How to Use Targeted Advertising in a Data Paranoid World
December 13, 2018
- Marketing •
- PPC •
Cydney Hatch• December 13, 2018
In today’s world, there is no doubt that people are concerned about keeping their online information private. From Facebook data leaks, phone app breaches and credit card fraud becoming more frequent in our digital lives, people are feeling like their digital “drawers” are out for the public to see.
When you add the influx of retargeting and other targeted advertising, people are feeling used and abused online.
Although new marketing tools have helped business growth, it’s your job as a business to make potential customers feel like they are in good hands. So, when it comes to ad personalization, particularly targeted ads, there’s a fine line between being creepy and being pleasant, especially when it comes to using customer personal data.
Stalking customer’s shopping habits and collecting their online data for advertising gain needs to be done carefully so you do not lose their trust (and as a result, their business).
So, if you want to avoid being tied in with the companies, apps and social platforms that turn people off, this article will talk about everything you need to know about targeted advertising and how you can do it well in a world that has a lockdown on personal information.
Let’s get a-crackin’!
How Targeted Advertising Works
Targeted advertising is placing ads on websites based off of individual’s demographics, buying history or digital behaviors like social media follows (aka, the emergence of the surveillance economy).
Many types of targeted advertising are used online, but advertisers use it in other media as well. Examples of targeted advertising typically include:
- Social Media Ads: Social platforms might place ads on the sides of your pages that change based on your friend’s actions as well as your own.
- Search Engine Ads: Search engines place ads on search result pages based off of your browsing histories.
- Behavioral Ads: Some websites, like Amazon, place ads based off of your purchasing habits.
Generally speaking, this is how targeted advertising does it:
- When a person views a product on a website, the person’s browser submits information about what he/she is looking at to third-party advertising networks.
- The information is then stored via a browser cookie—a small piece of code that lets ad networks and sites share information that shares what the person has viewed.
- If that person then clicks on another website that has the same advertising network, ads for the product the person viewed at the first website might show up through something like a retargeted ad. The hope is to show you ads that will spark your interest in returning back to the site and purchasing.
So, for example, in 2012, The New York Times revealed how Target was using shopping habits and customer data to successfully predict when a woman was pregnant to send baby-related coupons—sometimes before she even told her family!
The retailer has since learned to scatter in other types of coupons to make the maternity ones seem more random. But they’re not…
Although this all seems like a helpful tool for businesses to send helpful materials to active buyers, the problem lies in what it means to potential customers.
The Targeted Advertising Paradox: To Trust or Not to Trust
Marketing technology and analytics have boomed over the past few years, helping marketers make more relevant and direct advertising for customers like never before. Marketers no longer have to rely on assumptions about target audience’s behavior. Instead, they can deliver ads targeted specifically to individuals based on their interests.
Unfortunately, as this is great for business, there is a paradox of customer trust in businesses and brands.
On one hand, awareness could increase ad performance if it makes customers feel that the products they see are relevant. Cookies and other analytics tools allow business to create more valuable internet experiences for users. On the other hand, awareness could decrease ad performance if it makes people feel exploited.
To put it simply, if people dislike the way their information is being shared or used, it can hurt your bottom line and decrease interest in your business, products or brand.
So, how do you find the balance?
As a marketer, this delicate balance will either make or break your targeted ad experience. The good news is that social scientists already know a lot about what triggers privacy concerns off-line. In this next section, we will talk about how marketers and businesses alike can use personalization and targeted advertising properly to respect people’s privacy.
Doing both will not only help you as a business succeed in a data paranoid world, but it will also create loyalty with customers who see you as helpful not creepy.
How to Use Target Advertising in a Data Paranoid World
Now, this article is not to discourage you from using personalized or targeted advertising. In fact, if you do it correctly, it can greatly increase the performance of your ads by serving it up to people who are actually interested in what you are selling.
The key is again, is to find the balance between digging for data gold and using it properly and discreetly. By trying the tips below, you can easily create targeted ads that inform consumers of products they want and need but in a way that feels appropriate.
Create Trust and Transparency
It is a marketing basic to know that for any sale to happen, a potential customer needs to trust your business, the quality of your services/products as well as your overall brand.
As advertising has evolved and has become more of a part of people’s digital lives there is a higher need for transparency. You can see this common practice with many ads now displaying an AdChoices icon, FTC regulations requiring brands to share which influencer posts are paid for to even Facebook’s “Why am I seeing this ad?” feature.
Such disclosure can be beneficial when targeting is happening with your advertising—especially if people trust and enjoy the platform in which they see the ad. I mean, no one wants to feel like they are secretly being watched and listened to through their computer or phone screens.
As a business, you do not want to burn bridges with platforms AND customers.
To prove this point, Harvard Business Review conducted an experiment with Facebook users, and asked participants how much they trusted the social media company. Next, they directed them to find the first advertisement in their Facebook news feed and determine if they thought the ad had been generated using first- or third-party information and using declared or inferred information. After they determined that they asked the participants on how interested they were in purchasing the advertised product and engaging with the advertiser in general.
The results showed that overall ads from unacceptable sources (inferred information, etc) performed worse than those from acceptable sources. However, trust enhanced consumers’ receptiveness: People who trusted Facebook and saw ads based on acceptable sources of data expressed the highest interest in purchasing the product and engaging with the advertiser.
Like this experiment, it is always best to be transparent and trustworthy with how you are doing your advertising. People respond well to it.
Create a Sense of Control
Control over personal data is becoming increasingly important in today’s online world, where data collection is now common.
For instance, data brokers collect all kinds of personal information—from platforms like Facebook as well as internet shopping sites, store loyalty programs and even credit cards. Therefore, as targeted advertising becomes more sophisticated and specific—and as customers are becoming more aware of personal information openness on the internet—offering people meaningful control over their information will likely improve ad performance.
To do this and more, it is helpful to continue that experience on your website. Be sure to use services and platforms on your website that have security features that protect individual’s payment and personal information like SSL Certificates, DoS, Firewalls, PCI compliances or HTTPS.
Once people click on ads and see a site that is certified and protected with these types of tools it can improve your ad conversions by putting people at ease knowing their information is safe.
Try to Avoid Sensitive Information
Let’s be honest, not every piece of information is important to a targeted ad. In particular, anything about health conditions, sexual orientation, and so on are typically not data pieces you NEED to collect to make a successful campaign.
Typically, platforms like Google and Facebook limit advertisers from basing their targeting on personal attributes such as race, sexual preferences, relationship statuses and medical conditions.
So, to avoid problems in your advertising profiles, avoid these “no-no” topics as targeting them might cause problems. If you sell items specific to these identifications, advertise directly on websites that people would be likely to visit. For example, if you sell medical marijuana products you might want to sell directly on digital/printed platforms within that given industry (especially since marijuana products face a lot of limitations in the PPC world).
Make Sure Data is Good
Since there are a lot of ways data can be pulled incorrectly it’s important you understand how and why data you collect might not be good in your targeted advertising efforts. Here are two key things you should consider when it comes to data collection:
Don’t Solely Use DSP Data. There is a significant risk when solely using machine learning algorithms and DSP data. As DSP and platforms you use to advertise might not integrate well, it’s vital for marketers to use tactics that will give comprehensive data that takes all media activity and every touchpoint into account.
Test Data and Use Human Insight. With any type of marketing, it’s a good idea to constantly test things. It is also good for marketers to compare data on a case-by-case basis. When you take the time to see differences across many different testing data sets you can see where and what data will be helpful to your advertising.
Technology can pull a lot of information for you but do not underestimate the power of human insight. Jump into your data and be actively involved in your targeted research.
Use Data in Helpful Ways
Data collection opens up all sorts of insights, but that does not mean you need to use all of them and exploit them for all of your advertising needs.
People typically do not respond well when their personal information is used to generate a recommendation or an advertisement that feels intrusive. You might know a lot more than customer knows, but that does not mean you need to play all of your data cards!
For example, apparel companies like Stitchfix and Modcloth might have very personal information like clothing sizes, including bra sizes! (Typically information prefer to keep private) The key about this is the information collected is extremely useful to their clothing services because it allows them to ensure best fits for individuals during online shopping.
These businesses collect and use private information in an appropriate and noninvasive way!
Another example is Hinge dating. This application connects people to dates within their social networks through collected data about their friends and mutual friends. This application is clearly using third-party sharing but people forgive data collection if they benefit from it in a compelling way.
Like these examples, just because you have all the information about someone does not mean you need to exploit it. Use it craftily to benefit potential customers and they will be happy you did as its helpful to their lives.
Have Justification for Data Usage
Along with being transparent, like we discussed above, it’s nice to share reasons why you want to collect data from your users. Many sites show data usage policies in their sign-ups and other content pieces for example.
By telling people what you plan to do with their data, you allow people to:
- Decide if they want to participate
- Feel more comfortable with your business/brand
- Understand your motivations
A real example of this is LinkedIn in its data usage policy for their users: “We use the data that we have about you to provide, support, personalize and make our services (including ads) more relevant and useful to you and others.”
By disclosing information like this, you can easily set up standards for users and employees alike to prevent abuse and misunderstandings.
Try Traditional Marketing First and Foremost
Just because technology is there does not mean you have to solely rely on it. There is still a lot of information you can gather the old-fashioned way without digital surveillance.
Tactics like surveys, polls and emails to gather information on customers tastes, preferences, opinions and demographics are still great ways to provide yourself with advertising ammo!
Although gathering data directly from consumers can be expensive or at times impractical, it creates a strong cultivation piece that can enrich your customer experience with your business/brand. When you ask questions and involve customers, it helps them feel apart of brands they love!
Safe and Sound: Targeted Advertising Done Right
Advertisers clearly have much to gain by taking advantage of the effective new targeting tools, but at the same time, as targeting gets better, it will be increasingly important to step into the experience of the customer and be sensitive.
Targeted advertising has a lot of benefits to your digital marketing efforts, but its all about how and when you do it. It requires tact, creativity and sensitivity in a world where people feel constantly bombarded by advertising and digitally exploited.
If you want some more tips on how to effectively use targeted advertising, reach out to me here!
What do you think? Should targeted advertising be allowed by social platforms and other services? How do you feel we can better protect customer’s personal information? How do you feel about digital surveillance? Comment below!