By Austen Hufford
Kim Merrikin spent a lot of time online last year researching
which car she wanted to buy. Soon, the communications manager at a
Seattle nonprofit noticed car advertisements on the websites she
visited, even for specific cars she had just researched. In
December, she bought a new 2018 Subaru Crosstrek.
The ads didn't stop.
"A week after I bought a car, these ads were still in my feed,"
she says. "They were totally following me to every site with ads on
it that I went to."
Ms. Merrikin's experience is one shared by pretty much everybody
who searches for -- and ultimately buys -- a product online.
According to a recent survey by digital-media-advertising company
Nanigans, nearly 90% of consumers surveyed had seen ads online for
a product they had already purchased.
While digital ads that follow users around the web have existed
for years, online data and advertising practices are being looked
at more closely in the wake of the Cambridge Analytica scandal and
Russian meddling in the 2016 U.S. presidential election.
No cruise control
Digital advertisements known as retargeted ads attach themselves
to consumers who have visited a specific page on a website, added
an item to a cart or completed a purchase. Someone who visited the
itinerary for a potential cruise vacation might see such
"retargeted" ads that push the cruise company or even the specific
trip.
"A lot of internet advertising just blends into the background,"
says Lisa Farman, an assistant professor at Ithaca College who has
studied how people respond to personalized ads. "When you are
served an ad for something you had already searched for yourself, I
think it serves as a cue to people and perks up their attention and
is a red flag."
Advertisers want to reach audiences that have already expressed
interest in their services -- a signal that is more powerful than
traditional demographic or geographic-based targeting.
More-personalized ads are clicked on more often than
less-personalized ones: One study by researchers at Boston College
and Germany's University of Bremen said click-through rates for
retargeted retail advertisements for specific brand-product
categories were about three times the rates for untargeted ads
aimed at recent viewers to the retail site.
The market for turning viewers into buyers on the internet is
expected to grow. Market-research firm Technology Business Research
Inc. says it expects "shopper engagement" spending, which includes
large amounts of retargeted ads, to total $38 billion this year and
to grow to $99 billion by 2021.
While retargeted ads are increasingly being used, others in the
industry, including Boston-based Nanigans, have questioned whether
such ads are truly effective, saying this technology doesn't drive
as many purchase-decisions as thought. For example, some users who
clicked on an ad may have been intending to buy the product
regardless.
There is also the risk of turning away potential customers who
feel that their privacy is being invaded, something that may not
show up in simple reach-click-and-buy reports. In the current
climate, users may be more likely than before to view retargeted
ads as creepy.
Still, it is relatively easy to take some steps to reduce online
retargeting. Both Facebook Inc. and Alphabet Inc.'s Google let
users opt out of those types of ads. The companies also provide
individuals with some details about why they are being served
specific types of advertisements.
Facebook users can disable retargeted ads by going to their
advertising settings and disabling "Ads based on data from
partners." For Google's advertising network, users can go to the
Digital Advertising Alliance's WebChoices Tool and click to opt out
at once for dozens of advertising networks, including Google's.
Consumers also can choose to enable "privacy modes" on many
internet browsers, which prevent some common methods of tracking.
In Google's Chrome browser, users can click on the three vertical
dots in the upper-right corner to open a new, "incognito"
window.
Defending model
In recent months, Facebook executives have given public defenses
of the company's personalized and targeted advertisements, standing
by the company's business model as consumers worry over the safety
of their data online.
A Facebook representative recently told the British Parliament
that businesses around the world are using 2.2 million versions of
its retargeting tool, Facebook Pixel, which generates data that
Facebook collects -- meaning that Facebook is tracking users across
the internet.
Engineers at Facebook have worked to streamline the service's
privacy and advertising choice tools. Chief Executive Mark
Zuckerberg said in early May that Facebook was developing a tool to
let users erase this website history that Facebook has
collected.
In April, Mr. Zuckerberg told members of Congress, "Even though
some people don't like ads, people really don't like ads that
aren't relevant."
Chief Operating Officer Sheryl Sandberg in April said in opening
remarks at the company's first-quarter earnings call that Facebook
users can see why they are getting specific ads and said users can
turn off ads from individual advertisers. On Facebook, users can
click on the top-right corner of ads to learn more about them,
including how they are being targeted.
'Not at odds'
"Advertising and protecting people's information are not at
odds," Ms. Sandberg said, signaling to investors that Facebook
wasn't changing its basic model of providing a free service to
users and then making money off them through advertising. "Targeted
ads that respect people's privacy are better ads," she added.
Ms. Merrikin, the new-car buyer in Seattle, eventually chose to
hide the Subaru ads that kept appearing in her internet browsing.
She says she decided to buy a Subaru even before she saw the
targeted, digital ads. She thinks that too often, retargeted ads
can appear creepy and invasive, hurting a company's ability to
build long-term trust with its customers.
Dominick Infante, director of corporate communications for
Subaru of America Inc., says the company continues to work toward
reducing consumer frustration with ads, including by pushing for
more consumer controls and working with auto-shopping websites and
its retailers. There can be delays with updating information, which
can lead to ads being shown even after a purchase is made, he
says.
"Norms in the digital space are still evolving," says Tami Kim,
an assistant professor at the University of Virginia who has
studied how consumers respond to online advertising transparency.
"Marketers and companies don't really know what the expectations
from consumers are."
Mr. Hufford is a reporter for The Wall Street Journal in New
York. Email austen.hufford@wsj.com.
(END) Dow Jones Newswires
June 18, 2018 07:14 ET (11:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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