DMN3 Blog

Americans don’t like the way advertisers use behavioral targeting for promotions or content according to a new survey released on September 30th.

Researchers at the University of Pennsylvania and University of California at Berkeley, surveyed individuals 18 and older who at least occasionally went online or used email. The study was about three types of organizations that carry out the latest strategies for behavioral targeting:

• Individual websites
• Online advertising networks, and
• Offline retailers

Behavioral targeting is using online and offline behaviors through Web site and store visitors to create market segments and connect them with relevant advertising, promotions and news content. Literally billions of consumer actions are stored in sophisticated databases by various companies that make them available to clients. Often, individual Web sites and retailers combine the behavioral information with demographic data to create an even more compelling profile of customer segments.

Americans don’t want organizations to track their online or offline behaviors and use that information for more advertising, discount and news tailored to them. The survey also uncovered the fact that Americans falsely assume that existing government regulations and privacy laws forbid the sale of this data.

They expect companies to take privacy rules extremely seriously and favor harsh punishment for those who violate their privacy.

You can find the full survey report here: Americans Reject Tailored Advertising.

Here is a link to a New York Times article about the survey results: Two-Thirds of Americans Object to Online Tracking.

Some key findings of the survey include:

• 66% do not want marketers to tailor advertisements to their interests. The percentage increases to between 73% and 86% when Americans learn how the data is gathered.
• The percentage rejecting tailored content basically stays the same when the data is gathered anonymously.
• A majority of Americans do not want discounts or news fashioned specifically for them, though the percentages are smaller than the proportion rejecting ads.
• 69% feel that there should be a law that gives people the right to know everything that a Web site knows about them.
• 92% agree there should be a law that requires “Web sites and advertising companies to delete all stored information about an individual, if requested to do so.”
• 63% believe that advertisers should be required by law to immediately delete information about their Internet activity.
• Over half of younger Americans say no to tailored advertising and news, but are more tolerant of tailored content than older Americans.
• The proportion of those rejecting tailored content increased when they learned that their behaviors would be tracked over multiple Web sites, not just the Web site they were visiting at the time.

It is apparent that Americans don’t trust the advertising industry on data collection and privacy issues. The lack of transparency about data collection and the lack of consumer control over the data collected are certainly contributing factors to the mistrust.

In February of this year the Federal Trade Commission published  Self Regulatory Principals For Online Behavioral Advertising a set of guidelines for organizations using behavioral data of Web users with the aim of behavioral targeting. The principles encourage transparency and customer control, security of customer data and the retention of customer data for a limited amount of time.

The results of self-regulating attempts by the online tracking and advertising industry have largely failed at providing the transparency and consumer control espoused by the FTC.  In an effort to head off increased regulation by the FTC and renewed efforts in Congress for privacy legislation, trade groups have come together to develop a self-regulation approach to this issue.

The Interactive Advertising Bureau and the Direct Marketing Association, worked alongside the American Association of Advertising Agencies, Association of National Advertisers, and the Better Business Bureau over nine months to devise strict guidelines for behavioral targeting. These guidelines will take effect in 2010 and members of participating trade groups will be monitored and there will be public disclosure of non-compliance.

This survey will provide clout to those working to increase transparency and consumer privacy in trade groups, the FTC and Congress. It will be interesting to see if the latest attempt at self regulation will succeed, given the depth of Americans’ feelings around this issue.