99% of users are irritated by personalized adverts shown at inappropriate times. That’s why many companies no longer consider targeted advertising to be the magic wand it was just a few years ago.
You’ve been there. Not once, not twice, not even thrice. It’s Monday morning and you are just back from a city break to Stockholm with no time to waste - there’s work to be done. So you turn on the computer and see… what? That’s right, dozens of haunting banners displaying a wide variety of Stockholm hotels and restaurants. “Oh, Google, I don’t need these anymore!” you mutter, trying not to notice the ads.
The next day brings more trouble when your coffee machine breaks. As the prospect of spending days without the black stuff seems horrifying, you order a new one at once. But the web is not done with you yet. Your newsfeed turns into a catalogue of all imaginable coffee machines and accessories for the whole week, maybe more.
At first, it seemed as though targeted advertising was the answer to everyone’s prayers. No more DIY ads for teenagers or private tutor ads for retirees – only relevant offers based on previous choices and queries. However, over time, commercial brands realized that targeted advertising was rather tiresome. Moreover, it made consumers feel watched, another step forward in Big Brother society. This problem gave rise to a momentous question – whether the obvious benefits are equal to the potential risks.
How transparency could be the key to overcoming scepticism
A recent study conducted at the University of Illinois found that they are not. An advertising professor, Dr. Chang-Dae Ham, surveyed 442 students on how they respond to so called “online behavioural advertisement” (OBA). The results showed that most of the college-age individuals have privacy concerns and simply use ad-blockers. They also think that OBAs restrict users’ freedom to choose content.
Dr. Ham’s findings represent a challenge to the advertising industry, as older age groups are even more concerned about privacy and control than youngsters of the age surveyed. It means the number of people installing ad blockers will gradually grow over time. Given that last year the use of such software rose by 30% worldwide, some 11% of the global web population (according to PageFair), the advertisers have a lot to reflect on.
One of the most important aspects for consideration is transparency. Chang-Dae Ham found that participants with a better understanding of ad-targeting mechanisms are more open to personalized online advertising despite its privacy risks. For that reason, Dr. Ham suggests that advertisers should be more open about the process, so that users would be able to easily control targeting instead of fearing it. The professor said that “they need to educate consumers, they need to clearly disclose how they track consumers’ behaviour and how they deliver more-relevant ad messages to them”.
The Great Escape
Some of the world’s biggest brands seem to share Dr Ham’s opinion. For example, both Procter & Gamble and Unilever have been demanding more transparency from digital media for years, even threatening to reduce their online ad spending unless the landscape is improved. Since nothing had changed, the major advertisers decided to keep their promise.
MediaRadar reports that P&G's digital ad budget dropped 41% year-on-year. In 2017 their annual advertising expenditure fell to an 11-year low. Unilever’s spending even topped that, dropping 59%. Both companies have also cut up the number of websites they advertise on. This year Procter & Gamble declined 33% of sites, while Unilever refused to feature their products on 11% of online platforms. In addition, each of these companies has reduced spending on websites that have been a platform for their adverts for years. These include Yahoo, Time, BuzzFeed, Reuters, and NBC News to name just five.
A return to mass marketing
According to Ben Kunz from media agency Mediassociates, consumer goods giants like P&G and Unilever who own various household brands – from Axe to Ariel - may shift back to mass advertising. TV is ‘tried and tested’ compared to the relatively young digital hyper-targeting, and it can be just as effective when selling mass-market products to the public at large. Therefore, the online ad industry that now makes $72 billion per year might soon find that it is far from being the dominant force in global marketing.