![]() Similarly, Urban Outfitters walked back the gender-based personalization of its home page after customers complained. When the New York Times reported the incident, many consumers were outraged, and the chain had a PR problem on its hands. They included a teenager whose father was incensed-and then abashed to discover that his daughter was, in fact, expecting. The retailer sent coupons for maternity-related products to women it inferred were pregnant. However, in a now-infamous example, when Target followed a similar practice by creating promotions that were based on individual shoppers’ consumption data, the response was not so benign. Amazon features shopping ads throughout its site, making product recommendations based explicitly-and often conspicuously-on individual users’ search data, without seeming to draw any consumer ire whatsoever. Some firms have done better than others in anticipating how customers will react to personalization. Controlled experiments have found similar results. One study revealed that when a law that required websites to inform visitors of covert tracking started to be enforced in the Netherlands, in 2013, advertisement click-through rates dropped. The latter outcome seems more likely if marketers continue with a business-as-usual approach. On the other hand, awareness could decrease ad performance if it activates concerns about privacy and provokes consumer opposition. Supporters of cookies and other surveillance tools say that more-relevant advertising leads to a more valuable, enjoyable internet experience. This throws a whole new dynamic into the mix: How will targeted ads fare in the face of increased consumer awareness? On one hand, awareness could increase ad performance if it makes customers feel that the products they see are personally relevant. Now regulators in some countries are starting to mandate that firms disclose how they gather and use consumers’ personal information. And personal experiences with highly specific ads (such as one for pet food that begins, “As a dog owner, you might like…”) or ads that follow users across websites have made it clear that marketers often know exactly who is on the receiving end of their digital messages. Public outcry over company data breaches and the use of targeting to spread fake news and inflame political partisanship have, understandably, put consumers on alert. The research supporting ad personalization has tended to study consumers who were largely unaware that their data dictated which ads they saw. But there is also evidence that using online “surveillance” to sell products can lead to a consumer backlash. ![]() Research has shown that digital targeting meaningfully improves the response to advertisements and that ad performance declines when marketers’ access to consumer data is reduced. With users regularly sharing personal data online and web cookies tracking every click, marketers have been able to gain unprecedented insight into consumers and serve up solutions tailored to their individual needs. The internet has dramatically expanded the modern marketer’s tool kit, in large part because of one simple but transformative development: digital data. If marketers avoid those tactics, use data judiciously, focus on increasing trust and transparency, and offer people control over their personal data, their ads are much more likely to be accepted by consumers and help raise interest in engaging with a company and its products. These norms-and the authors’ research-strongly suggest that firms steer clear of two ad-targeting techniques generally disliked by consumers: using information obtained on a third-party site rather than on the site on which an ad appears, which is akin to talking behind someone’s back and deducing information about people (such as a pregnancy) from analytics when they haven’t declared it themselves. The good news is that psychologists already know a lot about what triggers privacy concerns off-line. Marketers today need to understand where to the draw the line. ![]() But when this practice feels invasive to people, it can prompt a strong backlash. With people regularly sharing personal details online and internet cookies tracking every click, companies can now gain unprecedented insight into individual consumers and target them with tailored ads. Data gathered on the web has vastly enhanced the capabilities of marketers.
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