Data privacy vs relevant targeting in consumer marketing

Are today’s consumers more interested in maintaining privacy when it comes to their data or in receiving more targeted, relevant marketing?

Key Takeaway

Consumers are growing increasingly wary of hyper-targeted ads – think of those times when an ad for a product you happen to be staring at in person suddenly appears in your Instagram feed. Now that we have the ability to hyper-target customers thanks to the massive amount of data available at our fingertips, is this something consumers want, or do they value their data privacy more?

recent study from Adobe Digital Insights indicated that the majority of US internet users – particularly among the younger/millennial set – agree that ads are becoming more relevant.

Thanks to an explosion of online breadcrumbs we’re leaving behind, and tools to help executives discover insights and sort through all of that data, marketers are able to deliver highly targeted ads that appear at the most opportune moments.

For many, ads serving up relevant products are absolutely preferred to the alternative. However, the question is at what cost? Are consumers willing to trade their personal data for a more relevant marketing experience?

Amid the ever-growing Facebook data controversy, Reuter’s together with Ipsos conducted a poll which determined fewer than half of Americans currently trust Facebook with their personal information. This may not be surprising given recent events, but what is striking are the insights discovered around their advertising practices – the main source of Facebook’s income.

“63 percent of those surveyed said they would like to see ‘less targeted advertising’ in the future, while 9 percent said they wanted more. When asked to compare them with traditional forms of advertising, 41 percent said targeted ads are ‘worse’ while 21 percent said they are ‘better.’”

In case you missed it, Facebook’s shares fell 14% last week.

Some insights from the survey indicated that consumers’ dissent was more about the context in which the ads are presented. On Amazon, for instance, customers are there to shop. They’re less bothered about targeted ads in a setting which is designed for browsing products than they are when they’re on Facebook, which is designed for them to engage in personal conversations with their friends and family.

Who should be responsible for regulating this data privacy? 46 percent of adults said they want to see more government regulation.

Erring on the side of caution

Harvard Business Review study from 2016 highlighted 3 areas of psychological concern for marketers when it comes to behavioral targeting:

Targeting may change how consumers see themselves and make them feel like they already have traits implied by the ads

Competitors may benefit if targeting strengthens a trait that can be expressed by purchasing from similar brands

Positive effects of behaviorally targeted ads only occur when consumers know that they’ve been targeted: transparency is key

There is a subtle difference highlighted in each of these warnings: the presence of consumer knowledge or consent. As data privacy remains at the center of global conversations, it’s becoming increasingly vital that brands understand the insights they’re getting from their data. A big part of that is understanding the assumptions behind the algorithms used to produce those insights.

Consumer choice and data sharing

It’s not that consumers don’t want relevant marketing. It’s that many prefer to actively make the decision to share their data in order to get those targeted ads.

Steve Olenski writes in Forbes that marketers must remember “customers are willing to share their information if they know you are using it to help them get what they want while ensuring that the information is kept secure.”

He references a study from Columbia on the future of data sharing which indicates 4 consumer mindsets: defenders who guard their data carefully, those who will share it with select parties and protect it from others, those who have resigned to the fact that they have to share it and those who are not bothered either way.

Essentially it comes down to trust and individual users’ level of comfort with data-sharing. What this poses is an extra psychological layer marketers may potentially need to analyze. While data defenders may be put off by an ad recommending precisely the product they’re looking for at the right time, those unbothered by data sharing may in fact find it useful. The trick will be determining under which category a particular user falls.

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