Privacy has emerged as a dominant topic of debate among digital marketers this year. Consumer watchdog groups are clamoring for new protective measures. The U.S. government, including the Federal Trade Commission, is considering regulating advertising methods and practices. Advertisers are taking proactive measures to self-regulate their behaviors in hopes of lessening any regulatory impact.
Why the commotion? What has sparked such concern? More personalized, behaviorally based advertisements.
Growth In Targeted Advertising
As traditional banner and display ads continue to decline in performance, advertisers are turning to new methods to increase ad relevancy, such as behavioral targeted ads. These ads are based much more on specific user actions, such as site history, browsing history, and buying behavior. Coupling together these known behaviors, advertisers can deliver more relevant ads. Many people are seeing a tremendous increase in the appearance of behavioral ads--some with ads and recommendations crossing the border from relevant to intrusive. This, in turn, is giving rise to the concern that everything they do online is being tracked.
The debate gets tricky here. Are people really concerned about being tracked--or are they really more concerned that someone has access to personal data, which can be compromised? Is this any different than the old catalog vendors sending you junk mail based on past purchases? Truth is, people are much more worried about the security of their personal information than they are about their browsing history. This is true in almost every facet of consumer behavior.
For example, look at how grocery stores interact with their customers. Grocery stores and their suppliers constantly seek ways to improve what they stock, where they place items, and how they are priced, all to improve the average customer sale. To do this, they need data. Rich customer data. Customers, looking for better prices and more relevant items, are willing to trade their data in return for discounts. Enter the loyalty card. Everyone from the grocery store to restaurant chain is hawking loyalty cards to entice users to share data. For the price of their buying data, customers are given discounts, free food, and other rewards. But this is based on trust--trust that merchants and their partners will protect the consumer. Protect their credit cards, protect their IDs from being stolen. Even protect their cars in the parking lot.
Online, it's really not any different. Consumers are aware of their data's value and have shown a willingness to trade it for better service and better prices. Subscription content and user-based sites are growing dramatically as advertisers trade content for context. But it's even more critical that online data be protected. It is no longer just what you bought at the grocery store, but what sites you browsed, what you registered for, and who you are friends with. The real issue for consumers: What are businesses doing to protect their online data? Every time a retailer loses credit card data or Facebook accidentally shares your data with their partners, consumer privacy concerns are raised.
Unfortunately, many groups can't seem to differentiate between privacy and security--which leads us to the debate today over regulation and rights. Imagine what would happen if users had to opt-in to all sites that track or display ads, and there was no browsing history available for advertisers? Here are a few possibilities:
- All valuable content will end up secure--and each user would have to accept terms before viewing content. No more checking ESPN for scores; people would have log in to get the most basic content. Forget a quick check of the weather. Time to opt-in first. The Web would slow to a crawl.
- Ads would be force-fed and longer. Users would be subjected to longer ads or videos prior to accessing content, similar to the never-ending previews at a movie theater.
- The cable TV model would come to online. As advertisers have to cast a wider net to reach broader audiences without rich targeting, their costs will go up. Users would be forced to pay a premium for information to help subsidize the increase in costs for advertising. Essentially, this will create cable channels for online content.
It's time to focus on what is at the heart of most user concerns: keeping the Web and digital interactions safe and secure. Protect credit card data better? Sure. Restrict sites for younger audiences? Absolutely. But when it comes to behaviors and advertising, let people decide how much they want to share and what they are willing to trade for their information.
Read Andrea Fishman's previous article, "Diminishing Returns: 5 Targeting Traps."