Is the use of data to target consumers backfiring in the digital industry?

Posted on: Wednesday 04 May 2016 | Helen Southgate

Helen Southgate, MD at affilinet UK, talks about the use of targeting versus data privacy and how this could have negative consequences for the consumer.

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The digital industry constantly changes and redefines itself; it has to in order to survive.  The role of technology has and will continue to disrupt the market and lead it in new directions. 

With digital advertising, we have progressed significantly over the last few years to use data much more effectively to target customers. We do this by profiling customers based on their behaviours. This is not just online; the tactic is becoming widespread via the old-school advertising platform, television, through innovations such as Sky Smart Ads and Channel 4’s Premium Video Xchange. So it’s clear that, if done well, it works. 

But I wonder whether, within all this improvement in targeting and technology, as a digital industry we have perhaps not given enough respect to consumer experience and choice. Data privacy and transparency is one of the reasons why affilinet launched AdChoices across all of its banner inventory very recently, the first affiliate marketing network in the UK to do so. We felt that, as we delve further into the realms of behavioural targeting in the affiliate channel, we should also ensure there is transparency and choice for customers. AdChoices allows consumers to see how their data is being used and opt-out of Online Behavioural Advertising if they wish. By implementing this across our platform it helps publishers ensure they are also participating in best practice. 

Targeting in advertising should benefit all parties if done well – including the consumer- but if it’s executed incorrectly then it can backfire quite spectacularly, as we are starting to see now with Ad Blocking reaching the mainstream (the IAB recently reported that a staggering 22% of all online adults are using ad blocking software). Targeted advertising should make it more cost effective, but I worry that has led to increased advertising, diminished creativity and respect for the consumer experience. I recently installed an ad blocker for research and in just one day I had blocked over 800 ads, which in my opinion is excessive. 

The IAB has launched its LEAN principles, which I think is a positive step in the right direction to provide best practice guidance on how advertising should be implemented online. The bigger challenge however will be how to self-regulate this and ensure that all corners of the industry participate. We must listen and respect consumers and not simply blame Ad Blockers, as they are just a symptom of the central problem. We must also remember the power of consumers; consider recent disruptive technologies in the market, such as Uber, Spotify and Airbnb. They are all supported by consumers as they serve a function which is to fill a need or fix a problem. Ad Blocking is the same and is not going away anytime soon. Being transparent, respectful and giving consumers choice, I think, are key to long term harmony between advertising and consumers. 

Written by

Helen Southgate

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