Opinion: The pull of privacy

Facebook last month released a much anticipated feature called Custom Audiences, which now allows marketers to upload their own customer lists and target them within Facebook by matching email address, mobile number or other unique ID. This puts display ad retargetting into the hands of all marketers without making them go through third parties like Bluekai and other ad networks. So far, regulatory noise around the introduction of this new feature has been relatively absent. Facebook encrypts data as it's uploaded, ensuring it can't use the data for its own purposes, so privacy advocates have remained relatively calm. But as Online Behavioural Advertising (OBA) and retargetting methods increase, how will consumers respond?


If you ask consumers the direct question, more than 60 per cent say they find the notion of retargetting creepy, despite recognising the benefits of increased advertising relevance. Currently, only 15 per cent of all online advertising uses online behaviour (tracking data) for retargetting. Contextual ads, which use aggregated demographic and lifestyle data based on the average readership, are much easier and cheaper to implement. So despite generating higher clickthrough rates and commanding higher CPM, the significantly smaller audiences available through retargetting translate to lower revenues for content providers. This probably explains why publishers like The Wall Street Journal and The New York Times support the 'Do Not Track' initiative. 


Around the globe, industry bodies like the DMA are escalating the conflict with privacy advocates by claiming that eliminating consumer data collection has the potential to 'kill the Internet'. Recognising a general privacy discontent in consumers, the Digital Advertising Alliance, which represents 85 per cent of online behavioural advertisers, has championed industry self-regulation of the Do Not Track initiative. But I'm guessing that most consumers are not aware that compliance with the initiative means allowing consumers to opt-out of receiving targetted ads, but still allows their data to be collected and sold to third parties. 


Researchers at Carnegie Mellon University recently published the findings of an extensive consumer study regarding knowledge of and attitudes toward OBA. Consumers understand that advertising pays for content, and are willing to make this trade. But they don't accept that giving up their data is part of the deal. There is significant misunderstanding of how OBA works, and what controls are available to consumers. Most people think they need to delete their cookies on a regular basis to prevent tracking, not realising that this will actually remove their opt-out information. Most don't know how to configure their browser settings to prevent tracking. Nor should consumers need to understand how tracking works—be it cookies, browser fingerprints or other trade secrets. Consumers don't understand the role of third parties and ad networks, which creates a disconnect between their mental model of OBA and the methods of control they have available to them. And they have no idea what the 'Ad Choices' icon in the top right corner of a targetted ad means; many are scared to click on it. 


Context and trust are two of the most significant factors impacting consumers' willingness to disclose their data. Sharing your penchant for fine Cuban cigars with a luxury goods retailer is sigificantly different from sharing with your health insurance provider. Many consumers are willing to share their data with trusted brands like Microsoft, Google and Yahoo, but for the wrong reasons. They are largely unaware that these behemoths use the data to operate ad networks outside their own properties and products. 


This lack of transparency and education plays right into the hands of privacy advocates, who say that industry players can't be trusted with consumer data. It's time to stop thinking of this battle as a legal one, and change the dialogue with consumers to one about value exchange. Consumers understand there is a trade-off between providing data for increased ad relevance, receiving loyalty benefits and great deals, versus the potential for a future privacy violation. As a default, people don't like having their behaviour tracked when they have no control over its usage and feel they're getting the raw end of the deal. The answer lies not in legal or technical circumvention of their concerns, but directly addressing them in the form of returned value. 


Consumer concern goes beyond rational fears that their data will be on-sold and misused by third parties they don't trust. The industry must deal with the reality that behavioural tracking gives most people the creeps. Evolutionary psychologists argue that underlying every human emotion is a real need and a behavioural adaptation that evolved to help us survive. For most of history, humans have lived in tightly knit tribes and clans, with little to no privacy. Our brains are wired to cherish privacy as a rare moment, a time to reflect and learn and perhaps not have to respond to the needs of others. According to Zuckerberg, this digital life may be rewiring our subconscious need for privacy. But whilst most internet users today still remember life before Netscape, consumer confusion and a lack of trust of advertisers and publishers is as likely to ruin this industry as government regulation.