Since the mid-1990s, digital advertising technology has been accessing user data to make ads more relevant and effective. This collection of user data has continuously raised concerns about privacy for consumers. Cookies were one of the first technologies used by digital advertisers to store a small amount of data on the user’s computers. This method is still used by programmatic buyers for frequency capping, creative rotation, as well as targeting against a small amount of user behaviors.
A long-time standard, location targeting was initially done using IP addresses. Geo-location data collection has evolved to more accurately identify where users are. Geo-location data is now collected via mobile device GPS technology, wireless routers, fitness trackers, smartwatches, and more.
As programmatic targeting tactics became standard for marketers, so did the need for maintaining consumer trust through privacy regulations.
In 1996, the Interactive Advertising Bureau was founded to support this need through advisory boards, research, standards, legal support, and also education — for both the industry and its audiences.
In many countries, the government is also involved in ensuring that consumers are aware of their privacy rights and choices. In 2009, the United States’ Federal Trade Commission began investigating advertising technology platforms that collect consumer data for advertising purposes. While recognizing the need for stricter regulations and privacy protection, they tasked industry leaders to develop a self-regulatory program. Multiple organizations across the advertising industry came together to set up self-regulations guidelines and resources forming the Digital Advertising Alliance.
AdChoices Opt-out Program
Most notable from these efforts is the AdChoices program. AdChoices encourages advertising platforms to include the option icon on ads or webpages where data is collected and used for behavioral advertising.
The AdChoices icon serves to inform consumers and give them the ability to opt-out of behavioral or interest-based ads. The user has to click on the icon to trigger the pop-up message, which varies depending on the environment in which it is served.
Fortunately for advertisers the icon is small, unobtrusive and most consumers don’t notice it. Viewers have to roll over the icon to see the word “AdChoices” and click on it to view the pop-up in which enables them to opt-out.
Consumers have become more knowledgeable about privacy and data. In 2016, about 20% of iOS device users in the United States were limiting ad tracking through the settings on their device, and in South America less than 10% of iOS devices have the “limit ad tracking” feature turned on.
Most consumers appear to be comfortable or at least accustomed to certain types of targeting.
Users who’ve abandoned items in their shopping carts have come to expect or sometimes even appreciate being retargeted. In 2016, 1 in 5 shoppers completed a purchase after a retargeting reminder.
Cookies and geolocation are still important data points, but a lot has changed since the 1990’s. With the rise of mobile and the growth in programmatic, targeting technology has shifted to include behavioral data — forcing a shift in how privacy is treated across the industry.
The best thing that marketers can do is stay informed about privacy regulations. Although that can be daunting for global brands, marketers need to earn the trust of their consumers — and respecting their privacy remains critical to supporting effective advertising as an industry.
- In a 2009 decision, the FTC placed self-regulatory responsibilities around privacy in the hands of the advertising industry.
- AdChoices was developed to give consumers a choice that remains unobtrusive to advertisers.
- Consumers are becoming more “data-savvy” which will require marketers to stay on top of regulations if they want to continue to build critical trust with their audiences.