For the last decade, Web companies have insisted that behavioral targeting, or tracking consumers online and serving them ads based on their presumed interests, will benefit both consumers and marketers.
The ad companies say that marketers will benefit because they won't waste ad dollars reaching people who have no intention of buying their products. For consumers, the theory is that they benefit by receiving ads that are relevant.
While consumer advocates have questioned whether behavioral targeting infringes on people's privacy, ad companies have largely dismissed such concerns. The industry argues that targeting is anonymous, so people are at no risk of either identity theft or exposure of sensitive information. Criticisms on the ground that tracking is "creepy" are dismissed as irrational, and privacy advocates are presented as "elitists" who are out of touch with mainstream consumers.
Well, a new study released today by professors at the University of Pennsylvania's Annenberg School for Communication and the University of California, Berkeley, School of Law debunks the notion that consumers don't object to online ad targeting. On the contrary, the researchers found that two out of three Web users don't want customized ads.
For the study, based on a telephone poll of 1,000 Web users, respondents were asked whether they wanted ads, discounts or news that was tailored to their interests. Not only did 66% of respondents reject tailored ads, but 57% said they didn't want tailored news stories and almost half, 49%, said they didn't want customized discounts.
What's more, more than half of those who accepted tailored ads in theory also said they didn't want those ads customized based on their activity at other Web sites.
Tellingly, respondents indicated they viewed online tracking as a threat even when done anonymously.
"The rejection of even anonymous behavioral targeting by large proportions of Americans may mean that they do not believe that data about them will remain disconnected from their personally identifiable information. It may also mean that anonymity is not the only worry they have about the process. Being labeled in ways they consider unfair by marketers online and off may be just as important a concern," states the report.
Researchers also speculated that Web users are afraid of embarrassment. For instance, the study says, people might worry that a computer they use at work might receive ads that are more relevant to non-work activities.
Executives at ad networks often say that consumers would accept behavioral targeting if they viewed it as the price of free content. Note, this argument might overstate the connection between free content and targeting, considering that behavioral targeting currently accounts for only a small percentage of online ad dollars. Besides, paid sites as well as free sites work with behavioral targeting companies.
Regardless, researchers reported that respondents said they didn't want to be tracked even for free content.
The Network Advertising Initiative's initial response is that the report is "a one-dimensional view of a more complex issue."
"The online industry is working to find a balance between consumers' demand for free services and their expectations of appropriate privacy controls -- and through initiatives like enhanced notice, we are working hard to get that balance right," Charles Curran, executive director of the NAI, tells MediaPost.
The Federal Trade Commission has emphasized that ad companies should do a better job of notifying users about tracking. Currently, many Web companies convey information about tracking in legalese-filled privacy policies that very few people read, much less understand, and that have so many loopholes that they're virtually meaningless.
But this study suggests that better, clearer notifications might not solve the ad targeting industry's problem. In fact, the study seems to indicate that merely informing consumers about ad targeting -- at least in its current incarnation -- will result in a wave of opt-outs.
Still, that doesn't mean that online ad targeting is doomed. The report's authors offer some suggestions for making targeting more palatable. Among others, companies could let consumers wield more power over the type of data gathered. "In return for collecting and using consumers' data, marketers should allow those consumers to learn exactly where the information came from and how it is being used," the report states. "Marketers should also allow consumers to decide which of the collected data should be used and for what purposes, and which should be deleted."
Jules Polonetsky, co-chair and director at the think tank Future of Privacy Forum, says that industry executives would do well to take such recommendations seriously. "It's important for the industry to take reports like this as a wake-up call," he says. "Even the most enthusiastic privacy advocates aren't looking to shut down commerce. They're looking to drag some of this into the sunlight."
I am personally offended by the ads that show up just because they/you know where I live. I cannot begin to tell you how many times I've seen "Rye Brook" mothers blah blah blah something about a better way to lose weight. If they actually knew something about me besides who my internet provider and my zip-code were, they might know that my doctor says I'm ten pounds underweight. I'd truly prefer to see random ads than offensive intrusive ones. I might actually click on the ad for something I know little about and then I might buy something.
This is a classic talk-is-cheap problem. It's much more meaningful to see what people do in the field. Consider this: users may say they hate targeted ads, but we know they hate untargeted ads even more. For more on this, see http://ssrn.com/abstract=912524 Eric.
To a user, as soon as you mention the word BANNER AD, they run for the hills, with good reason too...for too long they've been targeted with annoying, misleading and irrelevant banner ads, we all have. So this type of research would seem to draw a negative response from the get-go. With the latest methods of anonymous tracking and targeting, users are benefitting from this customized advertising. The spike in ad engagement and conversions from Remarketing tells us a much different story than the findings of this report. On paper, a user would fear "targeted ads" but if they only knew more, I am confident far more users would prefer the progression of customized ads.
The problem really lies not only in transparent communication but in that most just glance over privacy policies and certainly don't want to spend anymore time on weeding out all the pros and cons. It should be made simple. Yes, no, period.
Being tracked is definitely seen as creepy, even if offers come along that are free or worthwhile. Maybe tracking itself needs to get a "facelift" and be proclaimed as OK. This can be done through transparency in messages, not just at the end of pages in a font size that is unreadable -- quickly that is.
I've been using Facebook as a means of doing what I have termed 'silent marketing.' Using a Fan Page I create a virtual place of relevant information about a particular product. Not selling the community, but informing them. What is occurring is interesting. Users are responding to the information, and making purchases without being 'sold.' For me as an internet marketer, it is a low cost, highly responsive means in which to generate an income while still providing a service to my 'fans.'
The ad industry not really being honest about what we are asking for. It sounds like what is being pondered is actually... "how can we get consumers to feel OK about sharing PI despite the fact that we are unwilling to share any of the bounty and value their PI generates". If consumers, who own their personal information, received the money that was spent buying that information...does anyone think 2/3s of Americans would object? http://tinyurl.com/yahjjdh
Joseph Turow, the lead on this study, is the author of Breaking Up America: Advertisers and the New Media World. He blames targeted advertising for the fragmentation of society, a premise that few others embrace. Is this the right guy to be conducting this important research. He's not at all objective about the topic.
Consumers today are strongly opposed to targeted ads because the industry has failed to provide targeting that gives consumers value and control. Today, if I buy a Jonas Brothers CD for my niece, Amazon takes my transaction as enough reason to target me with every Disney Pop Star product in it's inventory. We know that targeted ads offend us more than untargeted, because we don't want to be branded by people who are trying to tie demographic and psycho-graphic indicators to us in order to enrich themselves. Targeted advertising will come, and when it does consumers will embrace it because it will truly improves experience, gives them control over their data, and allows them to control when they see targeted ads.