Surveillance marketing is a form of digital pollution

Surveillance marketing, using cookies to track people without their consent, is a feature of online display advertising. It’s also a form of digital pollution just like fake news, cybercrime, trolling and hate speech. The European Union’s new data protection laws – the GDPR and the e-Privacy Directive – will make it illegal for online display to continue polluting the internet in this way.

Ad tech

It was a decade ago when advertising technologists told us that surveillance marketing was the future: now we can track people to deliver the perfectly personalised advertising experience, they said, as if they were somehow on the side of the consumer.

And so, with little thought for the future, advertisers began annoying people by chasing them around the internet with ads for trainers. Then they started targeting whole segments of the population using data from ad tech companies who hadn’t asked for anybody’s permission to collect it.

Then the direct response marketers attached themselves to ad tech like barnacles to a whale and advertisers started using this personally identifying information for sales attribution and brand uplift studies, too.

Our industry did all this without thinking to ask for the consent of the consumers that we’re supposed to serve. Surveillance marketing, with its low transaction costs, was violating consumers like a randy bull.

The irony of it all

The irony of it all is that we now know that surveillance marketing doesn’t work.

The job of brand advertising is to attract new customers by targeting them with an ad that triggers an emotional response and increases brand salience. The job of each advertising channel is to demonstrate a positive ROI.

If you retarget consumers who have visited your website on another website without their permission, or you make inferences about them using their data, all you’re doing, it turns out, is reducing their interest in buying your brand.

The death of the cookie as a remarketing tool can’t come quick enough for our industry.

To those people who are hanging on to the myth of the perfectly personalised advertising experience like a shipwrecked sailor hugging a mast, we’d point them to a recent article in The Harvard Business Review that, with an even hand, systematically debunks that myth.

Targeted ads that don’t overstep

The HBR article Targeted Ads That Don’t Overstep reports on how surveillance marketing has led to a consumer backlash, how it ‘activates concerns about privacy and provokes consumer opposition.’

The article points out that psychologists already know a lot about what triggers privacy concerns off-line.

‘While people may be comfortable disclosing personal information directly, they may become uneasy when that information is passed along without their knowledge. If you learned that a friend had revealed something personal about you to a mutual friend, you’d probably be upset – even though you might have no problem with both parties knowing the information.’

‘It can also be taboo to openly infer information about someone, even if those inferences are accurate. For example, a woman may inform a close colleague of her early-term pregnancy, but she’d likely find it unacceptable if that coworker told her he thought she was pregnant before she’d disclosed anything.’

The authors of this article show us that these norms about information also apply in the digital space. They do this by collecting a list of the common ways in which Google and Facebook use our data to generate ads, then asking a sample audience to rate how acceptable they find each method to be.

They prove that consumers don’t like it when advertisers use information obtained on a third-party site rather than on the site on which an ad appears because that’s like talking behind someone’s back. They also find that consumers find deducing information about them from analytics to be just like inferring information.

Then they look at the impact that this violation of privacy norms has on the performance of ads, revealing that consumer frustration at being targeted outweighs any benefit.

Interest in purchasing was 24% lower in the group exposed to unacceptable sharing.

And the group that viewed the ad generated through inference showed 17% less interest in purchasing.

Correcting a market failure

Consumers are now more sensitive to privacy and less willing to give up personal information than they have been in the past. And they are also less likely to buy from a brand if they cannot trust how that brand handles their data.

The European Union’s new data protection laws are correcting a market failure, removing a decade old incentive for the over-disclosure of data.

The advertising industry can no longer violate user privacy by knowing more about how it collects and uses data than consumers do.

The paper bag analogy

With the new data protection laws poised to kill the cookie as a remarketing and sales attribution tool, there is a renewed focus in our industry on contextual targeting, the technique that the advertising industry typically uses to target the right people in the right place at the right time.

The return of contextual targeting is like the return of the paper bag.

Yesterday’s friend can become today’s enemy.

There was a time when plastic was the hero of the age. Today plastic bags are Public Enemy Number 1 as far as the environment is concerned.

In the same way that supermarkets are dropping plastic bags for paper bags, the advertising industry is rejecting cookie base targeting and returning to contextual targeting.

A new way

When we look into our crystal ball here at Silence, we think that the end of surveillance marketing will cause three things to happen to online display:

It will enjoy a creative renaissance as it breaks the rusty shackles of direct response advertising.

Contextual targeting will dominate as brands focus more and more on targeting by website, contextual channels and segments, keywords, location and time of day.

And finally, as the cost of inventory goes up, engagement will mature into the most valued Return on Investment metric.

Lee Henshaw, Founder, 26th Mar 2018

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