Rephrasing The Question: How Much Is Your Free Content Worth?
Understanding exactly how consumers perceive the value exchange between advertising and free content is pretty much anyone's guess. Ask any group of readers whether they like ads, and they answer resoundingly, "no." Ask the same group if they prefer getting their content for free, and you are likely to get as resounding a "yes."
For publisher and advertisers, the disconnect between those two attitudes is frustrating and can create a kind of polarization. Some on the content and marketing side fill the void between these consumer sentiments with a hard-lined approach. The grizzled old media guard still regards online audiences as some variety of freeloaders. "Time to pay up, bums," is the weird and condescending tone that drives too many plans for imposing pay walls around content.
On the other hand, advertisers and some publishers also take it upon themselves to define the terms of their value exchange with readers. It goes something like, "We are giving them this stuff for free, so we can do what we want with their data and their behaviors -- grow up."
But what do consumers really think if you rephrase the question about free content and online ad technologies, and try to get at their attitudes about value exchange and trade-offs between behavioral tracking and free access?
In a cursory way, MarketingSherpa recently conducted an online "Popular Media Study" involving 1,314 respondent that starts to get at the issue. It posed a scenario to the user in which she visits free sites, some of which track her online behaviors to push her ads in her travels elsewhere online. A friend informs her that there is a paid alternative service available that does not include any ads. How much would the user be willing to pay for such a service? The answers are fairly predictable, but impressive in their weighting and the price sensitivity they reveal.
I am fine with online ads and will not pay: 87.93%
I would pay $15 yearly fee: 10.29%
I would pay $150 yearly fee: 1.42%
I would pay $1500 yearly fee: 0.35%
It's striking that so many consumers showed such a high sensitivity to price. Most individual sites that are looking to the paid models are hoping for $5 a month fees at least, and this survey shows that only 10% of users would want to pay even $15 a year for access to a range of content without ads.
According to Omar Tawakol, CEO of BlueKai, the key to understanding consumer attitudes toward online advertising overall and behavioral technologies in particular is to start asking the questions in terms of trade-offs. The apparent attitude toward online advertising changes when the consumer is asked to consider the value exchange. "You are forcing them to make a financial trade-off," he says. BlueKai did not commission this research, but did suggest some of the questions to MarketingSherpa.
The really interesting part for behavioral advertising comes when the same group was asked about avoiding tracking ads specifically.
"If you were Mary, how much would you pay right now to consume your otherwise free online content without any web tracking ads? (Mary will still see ads, but they won't be as relevant because they won't be based on tracking.)"
I am fine with online ads and will not pay: 87.87%
I would pay $15 yearly fee: 10.35%
I would pay $150 yearly fee: 1.16%
I would pay $1500 yearly fee: 0.62%
Calling out behavioral targeting technologies specifically did not budge the needle of attitudes at all. Obviously, we shouldn't take this as a "yes" to behavioral targeting. These are the most rudimentary of questions that can't get at the details of how consumers are perceiving online advertising. They may assume that all online advertising has some user tracking involved and so they don't' distinguish between online ads generally and behaviorally targeted ads. Or, when faced with the prospect of paying for content to avoid user tracking, the issue becomes less pressing. We don't really know, and these responses beg for deeper questions rather than hasty and self-serving conclusions.
An even more challenging response from this survey involves the transparency issue. Here is the full Q&A:
"Jack discovers another new tool that would give him complete transparency into what is being tracked about him for web advertising and tells Mary about it. (Mary would have access to a tool which shows her exactly what data is used to influence the ads that she sees (for example, she would see "sports" as one of her interests and can edit it if she wants). With this new tool, if you were Mary, will you change your mind on how much you would pay right now to consume your online content without any web tracking ads?"
I am fine with online ads and will not pay: 84.72%
I would pay $15 yearly fee: 12.26%
I would pay $150 yearly fee: 2.40%
I would pay $1500 yearly fee: 0.62%.
"The response here is very odd," Tawakol admits. "There is not a lot of shift. We would expect them to say that if they had this level of control they would be even more OK with the trade-off of dollars for targeting."
Like Google, Yahoo and a few others in the ad ecosystem, BlueKai offers users a profile editing console that lets them review, modify or just opt-out entirely from their tracking profiles. Does the survey response suggest that transparency is less valuable to consumers than the industry and regulators suppose? Again, it is hard to say. Tawakol warns against misinterpreting the responses. "This doesn't mean that the industry has free reign and we should be satisfied with what we are doing. We still have to raise the bar of transparency so every page and ad that collects data brings you to a page that explains it. It should be to that level of simplicity. And until we get there I don't think the industry has raised the bar high enough. We can't do whatever we want."
In fact, these numbers really point to the need for deeper research and for the question to get more granular about how much people really value free content and what kinds of trade-offs they want to engage in. Whether behaviorally targeted or not, the overwhelming majority of ads are using some kind of technologies for targeting and frequency capping that involve cookies or some rudimentary tracking.
More hinges on this question of transparency and opt-out than behavioral advertising. Arguably, the users responses in this survey are so static across the questions because consumers themselves aren't yet fully involved with the issue. As addressable advertising moves into digital TV and mobile platforms, the fundamental nature of all digital ads and data gathering needs to be addressed much more substantially by the entire value chain (including the consumer) than it has.