Tuesday, October 21, 2014

Online Advertising and Privacy Concerns





So far in this blog, we have thoroughly discussed how online advertising can benefit a business. This is very important, because you, the readers, are the future business leaders of this country. As business students, learning how to use online advertising is essential to our future careers. However, this blog post will serve to view online advertising from an alternate viewpoint: consumers. Taking our customer's thoughts and concerns into account is a necessary function of a successful advertising campaign.


As a society, I believe people are accepting the increasing role technology plays in our daily lives. But as with any societal or cultural change, people will have hesitation.  Part of this hesitation dwells in the worry that personal information might not stay personal. As technological advances allow businesses to collect "big data", consumers worry about the prospect of a "big brother" monitoring their every move.  But are these concerns valid? Some would argue that they are. Recent data breaches at Target and Home Depot have proven to the consumer that technology has its faults. In addition, American culture generally values personal privacy. These are examples of obstacles in the way of online advertising; but it is up to business leaders to take into account the cultural environment they are operating in and find ways to combat the concerns of their customers.


One way to approach this problem is by utilizing the Risk/Return trade-off. Simply put, this principal states that people are willing to take on greater risks for greater returns. To apply it to online advertising, consumers would be willing to accept a greater perceived security risk if they saw more personal benefit from advertising online.  But how can business managers increase consumer benefit? I would argue that the best answer to this question is RELEVANCE. If consumers consistently see ads that are relevant to their wants and needs, that benefit would outweigh their privacy concerns. One study found that “two-thirds of Internet users believe better targeted ads would be less annoying, and 45% would share personal information in exchange for that advertising relevance.”  As technology leaders improve the techniques we use in online advertising, we will be able to provide more relevant ads to our customers and ease their concerns about personal privacy.


Do you think privacy should be a concern in online advertising? Is relevance the best way to provide benefit to customers? How else could the business community ease consumer concerns?

11 comments:

  1. My personal opinion would be that I would rather have privacy than have relevant ads sent to me because I willing gave my information out.

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  2. Daphne, If I understand your comment, you would rather protect your privacy than trade privacy for relevance.

    I think to some extent this is true for everybody. We all have a line we don't want crossed but that line is largely a question of degree. For example, you're willing to give up some degree of privacy in order to receive an education and certain services. If you're like most people you don't mind so long as you feel you can trust those you give your information to and that determination is largely based on relevance.

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  3. Privacy is very important in a modern progressive society, but sometimes when people on the internet waive their rights when performing certain actions. If someone was to confess to a crime openly on a social media or blog site, i believe that the police should be able to use that as evidence. Most websites now a days have terms that you agree to, and gives them the right to violate certain privacy rights.

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    1. That is a good point that online personal security goes way beyond the scope of advertising. A lot of people do waive their rights, especially on social media websites. This can allow for a wide variety of uses for personal information, by both businesses and law enforcement.

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  4. Honestly, when it comes to online advertising, most of the time I don't trust the adds I see online. Even if it's supposedly from a company I trust, I rather go straight to the website than click on a link.

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  5. I always get a creeped out feeling when I get an ad that was directly related to a comment I'd made online or a page I visited, but privacy violation isn't exactly what I'd call it. It's not like people are actually reading my posts and then giving me ads, it's all done through computers and massive data sorting software. I am more than willing to let companies send me ads (that I block with a custom ad blocker and so rarely see) in order to use the crazy convenient sites that I do (Google, I am looking at you). I am more concerned that eventually the data mining software will be so much faster and more accurate that actual people WILL start to look at my information and use it to their advantage (insurance agents, real estate agents, bankers, bosses, and who knows who else).

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  6. Relevance is absolutely the best way to decrease concerns over privacy. I get so annoyed when I am bombarded with ads that i have no need for or desire to use. It even turns me further away from the product or service. Relevant ads are the way to go!

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  7. One concern I have is after a company has compiled your personal information for ad purposes can that company just take that information and sell it to other companies and organisations or do you still have some ownership over its distribution?

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  8. Nothing is more useless than irrelevant ads. Its essentially a waste of money for the company that is paying for it.

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  9. I think privacy is very important when it comes to the internet surfing, as much as I dont like the idea of companies monitoring us, theres no way to avoid it. At all times your internet provider has access to your internet actions. The government could tap into your phone calls at anytime. my point being is as technology advances our privacy diminishes.

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  10. So many companies out there, especially those who place their ads on social media sites, target customers by what they search for online. In terms of a student, whose browsing consists at least 50% of research for school, this data can be very misleading to a business. Its not that the student is interested in purchasing the product, but simply in knowing something about the product or something related. There has to be a better way than this...

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