Showing children in a sexual manner now threatens to cause widespread outcry, it claims.
At the same time the research, published by the Advertising Standards Authority, reveals serious public concern about the content of posters which children will see.
Almost all of the 2,000 people questioned in the survey, carried out by BMRB, expressed their disquiet about the potential exploitation of children in advertising.
Ninety-two per cent also agreed that special care needed to be taken by advertisers when deciding on the content of posters and their location.
Christopher Graham, the ASA's director-general, said: "Advertisers must heed the warnings that the UK public has given them. While some of society's attitudes have changed over the years, portraying children in a sexual way is unacceptable and will not be tolerated in non-broadcast advertising.
"Advertisers must also take on board concerns about the images that can be seen by children, particularly on posters."
The survey also highlights serious concern about advertising which is deemed to degrade, demean or humiliate people or that which depicts violence.
The use of shock tactics in ads - provided it is for a good reason - was accepted by 87 per cent of people. But while most were tolerant of it in government and charity ads, the use of shock tactics by commercial advertisers was found to be less acceptable.
One in five of those questioned claimed to have been offended by advertising they had seen in the past year.
Nevertheless, advertising remains popular with two-thirds of people saying they enjoyed seeing it.