Commentary

Consumers Don't Want To Trade Data For Free Services, Study Says

Online ad companies often argue that free material will disappear from the Web if marketers aren't able to draw on data about consumers in order to serve them ads. But many consumers -- particularly those who are 35 and older -- indicate that they're not happy about their data being used in exchange for free services. That's according to a report released today by marketing company Gfk.

For the study, Gfk surveyed more than 1,000 people in March. Overall, only around one in three (35%) said they agreed with the statement “I use free services online and on smartphones/tablets and don't mind if my data is potentially also used for advertising purposes.”

The proportion of people who agree varies significantly by age, with a slim majority (around 51%) of respondents younger than 35 saying they didn't mind if their data was used for ad purposes. Only 37% of Gen Xers (born between 1965 and 1979) agreed with the statement, as did 24% of Baby Boomers (born between 1946 and 1964) and 16% of people born before 1946.

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At the same time, many respondents indicated that they liked tailored ads. Overall, 49% of respondents said they agreed with the statement “Advertising that is tailored to my needs is helpful because I can find the right products and services more quickly."

Last year the trade group Digital Advertising Alliance said that a study it commissioned found that 40.5% of people surveyed prefer ads tailored to their interests to “generic” ads.

But other studies have found that a large proportion of consumers dislike tailored ads. Five years ago, the University of Pennsylvania's Annenberg School for Communication and the University of California, Berkeley, School of Law reported that 66% of consumers don't want tailored ads.

2 comments about "Consumers Don't Want To Trade Data For Free Services, Study Says".
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  1. Joshua Chasin from VideoAmp, April 14, 2014 at 5:40 p.m.

    I wonder what the results would have been if instead of this question wording the question was something like, "I'd rather use online services for free in exchange for some descriptive data about me, than to have to pay for all the content I use online."

  2. Doug Garnett from Protonik, LLC, April 15, 2014 at 4:48 p.m.

    Would be nice to know that answer, Joshua. But economic experience (including the late 1990's) from when companies offer something "free" in trade for ____ haven't shown huge economic impact. Some small success, but not big. So my guess is that consumers are already voting with their information - and would rather pay a reasonable fee for the thing they get. In fact, direct marketing has vast history of free offers - and it teaches us all to be very careful about assuming too much about how and where consumers will love "free".

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