Targeted Advertising: A Malevolent Stalker or Passive Watcher?
If a meme of an FBI Agent reading your messages has ever struck an anxious nerve, or if your paranoia compels you to cover your webcam with a sticky note, the thought of businesses stalking your online behaviour is probably creepily intimate.
Consider what happens when you shop online for a Patagonia Vest. You browse through the Patagonia website, yet seconds after clicking away, you are bombarded by jacket ads littering both your Facebook and Instagram feeds. Even after a lockdown-buying-spree, and purchasing said jacket, these ads follow you.
Many have been dubbed these ‘stalker ads’, feeling more like a clingy ex than a concerted business strategy.
How are ads ‘stalking’ me?
Let’s revisit the Patagonia vest example. To keep a record of your visit, Patagonia creates a file on your computer called a ‘cookie’. Later, when you're reading an article on the AFR, automated advertisements look at this cookie and create ads for products similar to your Patagonia search. They identify you as a finance bro, and probably see fit to recommend you products from the ‘finance bro starter kit’, say the ‘Wolf of Wall St’ DVD.
Cookies help identify whether you are interested in buying a product. They search for signals – for instance if you closed the site after searching a product or if you put the item in the shopping cart without purchasing. From there, companies follow your cookie through ad networks and trackers to deliver you targeted ads.
The Privacy Paradox
The societal issue that plagues targeted advertisement is its encroachment on privacy. The more advertisers learn about you, the more they can infer your spending habits. Gender, age, race, income and relationship status all come into play when serving ads.
When considering protections to your data, the Privacy Act 1988 (‘Privacy Act’) applies to personal information, which is essentially information that can identify you. However, the information advertisers collect is often too general to be able to do that. This means targeted advertising often falls outside the periphery of the Privacy Act, leaving few legal mechanisms that govern how organisations must handle your data.
Whilst some have tried to sweep this under the carpet as a ‘non-issue’, there are alarming discriminatory applications of online advertising. Platforms like Facebook have received backlash for allowing advertisers to discriminate against users from minority groups, essentially permitting advertisers to target or exclude users from receiving ads based on their race or gender. This came into the media spotlight during the Cambridge Analytica scandal when Congresswoman Alexandria Ocasio-Cortez grilled Zuckerberg on the capacity for politicians to “pay to spread disinformation” to African-American communities on Facebook. Such criticisms caused Facebook to stop advertisers using specific attributes like race when targeting ads about only housing, financial services or jobs. But this is far from a water-tight solution.
The business-side of things
As users continually share personal details online and cookies perpetually document each click, businesses have gained unprecedented insight into consumer behaviour. The results show a staggering improvement in ad responses when serving tailored solutions to consumers, with ad performance dropping when the consumer data pool is reduced.
However, increasing evidence suggests that such online ‘surveillance’ techniques are susceptible to consumer backlash. The research supporting ad personalisation largely based their sample off consumers who did not know their data influenced ads they saw. Nowadays, such naivete is hardly the norm. Public outcry about company data breaches and targeted ads spreading fake news have made consumers wary of the role they play in fomenting polarisation.
This introduces a new dynamic: how will targeted ads perform with consumers' increased awareness? It could be argued that awareness will increase performance of ads if customers are comfortable and feel that the products being recommended are useful and relevant. Supporters of cookies believe targeted advertising leads to a more valuable internet experience. On the other hand, consumer cognizance could decrease ad performance if it incites concerns about privacy and ignites consumer backlash. This appears the far more likely option. A Netherlands study in 2013 revealed that after new legislation mandated websites inform visitors of ‘covert tracking’, advertisement click-through rates dropped.
Conclusion
With targeted advertising only set to increase, it is important to be vigilant with how you are handing your data to companies. Clearing cookies and disallowing companies from storing cookies on your device is the first step to rebuking this concerning trend. Failing to respond to targeted advertisements also sends a signal to companies that these practices are ineffective. In any case, it is a vital area to watch for legislation reforms as this will have large ramifications on how companies reach their customer base.
If a meme of an FBI Agent reading your messages has ever struck an anxious nerve, or if your paranoia compels you to cover your webcam with a sticky note, the thought of businesses stalking your online behaviour is probably creepily intimate.
Consider what happens when you shop online for a Patagonia Vest. You browse through the Patagonia website, yet seconds after clicking away, you are bombarded by jacket ads littering both your Facebook and Instagram feeds. Even after a lockdown-buying-spree, and purchasing said jacket, these ads follow you.
Many have been dubbed these ‘stalker ads’, feeling more like a clingy ex than a concerted business strategy.
How are ads ‘stalking’ me?
Let’s revisit the Patagonia vest example. To keep a record of your visit, Patagonia creates a file on your computer called a ‘cookie’. Later, when you're reading an article on the AFR, automated advertisements look at this cookie and create ads for products similar to your Patagonia search. They identify you as a finance bro, and probably see fit to recommend you products from the ‘finance bro starter kit’, say the ‘Wolf of Wall St’ DVD.
Cookies help identify whether you are interested in buying a product. They search for signals – for instance if you closed the site after searching a product or if you put the item in the shopping cart without purchasing. From there, companies follow your cookie through ad networks and trackers to deliver you targeted ads.
The Privacy Paradox
The societal issue that plagues targeted advertisement is its encroachment on privacy. The more advertisers learn about you, the more they can infer your spending habits. Gender, age, race, income and relationship status all come into play when serving ads.
When considering protections to your data, the Privacy Act 1988 (‘Privacy Act’) applies to personal information, which is essentially information that can identify you. However, the information advertisers collect is often too general to be able to do that. This means targeted advertising often falls outside the periphery of the Privacy Act, leaving few legal mechanisms that govern how organisations must handle your data.
Whilst some have tried to sweep this under the carpet as a ‘non-issue’, there are alarming discriminatory applications of online advertising. Platforms like Facebook have received backlash for allowing advertisers to discriminate against users from minority groups, essentially permitting advertisers to target or exclude users from receiving ads based on their race or gender. This came into the media spotlight during the Cambridge Analytica scandal when Congresswoman Alexandria Ocasio-Cortez grilled Zuckerberg on the capacity for politicians to “pay to spread disinformation” to African-American communities on Facebook. Such criticisms caused Facebook to stop advertisers using specific attributes like race when targeting ads about only housing, financial services or jobs. But this is far from a water-tight solution.
The business-side of things
As users continually share personal details online and cookies perpetually document each click, businesses have gained unprecedented insight into consumer behaviour. The results show a staggering improvement in ad responses when serving tailored solutions to consumers, with ad performance dropping when the consumer data pool is reduced.
However, increasing evidence suggests that such online ‘surveillance’ techniques are susceptible to consumer backlash. The research supporting ad personalisation largely based their sample off consumers who did not know their data influenced ads they saw. Nowadays, such naivete is hardly the norm. Public outcry about company data breaches and targeted ads spreading fake news have made consumers wary of the role they play in fomenting polarisation.
This introduces a new dynamic: how will targeted ads perform with consumers' increased awareness? It could be argued that awareness will increase performance of ads if customers are comfortable and feel that the products being recommended are useful and relevant. Supporters of cookies believe targeted advertising leads to a more valuable internet experience. On the other hand, consumer cognizance could decrease ad performance if it incites concerns about privacy and ignites consumer backlash. This appears the far more likely option. A Netherlands study in 2013 revealed that after new legislation mandated websites inform visitors of ‘covert tracking’, advertisement click-through rates dropped.
Conclusion
With targeted advertising only set to increase, it is important to be vigilant with how you are handing your data to companies. Clearing cookies and disallowing companies from storing cookies on your device is the first step to rebuking this concerning trend. Failing to respond to targeted advertisements also sends a signal to companies that these practices are ineffective. In any case, it is a vital area to watch for legislation reforms as this will have large ramifications on how companies reach their customer base.
