Behavioral advertising, the anonymous or pseudonymous tracking of online activities for purposes of providing more targeted advertising and content, promises great potential for advertisers and publishers to build more relevant and trusting experiences for their users. But if you are thinking about using social or behavioral advertising because traditional display and email are yielding deplorably low response rates - don’t cross that fine line between creeping in and creeping out. Currently, consumers are unhappy with behavioral targeting practices, and now legislatures are getting involved. The New York State Assembly has plans to impose legal restrictions on the ways in which personal data is collected and used.

In line with the proposed New York State bill, a recent consumer poll conducted by TRUSTe and TNS Global indicates consumer demand for more transparency and user control around behavioral targeting. The survey provides insight into how marketers can make behavioral targeting more welcoming from a consumer perspective. Finding the right balance between wowing customers with superior customization and simply freaking them out will preserve consumer trust and help prevent state and federal legislation from curtailing your marketing plans for 2008.
Much of the evidence collected in the TRUSTe and TNS survey points to a consumer demand for more customized online ads and for an end to irrelevant, untargeted ads most commonly observed today.
• 87 percent reveal that fewer than 25 percent of the ads they see today are of any relevance.
• 72 percent of consumers find online advertising to be intrusive and annoying when ads are irrelevant to their interests.
• 64 percent say they would prefer to see only ads from online stores and brands they know and trust.
• 55 percent would be willing to fill out an anonymous survey about products, services, and brands they purchase in order to limit the online ads they see to those indicated in the survey.

But, according to survey results, two main obstacles threaten the promise of behavioral targeting: 1) the lack of consumer education and understanding, and 2) the lack of transparency and affirmative choice. Consumers indicate a high level of apprehension when it comes to tracking their browsing history and express little familiarity with the term “behavioral targeting.”
• 57 percent of survey respondents say they are uncomfortable with advertisers using their browsing history to provide relevant ads
• Only 40 percent of respondents are familiar with the term “behavioral targeting.”

While advertising based on anonymous information should be embraced by privacy sensitive individuals, there is still significant unease with behavioral techniques. This is not surprising when consumers are familiar with privacy mishaps such as the AOL search data disclosure, which allowed researchers to piece together several pieces of anonymous information to positively identify an individual. Seventy one percent of consumers said they were uncomfortable with third parties tracking their behavior for purposes of serving ads even when it couldn’t be tied with any PII.

Behavioral Advertising Dos and Don’ts

DO
- Matter-of-factly incorporate some disclosure of tracking and targeting as part of your product or service value proposition. Provide a “what is this” button to explain how your customization works.
- Make sure your service providers, agencies, and others are following industry standards for privacy notice and disclosure. The majority of serious complaints TRUSTe encounters are privacy breaches by marketing vendors.

DON’T
- Think you can get away with not giving your customers notice and choice. See Cathryn Harris v. Blockbuster.
- Undermine your investment in building your brand for a few response points. (more…)

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