Will greater transparency drive a digital targeting backlash?


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.
- Ads That Don’t Overstep – Harvard Business Review
- Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness – Journal of Consumer Research
- Online Ad Targeting Does Work — As Long As It’s Not Creepy – Wired
- You Can’t Handle The Truth About Facebook Ads, New Harvard Study Shows – The Intercept
- Why being more transparent about data may make your ads more effective – Digital Context Next
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?
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18 Comments on "Will greater transparency drive a digital targeting backlash?"
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Managing Partner, Advanced Simulations
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.
Strategy Architect – Digital Place-based Media
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.
Co-founder, RSR Research
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 …
President, b2b Solutions, LLC
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.
President, The Ian Percy Corporation
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!
CEO & Co-Founder, Metric Digital
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.
Director of Planning & Loyalty, Moosylvania
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!).
President, Protonik
VP Marketing, PebblePost
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.
Global Retail & CPG Sales Strategist, IBM
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.
EVP Thought Leadership, Marketing, WD Partners
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.
President, Rubinson Partners, Inc.
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.
Retail and Customer Experience Expert
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.
Retail Transformation Thought Leader, Advisor, & Strategist
CEO, Hanifin Loyalty LLC
Vice President Retail, Tori Richard Principal, Osorio Group LLC, dba JAM with Mike®
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.
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.