound adults with their ability to whizz around websites, they remain naive about on-line advertising.
Professor Ellen Seiter, of the University of California, San Diego, said:
"Children find it more difficult to understand the commercial intent of websites than they do with television. The industry has decided that games are the best way to get adults and children in, because people linger. Sponsors then build up goodwill and brand recognition - I find it sneaky."
Her comments come after the next Archbishop of Canterbury Dr Rowan Williams hit out against the intrusion of commercialism into childhood.
Professor Seiter, who will be speaking at a toys research conference in London next week, runs an after-school computer class for pupils. She said children were unaware of the advertising on one of their favourite sites, NeoPets.com
On NeoPets, children choose and care for a "pet" which lives in the mythical land of Neopia.
The site has games in which players can win Neopoints. The points can be used in virtual shops on the site to buy food and goods for the pets. Players can also set up shops and trade goods.
NeoPets makes money through Immersive Advertising, a technique similar to product placement. The goods in the shops, for example, may have real-life brand names. Advertisers have included Nestle, Mars and Mattel.
The Advertising Standards Authority, which regulates poster and newspaper adverts in the UK, similarly regulates paid-for advertising space on websites but it has no powers over other forms of advertising.
ASA spokeswoman Claire Forbes said: "We have rules for advertisers targeting children, which say advertisers should not exploit children's credulity, loyalty or vulnerability."
The NeoPets site said that the response from parents is overwhelmingly positive. It adds that teachers can use NeoPets as a teaching tool as it deals with economics, business, computer programming and writing.
The Toys, Games and Media conference at the Institute of Education, London, from August 19 to 22