Modern marketers today have a selection of tools to help spread their wings through the Internet, thanks to one straightforward development – digital data. Customers willingly share their data online when they feel secure, enabling seasoned marketers to utilize web cookies to gain unmatched insights into consumer behavior. This, in turn, empowers them to devise customized solutions that align with individual needs.
Research studies indicate a marked improvement in responses to ads through digital targeting based on access to consumer data. In contrast, with limited access to such critical data, the ad performance declines significantly. A word of caution to marketers: do not use online surveillance to market products as it may lead to adverse consumer reactions. Many countries have put regulations in place requiring that marketing companies disclose the source of their consumers’ personal information.
With market dynamics changing and increased consumer awareness, what is the status of targeted ads? There is no doubt that consumer awareness enhances ad performance as customers buying products feel the ads are personally relevant to them. If the consumer is not concerned about privacy, they will not object to using surveillance tools and tracking cookies.
We trust this blog will help marketers understand why consumers do not like being targeted, and how they can use personalization without breaching people’s privacy.
The Privacy Puzzle
When it comes to privacy, people can be unpredictable and lose all sense of logic. Surprisingly, people do not mind sharing intimate details with strangers but keep quite a few secrets from their dearest ones. However, social scientists have toiled relentlessly to identify critical factors to help predict people’s reactions when their personal information is used.
One such factor is startling, yet simple; the type of information used. The more intimate the details (sexual preferences, health issues, financial information, etc) the less the chances that people are comfortable with others knowing such details.
The second is a more subtle factor, involving how personal details are passed on – in other words, “information flows,” as often referred to by social scientists. It is common knowledge that most people do not like anyone talking behind their backs. While the same people may be OK with sharing personal information directly (first-person sharing), they turn edgy when the same information is passed surreptitiously (third-party sharing).
Research studies indicate that these sharing norms are very much applicable in the digital space. People may not be comfortable with ads appearing while they browse a website, especially if such ads seek personal information. It is more like talking behind a person’s back. They prefer more transparency in such ads, however, if norms were violated while garnering “information flows,” the ad transparency could very well backfire, defeating the very purpose of the ad.
The same yardstick applies when analytics is used to deduce someone’s personal information. It is not just about personal information being shared; it is more about how it is shared. If people do not like the way their personal information is shared, the purchase interest declines.
Three Factors Impacting Targeted Ads
Trust is paramount, and advertisers anticipating targeting backlash swear by ad transparency, which they willingly offer. Most marketers and advertisers do not forget to display Google’s AdChoices icon, which it claims is an industry standard. The blue-colored icon indicates that the ad is customized based on the user’s characteristics. People are at liberty to click on the icon to understand why it is being displayed.
Such voluntary disclosures are beneficial for the advertisers provided the customers trust the website they are browsing. People are receptive to trust and do not mind ads appearing on a trusted website. When the trust is extremely high, it may enhance the click-through rate (CTR), leading to conversions.
People like to reign as sovereign, in other words, they always like to be in control when it comes to privacy. While they may be OK with sharing personal information with a particular entity, they may fret about their inability to control others gaining access to the information, and how it could be used.
People want to have absolute control over personal data available online, where long-drawn-out, and multilayered data collection is the norm. Data brokers are on the prowl, looking for personal information from social media platforms, e-commerce sites, loyalty programs, etc. With targeted advertising turning more refined and specific, consumers’ concern about their privacy being compromised is growing. The only answer lies in allowing people to have total control over their personal information, leading to enhanced ad performance.
Once users understand why their data helps generate ads, they will understand how targeted ads work. There is nothing personal about it, though. For instance, if a company wishes to introduce a service in an area where it is not available currently, it may want to know the physical location of the customers. However, if an advertiser tries to get such information without explaining why it is sought, the whole exercise is likely to backfire. Such justification of purpose is taken well by customers who appreciate it. However, the reason should be good enough and convincing.
Guidelines for Ad Creators
When it comes to personalizing ads, the customers’ experience could either be harrowing or delightful. With a thin line differentiating both, most advertisers are prone to taking the short route by keeping customers unaware of what is happening. But that could be your undoing because such misguided tactics rarely work. It is better to be straightforward and let the customer know what is happening.
Here are some quick tips for ad creators:
Do not Touch Upon Sensitive Information
Advertisers should refrain from talking about a person’s sexual orientation, health condition, and other such sensitive issues. Google and Facebook have strict guidelines regarding targeting customers based on personal attributes, including race, ethnicity, religion, beliefs, age, sexual orientation, etc.
Just as there is a “slip between the cup and the lip”, there lies a huge gap between concealment and full disclosure. Whenever a customer demands it, advertisers must readily provide information about data usage practices. The disclosures must be straightforward, granting quick access to customers. Displaying the AdChoices icon is one of the best ways of keeping customers’ interests at heart. They can click on the icon to find out why they see a particular ad and opt-out if they think it is irrelevant.
Use Data Prudently
Although data collection may present several avenues through customer insights and advertiser gains, it is prudent to practice restraint. An advertisement should never be intrusive. Also, using personal information inappropriately is not appreciated by customers. However, if customers are delighted by an ad, the chances are high that they will recommend the product to friends and family.
Show Proper Grounds for Data Collection
Before collecting personal information, advertisers must explain why they are doing so. They should also explain how such information is used to generate relevant ads. Most customers may not be aware of how a piece of personal information is used to customize ads.
Collect data the traditional way
It is better to collect data in the traditional, though old-fashioned way. Not using digital surveillance is a smart move advertisers must keep in mind. It pays to conduct online surveys to identify customer behavior and preferences. Such approaches instill confidence in customers who believe there is nothing in them to make them feel invasive. Although it may be more expensive to collect data the traditional way, it keeps the customer contented. It pays advertisers to take the cue from Google and Facebook; they leave it to the customers to decide how they wish to be targeted.
People’s responses to ad targeting and data collection online are still an enigma. It baffles advertisers how customers will react in a particular situation. It is better to make ad targeting customer-centric because customers appreciate it when advertisers are upfront about their intentions.
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