Report: Marketers Limit Behavioral Targeting Due To Privacy Worries
- by Wendy Davis @wendyndavis, May 2, 2010
The report, "Economic impact of privacy on online behavioral advertising," issued Friday, estimates that the proportion of online ad budgets devoted to behavioral targeting would quadruple if privacy concerned were alleviated.
For the study, Ponemon questioned 90 marketers about their attitudes toward behavioral targeting, or tracking people as they surf the Web and then sending them ads based on their presumed interests. More than 70% of the marketers said they believed such targeting was effective. At the same time, almost all of the marketers that participated in the study said they restricted their use of behavioral targeting due to privacy concerns.
Ponemon estimates that marketers currently spend 12% of their online ad budgets on behavioral targeting, but would boost that figure to 47% if privacy fears were addressed. (Ponemon's estimate of current spending is higher than some other industry estimates; eMarketer recently reported that behavioral targeting will account for just 4.8% of online ad budgets this year, up from 4.1% in 2009.)
The report comes at a time of increasing interest in Washington about online ad techniques and privacy. Rep. Rick Boucher (D-Va.) is expected to soon introduce legislation that could require companies to obtain consumers' consent before tracking them for ad-serving purposes.
The ad industry hopes to address some privacy concerns by instituting a new self-regulatory program aimed at ensuring that consumers are notified about behavioral targeting and have the opportunity to opt out. As part of that initiative, new icons to tell Web users when they are receiving targeted ads are slated to debut this month.
Online ad companies often say that behavioral targeting poses no privacy threat because the information that's collected is "anonymous" -- meaning it's not tied to users' names, addresses, telephone numbers or other traditional identifiers. But in recent years, policymakers and consumer advocates have questioned whether it still makes sense to distinguish between "anonymous" data and so-called "personally identifiable information," in part because some Web users have been identified based on supposedly anonymous information.
Sounds like a convenient excuse to dump this foolishness.
Wendy consistently has been ahead of the curve when it comes to this inane behavioral targeting. Bravo Wendy.
What's wrong with this picture?
1) Advertisers think behavioral targeting works
2) Consumers generally like well targeted ads better than poorly targeted ads
OK, so far, so good. So where is the problem?
Maybe the problem isn't privacy per se, but rather the dsitribution of the value.
Consumers aren't protesting behavioral targeting. Consumers are protesting against other people making money of of their behaviors.
Take the money that advertisers want to spend on bahavioral targeting and give it to consumers and the problems all go away.
David,
Your first premise is flawed because it's based on your second premise, which is flawed by design in an on-demand world.
The solution you seek can be found simply by asking the right question first: "What kind of ads do you want?" When the answer comes back a resounding "NONE", you suddenly realize you're in the business of trying to figure out which ads people hate less.
The simple truth is that we have an unlimited supply of a product that nobody wants. It's virtually worthless. That's why you can buy online "impressions" for less than a buck per thousand.
All things considered, it's our behavior that needs targeting!
"What kind of ads do you want" is absolutely NOT the right question. it's no more of a right question that "What kind of traffic do you like sitting in" or "what method of root canal do you prefer". It's a rhetorical question that need not be asked.
What I am saying is this....given that consumers would answer "none" to that question.....what do we do? Why do advertisers think consumers are worth $300 billion yet consumers don't want to hide and pay our own money to become less valuable.
You wrote "The simple truth is that we have an unlimited supply of a product that nobody wants." It sounds like you see the world of advertising as a supply of ads that should be demanded by consumers and I can understand why that wouldn't work for you or anyone else. I think you've got your supply and demand economics backwards. The "supply of the product" is consumer time and attention and it's actually quite scarce and in incredible demand.
If you ask another rhetorical question..."what type of job would you want to work at for free"....you may also get a lot of "none" responses. That just means slavery is bad, not employment.
If you change your question to "We want to share with you some of the $300 billlion spent buying consumer time and attention. What kind of ads do you want"....would the answer still be 'none"?
@David: You start out promisingly enough by comparing advertising to being stuck in traffic or getting a root canal, but then you blow it when you wade in on supply and demand.
I say again, we have an unlimited quantity of ads (the supply) that consumers don't want (the demand). And you're right, "What kind of ads do you want?" is a rhetorical question - precisely because we already know the answer! The fact that you don't like the answer doesn't make it any less true.
The only part of your retort that makes sense is when you ask: What do we do?
If you're really interested in a workable solution that consumers actually enjoy interacting with, ping me or give me a call at 219-878-1006.