Between October 2013 and June 2017, I wrote a PhD dissertation on the determinants of effectiveness of social media advertising. A question that provided guidance throughout the five published papers that made up this project was: “How can advertisements be effective, yet with respect for the individuals’ privacy?”

In this summary, I’ll briefly address some main take-aways. 

1. The nuanced role of privacy concern in determining advertising effectiveness.

Our studies show that the influence of privacy and the use of personal data on advertising acceptance are limited. . We found that a possible explanation is the growing confidence people have in their own ability to control what information is shared and used on the internet. Adults’ (perceived) knowledge of privacy settings and their perception of control possibly limit the negative effects privacy concern could have on advertising effectiveness.

Even though we found that privacy perceptions and the use of personal information remain an important topic for the online audience, our findings show evidence of a more prominent role for contextual factors in determining the outcomes of personalized advertising on social networking sites. Over the five studies, so-called “advertiser-controlled factors” related to the characteristics of the advertisements consistently played an important role in determining advertising outcomes, whereas the factors related to the use of personal information were less determinative. 

Does privacy concern have no impact at all? No. Privacy perceptions have a role as a factor within a fragile equilibrium of several factors, in which the relevancy of both the ad message and the shown products play a crucial part.

2. Successfully catering to interests & current motives gets you a long way. 

Social media users do not access the platform with the goal of seeing advertising. Overall, users perceived ads as ‘noise’ that interrupt the social media experience. Yet, advertising positions consistent with the content flow and overall experience on the website—such as message stream ads—are effective when users perceive these ads as relevant. It will be important for advertisers to understand the involvement of their target audience and their current motives, when deciding on targeting options such as ad positioning. Improving targeting algorithms will be one of the most important points of attention for the online advertising sector, as we found that prejudice over ad appearance drops when ads are perceived as relevant. 

Several indicators could predict the motive of the users at the moment they open social media. The most straightforward sign would be real-time behavior. Because ads typically load when scrolling or when changing pages, they could adapt to the real-time behavior of the users.

As more devices and appliances are fitted with sensors that connect to the internet, indications of users’ motives and product involvement will most likely develop to be more detailed and specific. By having a better understanding of the target users’ motives and interests ads can not only be more effective, but users will also less likely perceive them as interruptions to their social media experience. 

3. But wait, is this all ethical?  

Advertisers and platforms are capable to create and serve ads tactically to alter users’ privacy perceptions. We found an overconfidence but a lack of knowledge among users on what information they share with whom in online advertising. If users do not know which decisions others make based on their personal data and how these decisions affect their online and offline experiences, it becomes difficult to assess privacy and act on it. 

We propose privacy initiatives in three areas to achieve a fairer and more balanced exchange of personal data for online services. 

1) In the way websites present personal information. Social media can present personal data in specific, natural language, instead of broad terms. They could give more clarity in terms of the parties with whom personal data is shared. 
2) In terms of transparency. Social media can make adaptations to the labeling of sponsored posts and the use of personal information. 
3) In control websites give and the way how control is given. The module to change privacy settings should be implementedcloser to the ‘action’, and not only on a separate web page. 

In our society, increasingly more personal data is captured and the capacities to act upon this data are developed at a staggering rate. On the one hand, personalization of advertising happens because relevant messaging leads to a more efficient allocation of advertising money. But more and more also because brands increasingly consider their image among their target audience as an important business asset. Many companies no longer want to bother their prospects or customers with irrelevant, annoying, or privacy-intrusive advertising. Companies learn that to be a brand which users perceive as purposeful, honest and fair, they have to conduct ethical management of personal data. This realization by advertisers, together with new privacy regulations and increasing media attention for privacy are three phenomena that make me believe that the use of personal information for advertising is becoming a better and more honest advertising technique and is robust for the future. 

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