New research has revealed a shocking level of distrust among Australian consumers for how online retailers, social media sites and financial and government institutions use their personal data, with many saying they do not want to be tracked online to be served targeted advertising.
The online Newspoll survey of more than 1,200 Australians aged 18 to 64 found while the majority of consumers were aware their browsing behaviour was being tracked, only four in 10 would prefer to see online advertising for products or services specifically related to their interests, and only 32% said they were comfortable with their browsing behaviour being used for the purposes of targeted advertising.
Seventy percent said they trust financial and government institutions to protect their personal information, but that dropped to 56% when it came to retailers, and just 30% said they trust social media sites. Older people were on the whole more distrusting – only 27% of 35 to 49-year-olds and 15% of 50 to 64-year-olds trust social networking sites such as Facebook and Twitter, compared with 42% of 18 to 34-year-olds.
Newspoll chief executive Martin O’Shannessy said the findings indicated it was the end of the “Wild West” era in online advertising, with consumers becoming more aware of issues around data and privacy. “I think the sheriff is in town and looking to put a posse together, as people become aware of this and express concern,” he said.
“Advertisers are being offered the proposition that this highly targeted advertising is more effective, and in many ways it is, but people have started thinking now about data privacy. What we’ve sought to do is test the propositions that if people are thinking about this issue, are they prepared to pay the price [for more relevant advertising], and how do they feel about the people collecting the data?”
Targeting works
ADMA recently overhauled its Code of Practice for members ahead of major changes to the Privacy Act due next March, with chief executive Jodie Sangster calling it a case of “regulate or be regulated”. On the Newspoll findings, Sangster cautioned that self-reported surveys often didn’t reflect true behaviour.
“One thing we do need to be mindful of is the results from retargeted advertising tell quite a different story,” she said. “Retargeted advertising is approximately 300% more responsive than general banner advertising, so it shows that it actually does work. We can now start to differentiate between what people say and what they do.”
Sangster said targeted advertising was a relatively new concept and “as consumers it does take us a while to get used to these new types of marketing approaches”, hence the resistance. She said with the new laws coming in March, there were added provisions around transparency and notification, requiring businesses to be “much more proactive” in allowing consumers control over how their information is used.
However, Sangster balked at the notion promoted by many privacy advocates that tracking should be ‘opt- in’ rather than ‘opt-out’. “I don’t think that’s the way to go,” she said. “There always has to be a balance between consumer protection on one side and commercial reality on the other – the ability to do business. The approach we’ve got at the moment – transparency, notification and the ability to opt out – is the right one.”
The roll-out of ADMA’s new Code, which replaces the previous set of guidelines in place since 1999, follows the introduction of ‘Data Pass’, an accreditation and training scheme offering agencies and brands a way to vouch for their responsible data handling capabilities.
Jackie Crossman, managing director of public relations consultancy Crossman Communications, which commissioned the research as part of its Crossman Insights survey series, said companies were facing a backlash if people weren’t given more privacy protection and the ability to “know and choose” how they are being targeted and tracked online.
“The number one thing is, don’t abuse the privilege of being able to target people,” she said. “Really think about what you’re using it for – will it affect your trust factor, and will people be offended by what you’re doing? I was surprised by how many people said they didn’t want targeted advertising. They understand there have to be ads to make [free content] work, but they’re saying, ‘Don’t stalk me.’”
Education needed
Alice Manners, chief executive of the IAB, said the findings indicated a “lack of awareness” among the general public about how targeting works. “I think there’s a clear role for us as the IAB [in education], and one of the the things we’re doing is working with the industry on updating the OBA, or Online Behavioural Advertising, consumer awareness site,” she said.
“In general we know, and marketers have seen, that when you show people relevant advertising it’s far more preferred than non-relevant advertising, so we need to do the education piece.” She added that the IAB would be holding a workshop for members ahead of the Privacy Act changes, and would be updating its guidelines to reflect the new laws.
Jon Lawrence, executive officer of online rights organisation Electronic Frontiers Australia, said while the findings were “broadly in line” with what he would expect, it was “reassuring to see that there is actually a reasonably good understanding in the community, and consequent concern, about the risks to privacy of commercial online tracking activities”.
“I don’t read much into the fact that younger people seem less concerned about privacy issues than their elders as I suspect this has long been the case, and is, I think, probably largely unaffected by the prevalence of digital technology in today’s world,” he said. “It is interesting that many people seem to have a higher level of trust in government surveillance activities than they do in the commercial equivalent.
"I think that, given the revelations about the extremely broad surveillance activities of the NSA, GCHQ and their partner organisations in Australia and elsewhere, people should be as, if not more concerned, about government surveillance activities. I think people should also understand that, in many ways, it is the commercial tracking activities that enable much of the government surveillance that we have learnt about this year."
Protection of Personal Information
• 71% trust government organisations
• 68% trust financial institutions
• 56% trust retailers
• 30% trust social networking sites
Online Advertising Preferences
• 72% understand browsing behaviour can be used to deliver targeted ads
• 60% are uncomfortable with browsing behaviour being used for ad targeting
• 43% prefer targeted advertising
• 24% prefer generic advertising
This article first appeared in the 15 November 2013 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.
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