Tech Law: Marketers should reconsider targeted online ads
by Paul Jacobson (@pauljacobson) Conventional wisdom in the marketing industry seems to be that better targeted ads are more effective. It makes sense. If you can present an ad to a consumer whom you believe is actually interested in your services, surely that consumer will be more inclined to purchase from you?
A prominent example of this thinking in action is Facebook, where ads are customised based on your Facebook activity and profile data. If you start posting about your love for sushi and share that love in your profile, you can be sure you will soon see ads for sushi products and restaurants alongside your News Feed.
One prominent advocate for better ad targeting is Jeff Jarvis, a prolific writer and journalism professor based in New York. Jarvis has long argued for the benefits of better ad targeting to improve the quality of the ads that power the many services you use each day.
Jarvis recently wrote a post titled “Unoriginal sin” on his blog, Buzzmachine, where he argued for more transparency when better targeting ads. He describes part of the problem with current ad targeting methods:
“That is because advertising is still bought the way it is on billboards, TV, and pulp — on volume, by the thousands, by the eyeball-ton — so that marketers can just keep shoving their unwanted messages at us.
“When those advertisers do smarten up a little they start to target, but they do that dumbly, too. Here’s the second stupidity. The advertisers — and their serpents: agencies and media and technology companies — creep out their own customers by collecting data on them without being open about it, without revealing the reason and the benefits (free content! less noise!), without giving them any control over the data, and then by following us all around the web haunting us with that stupid pair of boots we looked at on Amazon once.”
Go the other way
If anything, Jarvis argues for better, more-informed targeting models, but what if marketers went the other way instead and didn’t use more than superficial personal information for their ad targeting?
I recently had an interesting discussion with Adam Oxford, editor of tech news site htxt.africa, about the benefits of not targeting ads. Our discussion touched upon a couple things I have been thinking about in the context of privacy and marketing which are worth considering.
To begin with, when you only target ads based on consumers’ personal information, you’re creating a sort of confirmation bias and your consumers remain oblivious to all the other options that may appeal to them, were they aware of them. It is a similar argument for not having consent-based mobile marketing which a client once put to me.
He argued that if his company were limited to only marketing to consumers who specifically opted in to receive marketing communications from his clients, they would likely never discover a range of products and services that may add tremendous value to their lives.
Reinforces existing without exposure to alternatives
The problem with a strict opt-in model is that it reinforces your existing preferences without exposing you to alternatives.
Fortunately, the Protection of Personal Information (PoPI) Act allows marketers to introduce themselves to new potential customers using a one-time information message inviting them to opt-in to further marketing communications. The act also implies consent based upon an existing relationship with a consumer, provided the consumer is given opportunities to opt out at various stages.
Another argument against targeted ads is that it may give marketers an option to circumvent the PoPI Act altogether. This is appealing from the perspective of being able to avoid the anticipated monetary and resource cost of complying with the act if this isn’t necessary. The reason that this may be possible is because “personal information” is defined as “information relating to an identifiable, living, natural person, and where it is applicable, an identifiable, existing juristic person…”
PoPI may not apply
The act regulates “the processing of personal information”. If a marketer is not processing personal information, the act may not apply.
Of course, unless a marketer delivers its products using some sort of anonymous collection point and receives payment solely in cash or Bitcoin, this isn’t going to be a complete answer, but what if the initial enticement weren’t dependent upon targeted ads which leverage personal information of some kind?
What if marketers took a few steps back and advertised their clients’ products and services in more generic terms, exposing consumers to new products and services in the process?
For one thing, these marketers may not require consent to market to these consumers because they wouldn’t be using personal information. Sure, they may begin processing personal information when a consumer responds to an ad but consent is easier to manage in that context.
In the meantime, marketers expand the possible choices available to consumers and sidestep the common “technopanic” that occurs when consumers are surprised by unexpected uses of their personal information for marketing purposes.
But at what cost?
So, yes, targeted ads have proven to be pretty effective and lucrative for the brands that use them — but at what cost? Perhaps brands should consider not targeting their ads again?
Paul Jacobson (@pauljacobson) is the founder and director of Web•Tech•Law. He contributes the regular “Tech Law” column focusing on issues in the digital marketing space to MarkLives.com. CC BY-SA 2.5
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