As the online advertising industry searches for ways to ensure consumer privacy protection while maintaining the integrity of its business, most are advocating for self-regulation as the ideal option. Ideally, the people with the knowledge and technology resources to develop real-world functional solutions will be the ones in charge of implementing them. Many ideas and best practices have been put forward for consideration, but to put consumers' best interests first, we have to gain an accurate, complete picture of what they want and need, not only in theory, but in practice as well.
Although there has been extensive research on consumers' attitudes toward targeted advertising, we have an incomplete view of how consumers feel in the real-world context of how they use the internet and interact with online advertising on a day-to-day basis. Past research efforts have largely employed single-option (yes or no) questions, which do not offer a well-rounded view of nuances and consequences associated with each option. For example, if someone asks, "Do you want to make more money, yes or no?" most would answer yes. However, if you ask, "Do you want to make more money if the trade-off is working 80 hours per week with an increased stress level?" the answers might be different.
To understand consumers' real preferences toward online advertising, survey questions must be framed within a behavioral economic context of real-world, value-for-value trade-offs. To conduct a survey of consumer opinions on targeted advertising, PreferenceCentral asked questions in a manner that offered the appropriate context, which, in turn, delivered a different outlook from previous studies. Contrary to prior research, PreferenceCentral's consumer survey found that a majority of consumers do prefer targeted, relevant advertising in exchange for continued access to free content online.
Preferences shift up and down in the context of different real-world scenarios. When provided with education on behavioral targeting, consumers became less comfortable sharing their data with advertisers; the majority preferred limited access to free content with untargeted ads. However, when assured that data collected about them online was totally anonymous, 35 percent of respondents became more comfortable with sharing that information.
In another scenario in which consumers were offered a consumer-control solution that would allow them to have more control over the ads they see and those they don't see, 70 percent of respondents said they would be interested in providing advertisers with their preferences on a granular brand and product category-specific level. Additionally, 41 percent of consumers became more comfortable with behavioral targeting in general and were 27 percent more willing to receive targeted, relevant ads in exchange for free content if they were given a control solution.
For the advertising industry, it's not enough to just educate consumers on targeted advertising; we must also provide meaningful choice and control over their online ad experience. When we allow consumers to tell us exactly what they want on the brand and product-specific level -- and we can glean from these survey results that they are willing to use such a solution -- we reduce wasted ad impressions and ensure our messages are reaching only the consumers who are going to be the most receptive and interested in what we have to offer.
For online publishers, these results mean that they should be offering multiple content-access models to optimize appeal and monetization. This will allow those who are concerned about behavioral targeting to feel more comfortable when browsing the web and gradually open up to data sharing on their own terms in exchange for access to more content.
In this regard, the Network Advertising Initiative recently released its own research that shows behaviorally targeted ads are more than twice as valuable in terms of prices advertisers pay and more than twice as effective in converting consumers who click on ads into buyers than normal run-of-network ads. With such strong value tied to behavioral targeting, it is crucial to obtain and understand a more complete view of consumers' perspectives on online advertising.
Maintaining true consumer engagement through relevant messaging, and the viability of the ad-supported model as a whole, will depend on the industry taking extra steps to provide consumers with a foundation of knowledge of targeting before asking for their feedback. It is crucial that the industry reinforces the reality of the trade-off between sharing data and access to free, quality content, as well as the assurance and enforceability of data anonymity. To further improve this relationship, the industry must offer consumers a solution by which to control their experience and then comply with those preferences.
Our approach to meeting consumers' privacy demands has thus far been somewhat limited in not only how we respond to the answers, but also by how we ask the questions. When evaluating solutions, we tend to presuppose that consumers don't like targeting because they feel it is invasive, but given a bit of context, consumer response could be more favorable. The insights uncovered in the PreferenceCentral survey can drastically impact decision making and best practices for both advertisers and publishers, and, in turn, maximize value for consumers. Combined with past studies, we now have a well-rounded, complete view of what consumers want from their ad experiences online and can take the steps to a more mutually beneficial experience.
Dr. Karl Lendenmann is the vice president of marketing and analytics for Datran Media, parent company of PreferenceCentral.
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