SOURCE: PreferenceCentral

PreferenceCentral

July 07, 2010 08:00 ET

New PreferenceCentral Study Reveals Consumers' Attitudes Toward Behavioral Targeting Are More Complex Than Indicated in Past Research

In Real-World Trade-Off, Consumers Prefer Targeted, Relevant Online Advertising

AUSTIN, TX--(Marketwire - July 7, 2010) -  PreferenceCentral today announced results of a survey of 1,050 U.S. Internet users that shed new light on consumers' attitudes towards targeted advertisements they are exposed to online. Contrary to prior research, the survey results reveal that Internet users are more likely to prefer targeted online ads when they are asked to make real-world, value-for-value trade-offs, such as free access to Internet content. The research also shows that attitudes and preferences significantly shift when consumers are provided with education about behavioral targeting or when they are offered the ability to control targeted ad exposure. 

Prior research on consumers' attitudes toward behavioral targeting has largely employed simple, single-option questions, and they have led to an incomplete and misleading view of consumers' real-world perspectives on online advertising. In an effort to contribute to a more informed and balanced course of action for the online advertising industry, PreferenceCentral sought to build upon past research with its consumer survey, which asked consumers to state their preferences for tailored online advertising in the context of real-world trade-off scenarios. As a result, PreferenceCentral found that over half of consumers surveyed indicated that they prefer relevant targeted online ads as a trade-off for access to free content.

Further, the PreferenceCentral survey went a step beyond past research by reiterating the exact questions from recent studies, including the Annenberg-Berkley survey "Americans Reject Tailored Advertising" and similar research on the topic. When asked simple, single-option questions, PreferenceCentral generated similar results as those reported in the Annenberg-Berkley study; only a minority of respondents indicated that they wanted to receive tailored online ads. However, while past researchers concluded that the reason behind consumers' negative response was privacy concerns, the PreferenceCentral study probed further and found that their primary reason was a dislike for annoying online ads, not privacy concerns. 

Certain factors do play a material role in consumers' comfort level with online advertising. When educated about behavioral targeting, 29 percent of respondents became less comfortable with the trade-off of free content for targeted ads. However, when subsequently informed that behavioral targeting information is anonymous and non-personally identifiable, 35 percent of these Internet users became more comfortable, indicating a need for consumer education on this topic.

Even more encouraging, when presented with the option of a solution that would give them more control over their exposure to targeted ads and transparency into the data used by advertisers, 70 percent of Internet users expressed interest in using such a tool, with 33 percent stating they are very to extremely interested. In fact, 41 percent of consumers became more comfortable and were 27 percent more willing to receive targeted, relevant ads in exchange for free content if they were given a control solution. 

Finally, across all trade-off exercises, only about 10 percent of consumers expressed a preference for paying for content with no advertising.

"The core takeaways for the advertising industry are that it's not enough to just educate consumers on targeted advertising; we must also provide meaningful choice and control over their online ad experience," said Dr. Karl Lendenmann, vice president of marketing and analytics for PreferenceCentral parent company Datran Media. "For online publishers, these results mean that they should be offering multiple content-access models to optimize appeal and monetization." 

Recently, the Network Advertising Initiative (NAI) released their own research that shows behaviorally targeted ads are more than twice as valuable in terms of prices advertisers pay and more than twice as effective in converting consumers who click on ads into buyers than normal run-of-network ads. With such strong value tied to behavioral targeting, it is crucial to obtain and understand a more complete view of consumers' perspectives on online advertising.

"Consumer studies like the PreferenceCentral study add real value to our understanding of consumer attitudes towards behavioral advertising," said Jules Polonetsky, co-chair and director at the Future of Privacy Forum. "The results make it quite clear that consumers strongly desire options that give them control of their experience. When they get meaningful control, many become more comfortable with data being used to personalize their Web surfing."

"This research confirms the Online Trust Alliance's belief that consumers value online content and advertising which is tailored to their needs with the confidence that their privacy preferences are respected," said Craig Spiezle, executive director and founder of the Online Trust Alliance (OTA). "The challenge today is the value proposition they receive from ad supported online services is taken for granted and not communicated effectively. OTA looks forward to working with PreferenceCentral and other industry leaders who are committed to privacy, transparency and consumer control." 

The PreferenceCentral study is the first of an ongoing series of research studies the company plans to produce in support of its mission to strengthen consumer trust and understanding of advertising through technology and education. Methodology and full results are available online at www.preferencecentral.com/consumersurvey.

About PreferenceCentral
PreferenceCentral is a comprehensive solution that allows advertisers and their partners to provide consumers with an easy way to control their own online advertising experience. PreferenceCentral was developed by the proven compliance technology experts that created by UnsubCentral, the industry standard for blue chip companies dedicated to honoring consumer email preference requests.

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