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BLOG: Is ad personalization a threat to privacy?

Leon Fayer | June 6, 2012
Last week, I was doing some research about my upcoming trip to Tanzania.

Perhaps the issue lies in the fact that online data collection goes far beyond what can be derived from the information available outside of it. The Internet allows users to seamlessly switch between different activities in single browser. Average users spend more and more time on the Internet watching movies, doing research, shopping, reading news and much more. Here is a breakdown for an average U.S. user, condensed into one hour.

  • More than 70 percent of users admitted to being influenced by personalized offering at least sometimes.
  • 78 percent of users expressed interest in personalized content.
  • 65 percent of women are receptive to offers that provide them products that they are interested in.
  • 88 percent of women indicated that they would like to receive tailored offerings from the brands they trust.
  • 39 percent of users indicate that they are more likely to click on an ad if it is personalized based upon their tastes and interests.
  • 58 percent of frequent shoppers --those who shop online at least several times a month ---are more likely to click on personalized ads.
  • 41 percent will pay more attention to advertising, based upon their interest.

All the activities listed provide valuable data points that can be correlated into a "user profile," and if analyzed properly, allowing very accurate assumptions about the products and services that will interest that particular user. Amazon can be considered a pioneer in creating their related products section, which enjoys a very high conversion rate, based upon users' past purchasing and browsing history. Facebook's targeted advertisements analyze user preferences, likes and comments to promote products and services to match that user's interests. And although these services provide valuable offerings, some people argue that online advertising is unnecessary, and ads diminish the value of the content or service that companies provide, because they distract from, or are irrelevant to, the main content.

[Drive-by download attack on Facebook used malicious ads]

Internet advertising has to exist in order for companies to provide free, quality content. This is an axiom. In order for the advertisement to be effective and attract customers, it must be relevant. In order for marketing to be relevant, appropriate messaging must be communicated to the target audience. And, in order to assemble an appropriate message, a company must know the audience being targeted.

There are two types of targeted advertisements that have been adopted on the web: contextual and behavioral. Contextual ads market products based upon the content that is being presented to the user. For example, if a visitor is looking at user-submitted images on National Geographic My Shot, presenting an ad for Nikon camera would probably yield a higher click through rate than a generic "You have been selected to win an iPod" ad, that so many people have come to hate, as this approach assumes that people viewing the content on this particular page would be uniformly interested in a random product.

 

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