Online Tracking Bugging Consumers
By Tom Ryan
According to
a new survey, two-thirds of Americans object to online tracking and object
even more after being told exactly how they are being tracked. The survey
comes as lawmakers are increasingly looking into online tracking due
to privacy concerns.
The survey,
according to The
New York Times, was
based on interviews with 1,000 adult internet users and came from the
University of Pennsylvania and the University of California, Berkeley.
The researchers said it represented the first independent, nationally
representative telephone survey on behavioral advertising.
According to
the survey, 66 percent of respondents indicated that tailored ads in
general did not appeal to them. Then they were told how ads tracked them
at company websites, and followed them to other websites and offline
places like stores.
After being
told, another seven percent beyond the initial 66 percent said it was “not
O.K.” to be tracked by a company’s website. Another 18 percent said it
was “not
O.K.” to be followed to other websites. And an additional 20 percent
were “not O.K.” with being tracked offline.
A critical
finding, according to the professors, was that 55 percent of respondents
from 18 to 24 objected to tailored online advertising.
“We sometimes
think that the younger adults in the United States don’t care about this
stuff, and I would suggest that’s an exaggeration," Professor Joseph
Turow, lead author of the study and a professor at the University of
Pennsylvania, told the Times.
In other areas,
49 percent of respondents said tailored discounts were “O.K.” and 42
percent said customized news was fine.
The survey
also found that the respondents knew little about privacy laws regarding
the internet.
Asked whether
there should be a law that gave people the right to know everything a
website knew about them, 69 percent said “Yes.” A whopping 92 percent
supported a hypothetical law requiring websites and advertising companies
to delete all information about an individual upon request.
The professors
suggested that the first step is to explain to consumers how they are
being targeted online.
“I don’t think
that behavioral targeting is something that we should eliminate, but
I do think that we’re at a cusp of a new era, and the kinds of information
that companies share and have today is nothing like we’ll see 10 years
from now,” Prof. Turow said.
Discussion Question:
To what degree will privacy concerns affect the potential to reach
consumers through online advertising? Should advertisers be clearer
in how they are tracking consumers? What type of tracking do you ultimately
expect will be accepted by consumers?
I think you have to take all this with an enormous grain of salt. You can get the same kind of results about TV ads, and in-store ads, and just about all kinds of ads. The reality is that consumers don’t like any kinds of ads–but they work. People respond to ads, and they respond better to targeted ads.
What’s more interesting to me is that consumers want transparency–they want to see what a company knows about them. There is a group at MIT and some others within the European Union that are looking at ways to give consumers more control over the information generated by their behavior and transactions online and offline, so that they have the ability to decide who to share what information with. I don’t think this is going to go away, particularly if companies abuse the ability to track and target consumers. Think about this, retailers: what if you had to provide user security and access to your sales transaction logs to all of your customers? What if for some customers you were required to delete all but the summary information of their transactions?
I think the most important thing that consumers have learned is that their data–behavioral, demographic, purchase, intent, etc–has value. So far, it’s advertisers who have benefited from that value. Some would argue consumers have too–through increased relevance. But I guarantee you that consumers don’t see it that way–and it may not be long at all before they demand either more control/less out there about them, or a bigger slice of the pie.
Behavioral ad targeting is a bit like direct mail–it’s only junk when it’s poorly targeted. Unfortunately, marketing is a lowest common denominator profession–we all suffer at the hands of those in our profession who go for the marginal return and pollute the system.
Even though I’m in this profession, I don’t particularly like it when I visit a website and the next thing I know I’m being constantly served ads for that site. It’s creepy and feels invasive.
If marketers don’t want regulations in this space, we’re going to have to quickly agree to a code of conduct that includes how often and for how long a given advertiser can use a piece of consumers’ personal data to serve ads to them, how long advertisers can hold on to personally identifiable data and how consumers can opt out if they so choose. Otherwise, we should all expect legislation similar to “do not call” that severely restricts everyone’s ability to capture and use personally identifiable data.
U.S. consumers have traditionally responded positively to having information being gathered when they see a valuable return. In this case, getting tailored advertising may not be viewed as a valuable return so consumers object. Over 40% of respondents in this study indicated that lower prices were a good return for gathered information.
Just telling consumers what information is being gathered and how it is being gathered is only the first step. Consumers also want to know why the information is being gathered (because it can is not sufficient) and what is being done with the information and with whom it is being shared. Providing this information to consumers is the first step. Then the consumers will determine whether or not they approve of why and how the information is being gathered and what is being done with the information.
The worst ones are probably the ones consumers never hear about. Supposedly Google has every search conducted since 1995 stored in its data bases. As time goes on and more data is collected it becomes only more valuable. Google can fill the website pages you visit with more personal links. In some ways it is a very straightforward process, advertisers pay for “click throughs” and Google works to maximize the appeal of the links. It is kind of a win/win for Google and the advertiser, and the consumer wins if they were really shopping for something in the first place.
Most people have accepted the fact that there is no longer any anonymity on the Internet. Some people will still not make any purchases online. TV cameras are everywhere; in stores, malls, and now even outdoors. I don’t know if this is right or wrong. I think the correct answer is that it is more how you use the data than the fact that it has been collected.
Strict rules have to be put in place on security, retention and use of data. The collector and holder of personal data has an obligation to make sure it is not usurped and that it is only used for its intended lawful purpose. The husband’s private investigator cannot have access to his wife’s movements at the mall. This puts a certain burden on the entity that collects this data. Individuals need a way to “opt out” of online data collection and the default should be “no.”
This does not prevent collectors from accumulating non-personal data, so they can monitor basket sizes and cross category influences. The question is whether they should be able to monitor across visits by assigning some kind of ambiguous ID to a customer? I think the answer is yes. This will allow retailers and manufacturers to understand purchasing habits without knowing the specific customer. Award points and “stateful” data about a consumer must be kept separate from the identity data.
This type of tracking is a whole lot different than that of my salesperson at my favorite men’s store calling or sending a post card to let me know they have items that I have purchased before on sale or a sport coat that I might like that just came into the store in my size.
Retailers and marketers can and should expect this to become heavily regulated. As a result, they will have themselves to blame for poor utilization of data and their failure to best use the data to provide real value to ‘their’ customers. The key word is ‘their’ in relationship to customers.
Too often, retailers are misled in this area as a means to create loyalty rather than do the work it takes to get the fundamentals right towards the customer experience. That, in the end, is what has the best opportunity to create loyalty. In the meantime, they’ll spend millions spinning through data that they have no idea how to utilize or that will not produce the type of results had they placed their focus on what really matters–the customer.
One day the American consumer is going to wake up and realize that Big Brother is actually here and every activity that they have done has been recorded, digitized, and stored some where. When they realize what this means, we are going to see a major backlash concerning what data is gathered, how it is stored and how long it can be retained.
The only problem is that legislation is not going to make it go away; it is only going to make it harder for most of us to find it. The ethical companies will follow the law and the unethical companies will figure out how to exploit all of the data.
Sorry Nikki, but I disagree that this issue should be “taken with a grain of salt.” This is a significant issue.
The problem is that we are all being bombarded with ads. I have been in the technology industry for over 20 years and worked in network protocol analysis for years. It started with employers analyzing employee activity. We built systems back in the ’90s that would let companies monitor activity to ensure systems were being used for business and to avoid sexual harassment issues that were starting to arise in companies. We also developed an application for an ISP which was one of the first “click stream analysis” applications ever built. It was originally designed to enable “push marketing.” Great concept, but people are being bombarded by ads and they are fed up. (You can’t even watch TV without pop up ads on the lower left corner popping up).
This problem is significant. I am not a big believer in government regulation, but this is an issue in desperate need of regulation. Individuals are bombarded with ads and they are bombarded with spam. First It is a huge waste of company time and money when employees spend an hour a day weeding out spam. Second, these tracking demons are distributing viruses which are wasting both company and individual time. Third, managing the cookies, viruses, spam, etc, is expensive as well as time consuming. Fourth, individual privacy is at risk. Lastly, it isn’t working. The push ads that people are getting are more of an annoyance than anything. Users should definitely have the ability to allow or disallow tracking by any web site. Even if you don’t care about privacy issues, you should care about virus distribution and the associated costs.
There is a wide range of opinions among consumers about privacy and about how they protect their privacy. Consumers living near the coasts may have more objections to data collection (stores with loyalty programs were picketed in one case). Besides how the data is being used now, a big questions is how it will be used in the future. Privacy policies can be changed and leaks can occur.
This is a very fluid area. Publicity about how data was used to harm someone could generate major new state or federal regulations and add to the liability for the data collector.
Let’s face it, the privacy laws elsewhere, namely the EU, are more stringent than ours in the U.S. As Lisa points out, as long as it’s legal, there will be bottom feeders in marketing that continue to spam and pursue “spray and pray” (or is it “spray and prey”?) advertising activities.
Consumers will not willingly opt-in to tracking or much less, into an email database, without a proper quid pro quo from the marketer. Of course it’s a numbers game and that is the whole reason these media are priced in CPM…it only takes a fraction of one percent to make advertising pay. Yet this doesn’t factor in the opportunity cost of annoying or being irrelevant to the other 99.X%.
The issue of privacy and value proposition are a fundamental reason why loyalty marketing is so powerful. It provides more than passive tracking and this allows marketers to know with certainty that they can drive sales results without spamming or mass advertising (and yes, much of the online advertising is mass advertising, just in a digital form).
I recently had a lesson on how this tracking and alleged targeting works far better in the targeters’ minds than it actually helps consumers. A relative of a friend had foot surgery for a condition which, as soon as she is out of her “boot,” will require her to wear shoes into which orthotics will fit. Since I have an (some would say unhealthy) interest in shoes, I volunteered to help out by doing some online research into what shoes were available–and decent looking. Within minutes I was being bombarded with ads on my computer for an array of diabetes products (condition had nothing to do with diabetes), walkers, even an ad for an assisted living facility.
At first I was amused, and after a couple days when I didn’t “click,” those kinds of ads ceased. It was annoying though, and reminded me of an old saying most of our sage elders used which had to do with the perils of “ass-uming things.” I suspect many computer users who have been ad targeted have had similarly bizarre and disconnected experiences, and are therefore becoming much more aware of this tracking process–as well as critical of it.
People just don’t like the idea that a company is TRACKING them. The average person won’t see a compelling reason for a retailer, like Safeway, watching sites that person visits on the Web. They’ll wonder why a given retailer will want to know whether they visit the Fox News site or the CNN site.
I don’t think this issue is trivial, and I don’t think it will go away. Until people can discern some real personalization in ads, they’ll wonder what in the heck retailers are doing tracking them.
It is important to remember here that unexpected email and ads that do not fit your needs are called spam and annoyances–unexpected email and ads that fit your needs are called great customer service!
The problem is that marketers have been using the “spray and pray” method of interactive marketing, rather than really leveraging available data to personalize communications and offers. When consumers object to the use of their data, they feel that the data is being used AGAINST them, rather than for them. When I see a recommendation on Amazon telling me that because I bought a specific book, here is another I might like, it is not intrusive, it is helpful.
The power of the data is truly in the use of it to improve the customer experience for repeat customers. Use it well, and you will have no problems. Use it unwisely and you will lose the right to use it at all.
One of the real dangers of tracking consumers is the potential for misuse. Discrimination has been a rally cry for decades but tracking makes discrimination easy. Take for example, my grocery store. Two people walk in the front door with $10 in their pocket. Both place the exact same items in their grocery cart. One pays $10 for his items and the other pays only $6. Has discrimination taken place? I think it has. Mr. $6 got a huge discount because he was a member of the retail establishment’s “club” and swiped a card at checkout. Can a retailer manipulate membership in his club? Sure he can!
Now you take this same situation and apply it to online shopping and it gets worse because a great deal of information is collected when you purchase online. It’s a nightmare waiting to happen and as usual, the the ones most damaged will be the ones least able to afford the loss.