Will greater transparency drive a digital targeting backlash?

May 21, 2018
Tom Ryan

According to a Harvard Business School study, consumers are uneasy with many of the core techniques Facebook, Google and other platforms use in targeting digital ads. These include ads based on information gleaned from third-party websites or inferences about an individual.

The study, “Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness” follows calls for greater transparency in the wake of the Facebook–Cambridge Analytica scandal and surge of data breaches.

The study concluded that actions triggering privacy concerns online are similar to those causing concerns off-line.

For instance, when shown ads “based on the products you clicked on while browsing a third-party website,” respondents were 24 percent less likely to purchase the item versus when they were told the ad was based on information gained from the current website. Tracking users across websites was found to be “akin to talking behind someone’s back.”

Respondents were also 17 percent less interested in purchasing an item seen for ads “based on information that we inferred about you” versus information the respondent provided. Even if accurate, “an overt inference about someone can be taboo,” the study concluded. Data on sexual orientation, health and finances is especially sensitive.

On the positive side, transparency can help with “acceptable information flows” including “first-party” information from websites being browsed and “declared” information openly provided by individuals.

Consumers were found to engage more with ads on platforms they trust. Given more control over information “consciously shared” increased engagement. Providing reasons for the use of browsing data, such as to increasing relevance, can also boost click-throughs.

But actions seen violating the acceptable use of information “will activate privacy concerns that ultimately eclipse the benefits of personalization; even the most personalized, perfectly targeted advertisement will flop if the consumer is more focused on the (un)acceptability of how the targeting was done in the first place,” the study found

Researcher cautioned that much is unknown about how consumers respond to online data collection and ad targeting, and people “don’t always behave logically when it comes to privacy,” sometimes perhaps sharing intimate personal details with strangers while keeping them from friends.

DISCUSSION QUESTIONS: Will greater transparency likely lead to a consumer backlash against targeting practices based on third-party information sharing or inferred user attributes? Will experiencing a more relevant web experience convince consumers to accept the tradeoffs?

Please practice The RetailWire Golden Rule when submitting your comments.
"It’s pretty obvious to consumers how much they are being targeted and tracked. In fact, paranoia reigns …"
"Targeting will be very important in a GDPR future, but it will be based more on first party data that is fully permissioned."
"I would disclose more and take the high road. At the end of the day, retailers are not going to win by tricking consumers into making purchases."

Join the Discussion!

18 Comments on "Will greater transparency drive a digital targeting backlash?"

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Dr. Stephen Needel

If we know that shoppers don’t like targeting based on third-party information sharing or inferred user attributes, we’d have to be pretty stupid to be transparent and tell them that this is what we are doing. We’ve always thought in the past that shoppers were willing to give us information in order for us to improve their experience. Maybe this is coming to an end or maybe we need to deliver a demonstrably better experience for them. When I say that, I mean that the shopper has to believe the experience is better, not the provider – too often we substitute the latter for the former.

Lyle Bunn (Ph.D. Hon)

Data surveillance or “insights eavesdropping” will make consumers nervous unless they know specifically what the reward is for them. Targeted advertising and promotion is mostly a nuisance and too often shows just how poorly data analysis is done. But it does get results even at its current state of use, so marketers can hang their hats on a long career in data-driven marketing.

Paula Rosenblum

Just because you CAN do something, doesn’t mean you SHOULD. It’s pretty obvious to consumers how much they are being targeted and tracked. In fact, paranoia reigns …

Steve Montgomery

Paula I wholeheartedly agree. Joseph Heller’s Catch-22 quote “Just because you’re paranoid doesn’t mean that they aren’t out to get you” certainly applies to today’s internet users.

Ian Percy

There is so much disdain and condescension toward customers going on. Because I’m involved somewhat in the agriculture world, I keep getting the image of us being like hens or piglets jammed into unnatural environments generating data with every breath we take. There was a Starbucks item on RetailWire a while back that showed we can’t even get a cup of coffee without becoming data. Even the comment that people “don’t always behave logically … ” is nonsense. Just whose “logic” are we talking about here? This whole thing is aimed at how to make us chickens and piglets think this constant analysis is actually good for us. The brutal truth is we’re being used. It is time to revolt!

Kevin Simonson

There are already enough tech hurdles and manpower associated with running the technology and creative. But programmatic ad buys often come with additional costs and fees, both transparent and hidden. And while some drawbacks can be alleviated by going through a third-party display network, which buy ad inventory from pretty much the same place, it’s still risky.

Just remember: When you lose transparency, you lose all control to optimize.

Evan Snively

Happy to see this as a topic as Maritz worked with HBS on the “Ads That Don’t Overstep” study. Definitely a key to note is that if there was already an established sense of trust between a consumer and the site they are on, then greater transparency was well-received and viewed more as a sign of mutual respect. As Tom calls out in the “Why Am I Seeing This Ad” study, the opposite reaction is very common when consumers don’t feel like they have that same relationship. The tricky part for businesses is knowing when they have entered the “friend-zone” (which is a good thing here!).

Doug Garnett
The backlash already exists as consumer dissatisfaction with advertising online is quite high. The trust studies of advertising types have shown this for years. But I don’t think the digital industry has allowed itself to hear this. In part, too many raise funding by continuing to use theories from the 2000s about how the web is “more trustworthy” and how “personalization” will make sure consumers only see ads that are meaningful to them. What the digital ad folks don’t see is how often “personal” means that the advertiser decides the consumer is personally interesting to the advertiser and continues to foist whatever ads make the ad server or the advertiser money. The question is: Will transparency change any of that? At core, consumers don’t want ads online. They are particularly more bothersome than ads on TV or radio or newspaper or magazine or outdoors. Transparency won’t fix that issue. We see this in the incredible struggle for sites like Pinterest, Instagram and Snap to discover advertising strategies despite having massive audience highly pleased with the… Read more »
Celeste C. Giampetro

Transparency is the right thing to do for digital advertising. Therefore it should be embraced no matter the consequences. Will consumers rise against the machines? Some may. How many consumers actually read the privacy policies on the sites they visit? I’d venture to guess very few. That doesn’t mean we as an industry shouldn’t embrace more relevant advertising and commit ourselves to substantially improving the consumer experience.

Ralph Jacobson

My experience in talking with brand marketers is that people generally ignore ads, especially ones that are irrelevant. Sure, the media highlights examples that inflame the psyche to boost ratings, however individuals generally don’t give a hoot. Surveys have been misleading, as respondents will report that they have privacy concerns, yet their actual behavior does not support those statements. The bigger issue is the fact that too many irrelevant ads still exist.

Lee Peterson

Transparency will DEFINITELY lead to a backlash. I think it will be more with Gen Z than Millennials, though (Boomers: impervious). You’ll see youth pushing back on the issues that us adults either are too locked in on or just plain UN-informed. Go kids, go, show us some common sense.

Brian Kelly
1 year 8 months ago
First, it’s not the apps that target. Its the advertiser who buys the audience the app promises it can deliver. As most journalists don’t buy advertising, they do not understand how this works. CA, Parscale (as agents) or any app did what it was supposed to do. It was the brand that bought the distribution to send its message that it targeted. Second, ads have always been targeted in some way. Of course in the past, the granularity was limited. However if one bought “Guns and Ammo” they hopefully didn’t reach many readers of “Vogue.” Business section ads didn’t run in the Arts/Entertainment section. And they typically didn’t want them, it was waste. Too much waste, and brands fired the agent. While CA converts to a new identity, it’s targeting principles are well established in all agencies. Both major and minor, Parscale was a small shop in Austin before it hit the big time with Trump’s POTUS campaign. I think the backlash comes from ads that are too intrusive or especially irrelevant. And this is… Read more »
Joel Rubinson

All surveys I have seen show that people do not like advertising. They do not like it on their TV, on the web, on their phone, etc. Yet they understand that is the cost of free media. People want relevant messages more than irrelevant ones, which is what precision targeting does. Most people do not understand that relevance comes from data. That is the marketing community’s job to convey this. Targeting will be very important in a GDPR future, but it will be based more on first party data that is fully permissioned. I think the only losers might be 3rd party data aggregators, but I’m sure they have lawyers working on this right now.

Kenneth Leung

Consumers give information to get something in return, either improved experience, financial compensation, or both to retailers. If the entity cannot demonstrate the value to the consumer, then the explanation and transparency makes it worse.

Ricardo Belmar
It’s not really about transparency as much as it is about how targeting practices are applied. I think most consumers are wise to the practices these days. Think of it this way — cross-site web tracking is akin to someone at the mall following you all day as you visit multiple stores then jumping out of the shadows and holding a “special offer” in front of your face for one of the stores you haven’t visited yet! If shopper sentiment towards this type of digital advertising is low, it’s just telling us that the experience delivered isn’t what shoppers want. How many times have we heard reports that shoppers will give up personal data if in exchange they get a truly better and worthy experience? We have to assume the industry just isn’t delivering that experience yet. Technology solutions will continue to try and improve this, inserting AI and other techniques into the mix. As long as there are advertisers willing to spend money on these techniques that they believe to deliver the right audience,… Read more »
Bill Hanifin
When trying to understand how consumers will react to a change in the level of transparency used by advertisers, or changes to the techniques being used to deliver ads online, I struggle as consumers themselves don’t behave consistently in how they give up their data to various parties online. Let me explain. Consumers sign EULA for software they purchase as well as use SSO to create accounts at e-commerce sites using their Google, Facebook or Twitter account information. It is safe to say that few of the EULA’s are read and that few consumers understand what they are giving away through their use of SSO. Over 4 million people have sent their DNA to Ancestry.com through the mail to an unknown place where “someone” analyzes their family origins and returns a report. These examples tell us that consumers will release more information than they realize they are sharing and do so without prejudice if they think they are receiving a worthwhile benefit. The standards consumers use to evaluate the use of their online behaviour by… Read more »
Mike Osorio

The rest of the world, particularly Asia, have already moved beyond these concerns and have largely determined a personalized experience is worth the occasional intrusion. I believe we are slower to transition to an acceptance of this reality due to two factors. First, unlike China and the rest of Asia, we have to decouple from a culture built on decades of landlines and PCs into a fully mobile mentality which they did not have to contend with. Second, our much more fragmented digital landscape vs. the near duopolies of Tencent and Alibaba make a cohesive and holistic feeling platform challenging.

In the end, however, I believe we will culturally migrate to a similar acceptance of a digital lifestyle with mostly first party data permissions driving our digital choices and ads.

Thomas Noyes
1 year 7 months ago

Digitally, every interaction you have with a consumer is a conversation. Brands must manage who gets to take part in these conversations and build insight from them. People interact and converse based on a level of trust and objective of conversation. While Big Data could create great new insights if we centralized and analyzed all conversations, there is a downside. Managing privacy and enabling transparency of how data is used can help to create trust.

"It’s pretty obvious to consumers how much they are being targeted and tracked. In fact, paranoia reigns …"
"Targeting will be very important in a GDPR future, but it will be based more on first party data that is fully permissioned."
"I would disclose more and take the high road. At the end of the day, retailers are not going to win by tricking consumers into making purchases."

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