The Way Forward for Targeted Advertising Amidst New Privacy Laws

The Way Forward for Targeted Advertising Amidst New Privacy Laws

Ashwin Krishnakumar
Ashwin Krishnakumar

Chief Technology Officer, Airtory

Published on: 16 Aug 2023

Reading time: 5 minutes

A while ago, the world wide web presented a brand-new landscape for advertisers to reach their audience and significantly expanded the tools at their disposal for the same. User data that is gathered online, with people regularly sharing their personal details and internet cookies tracking the clicks, contributed towards helping advertisers enhance their marketing capabilities as they gained unprecedented insights regarding their audience. This allowed for new forms of targeted advertising, that could be personalized to suit individual users.

Whether it is display advertising, social media ads, mobile advertising, or any other form of online ads, targeted advertising is the base of all advertising efforts. However, today, users are much more aware and tech-savvy, which has given rise to fears about user privacy and the invasiveness of hyper-personalized ads. Now, several countries have begun mandating firms to disclose what user data they are gathering, how it is being gathered, and to what use it is being put to. With the benefits of targeted advertising on one side and increased user awareness and privacy concerns on the other, advertisers need to maintain a balance, which will require a revamp of their entire strategy for target advertising in modern times.

What is Targeted Advertising?

Targeted advertising is a significant part of marketing strategy, and recently, there have been several advancements in digital marketing that have enabled advertisers to significantly improve their targeting and serve more personalized ads and brand communication for different audience segments based on specific behaviors, personality traits, interests, and preferences, etc. As it is crucial for an advertiser to know who their customers are and where they can reach them, this type of advertising involves tracking user activity over the internet to collect relevant user data. Using dynamic creative optimization capabilities, advertisers can tailor creatives, messaging, and CTAs in real-time, based on the user the ad is being shown to.

The Importance of Targeted Online Advertising

Completely ad-free online experiences are not exactly possible today. However, tailoring advertisements to match user needs ensures relevance, which in turn can actually enhance user experience. Additionally, if brands want to stand out from the crowd, they need personalized marketing campaigns that resonate with target audiences. Targeted advertising helps ensure that brands are able to reach users who are interested in the products or services they have on offer, which delivers better returns on investment for the advertiser as well.

The Challenges of Targeted Online Advertising

Over the last few years, several privacy concerns have come up about how tracking information is used for targeted display ads. Other data concerns also started coming to light with the increasing prevalence of big data, which led several governments across the world to announce new consumer privacy laws to protect consumer data.

The integration of opt-out features to prevent websites or apps from collecting user data by known tech companies, like Apple, challenged marketers and developers alike to adapt to the changing norms, and to find creative and non-intrusive ways to collect data.

Now, it is a norm for websites, apps, etc. to focus on simplified documentation and processes for users who want to change their privacy settings, define what user data can be collected, or who want to opt out of receiving targeted display ads completely. On the other hand, brands that collect user data for business operations are increasing their focus on securing sensitive consumer information and reducing the risks of data breaches.

The Way Forward for Advertisers

The best examples of targeted advertising in modern times are still personalized ads that inform a user about products/services they want, but where the personalization is managed in an acceptable manner. Some good practices in this regard are as follows:

Voluntary Ad Transparency

An opaque or confusing explanation about why a particular ad is being shown to a user can have a negative effect on consumers. But that does not mean that you must give long, detailed explanations either. Marketers should commit to a relevant amount of transparency, like providing information about data-use practices if they are requested and making sure that these closures are easy to access and have enough clarity to make sense for the users. Adding an advertising option icon that allows users to get information about why they are seeing a particular ad or to opt out of targeted advertising is one of the best examples of transparency in targeted ads.

Provide Users More Control over the Data that is Being Collected

Many privacy concerns arise from the feeling of not being in control. Many consumers do not mind much when certain information or data is used in some contexts. However, they may start to worry when they find themselves unable to control who else has access to their data and the uses it may be put to further down the line. When consumers are allowed to change their privacy settings and are given a say in what data can be shared, personalized ads tend to perform significantly better.

Toeing the Fine Line Between Personalized and Invasive

User data that is being collected today provides deep insights into users. Advertisers however need to practice restraint and understand what is appropriate and what isn’t. Consumers tend to react poorly when they see ads where personal information has been used to generate inappropriate communication. Using communication that directly references personal traits or sensitive information is intrusive while using such information to create a user persona of likes or preferences that coincide with a brand’s offerings can turn out to be a delightful ad experience for users.

Utilizing Other Ways of Data Collection

Data can also be collected in traditional ways, where no digital surveillance is involved. A simple survey can help brands gather the information they need and more. Such more-open forms of information collection can help create more defined personas for personalizing advertisements.

Using Smart Platforms to Create Ads that Resonate with Consumers

To create the right kind of ad experiences, advertisers can use programmatic advertising platforms to create ads that generate engagement without violating a user’s data privacy. Airtory’s Ad Builder Studio allows you to create rich media ad experiences and dynamic creatives in bulk for cross-channel publishing. Personalized, meaningful ads can be created and tested for effectiveness in enhancing overall campaign performance. Airtory also provides real-time tracking and reporting capabilities, which allow advertisers to understand what is working and what is not. They can also optimize live campaigns to maximize their returns on ad spend in real time.

Online data collection and targeted advertising are very subjective topics that elicit varying reactions from users. However, research towards understanding the customer, being cognizant of where personalized turns into intrusive, and inculcating the best practices for targeted advertising can go a long way in helping advertisers enhance campaign performance without violating the privacy of their audiences.

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