Consumers
see much
greater risk than reward in online ads
University of Illinois
at Urbana-Champaign
Personalized ads now
follow us around the web, their content drawn from tracking our online
activity.
The ad industry has suggested we're OK with it -- that we see benefits roughly equal to perceived risks.
The ad industry has suggested we're OK with it -- that we see benefits roughly equal to perceived risks.
A study by University
of Illinois advertising professor Chang-Dae Ham says otherwise, suggesting the
industry may want to reconsider its approach.
"The perception of risk is much stronger than the perception of benefit," Ham found in surveying 442 college students on how they coped with what is known as online behavioral advertising. "That drives them to perceive more privacy concern, and finally to avoid the advertising," he said.
The study appears in
the May issue of the International Journal of Advertising.
Previous studies have
looked at various aspects of OBA, but Ham said his is the first to investigate
the interaction of various psychological factors -- or mediating variables --
behind how people respond to it and why they might avoid ads.
"The response to
OBA is very complicated," he said. "The ad avoidance is not explained
just by one or two factors; I'm arguing here that five or six factors are
influencing together."
Ham examined not only
interactions related to risk, benefit and privacy, but also self-efficacy
(sense of control); reactance (reaction against perceived restrictions on
freedom); and the perceived personalization of the ads.
He also looked at the
effect of greater and lesser knowledge among participants about how online
behavioral advertising works. Those with greater perceived knowledge were
likely to see greater benefits, but also greater risk, he found. Similar to
those with little perceived understanding, they tilted strongly toward privacy
concerns and avoiding ads.
Ham's study of online
behavioral advertising follows from his interest in all forms of hidden
persuasion, and his previous research has looked at product placement,
user-generated YouTube videos and advergames. But OBA is "a very special
type," he said, in that it elicits risk perceptions and privacy concerns
different from those in response to those other forms.
The study conclusions
could have added significance, Ham said, because research has shown that
college-age individuals, like those in his study pool, are generally less
concerned about privacy than those in older age groups.
If his findings are an
accurate reflection of consumer attitudes, Ham said they could represent
"a really huge challenge to the advertising industry" since online
behavioral advertising represents a growing segment of advertising revenue.
Ham thinks
advertisers, in their own interest, may want to make the process more
transparent and controllable. "They need to educate consumers, they need
to clearly disclose how they track consumers' behavior and how they deliver
more-relevant ad messages to them," he said.
Giving consumers
control is important because it might keep them open to some personalized
online advertising, rather than installing tools like ad blockers, in use by
almost 30 percent of online users in the U.S., he said.
With little
understanding of online behavioral advertising, and no easy way to control it,
"they feel a higher fear level than required, so they just block
everything."
It's all the more
important because the technology is only getting better and more accurate, Ham
said. Tracking systems "can even infer where I'm supposed to visit
tomorrow, where I haven't visited yet."
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