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Advertising paradox: New study measures privacy vs. personalization in ads

by | Feb 28, 2023 | Marketing, Public Relations

When it comes to digital advertising, consumers want a custom experience—but not at the expense of privacy. New survey research from marketing solutions firm Vericast examines and validates this paradox about personal data—which puts marketers in a tough spot.

The survey found that consumers want to see targeted ads, but they also want to understand how advertisers use the information they collect. The key for advertisers is that personalization and privacy are not mutually exclusive, and both can be delivered with the right approach.

“Consumers prefer to engage with brands that know what they want and incentivize them with the right offers at the right time, but privacy is a growing concern,” said Meggie Giancola, senior vice president of sales solutions & strategy at Vericast, in a news release. “This paradox is creating an opportunity for marketing solutions with the agility to safely work with, understand and activate data so brands can deliver the experiences consumers desire without sacrificing privacy. As the digital ecosystem evolves, brands that provide transparency into how they use and protect data will be at a competitive advantage. Their marketing will ease consumer’s minds, making it more effective at building loyalty and driving growth.”

Advertising paradox: New study measures privacy vs. personalization in ads

The effectiveness of tailored advertisements as a consumer tool for online commerce is evident in the survey responses

Nearly 25 percent of respondents say they are inclined to click on advertisements for something they have considered purchasing but have not searched for yet, while 27 percent are likely to respond to personalized offers that include a deal or discount. Still, many consumers are focused on controlling their data, and do not want their information being sold (46 percent) or behaviors tracked (21 percent).

Additional survey findings include:

For half of consumers, privacy outweighs personalization

When asked what is most important when receiving online ads, 50 percent of consumers said privacy, while 36 percent cited personal relevancy.

This preference cuts across demographics. Baby Boomers express the most angst towards data privacy over personalization (55 percent), followed by Gen X (53 percent), Gen Z (48 percent) and Millennials (45 percent).

Nearly half (46 percent) of consumers believe marketers sell the data they collect, thus putting their privacy at risk. Over half of consumers believe social media companies engage in this practice.

Consumers want privacy, but value personalization in action

Targeted advertisements impact shopping behaviors. Of the survey participants, 20 percent said they made a purchase after receiving a personalized ad, 27 percent became aware of a new brand, 21 percent were reminded of a brand they had previously purchased from, and 12 percent used a deal to make another purchase from them. Most consumers (62 percent) feel positive or neutral towards targeted advertisements.

In identifying the platforms that offer advertisements most relevant to them, consumers identified Facebook (34 percent), Instagram (13 percent), YouTube (12 percent) and TikTok (8 percent). They’re also most likely to engage with the advertisements on Facebook (30 percent), Instagram (16 percent), YouTube (11 percent) and TikTok (7 percent).

Lack of transparency is driving privacy concerns

According to the survey, 39 percent of consumers feel powerless in controlling or informing how companies use their personal data.

Of those who participated in the poll, 23 percent say they are unsure what kinds of information companies collect overall.

Vericast conducted a survey of 1,000 consumers in the U.S. to understand how they view the relationship between data privacy and advertising personalization.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter

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