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LOL : Danielle Exclusive ; Revealing this information to customers often causes them to revolt against the advertiser

May 15th, 2018 | by Richard Paul
LOL : Danielle Exclusive ; Revealing this information to customers often causes them to revolt against the advertiser
Business and Finance



melanie-joly-qp-may-31-2017-200x20021617476_10155386937395804_4241967911189123659_nFacebook Picture/ namer witheld for security reasons by Danielle magazine

Why did you see that ad? Tech companies won’t tell you — and for good reason

Companies are understandably reluctant: revealing this information to customers often causes them to revolt against the advertiser

Facebook CEO Mark Zuckerberg makes the keynote address at F8, Facebook’s developer conference, Tuesday, May 1, 2018, in San Jose, Calif.Marcio Jose Sanchez / AP

At a privacy committee meeting last Thursday, MPs offered up some personal information to a representative from the tech and advertising giant Google.

As he read through a webpage listing what the company believed were his “interests,” Liberal MP Nathaniel Erskine-Smith disputed the idea that he liked “walking/running,” as Google had inferred from his online habits. “I do like action films,” he said approvingly as he scrolled.

Conservative MP Jacques Gourde wondered whether Google was aware he ate at St-Hubert every two weeks, thanks to geographical information compiled by Google Maps. Whether that information is indeed on Google’s servers, it is now preserved for posterity on the parliamentary record.

The committee is investigating the breach of Facebook data in the Cambridge Analytica controversy, in which a British political consulting firm hoovered up information from 87 million of the social media platform’s user accounts.

In the wake of that scandal, MPs last week pressed Colin McKay, the head of government relations for Google, about why the company doesn’t offer more transparency about the data it uses to target specific ads to specific people based on their apparent interest or behaviour. Although users can delve into their profiles via the Google My Account feature to get an explanation or look under the hood at what the company says it knows about them — as Erskine-Smith did during McKay’s testimony — the information it provides is often vague.


“The explanation often is ‘Because you’ve liked similar things on the internet.’ That can’t possibly be the level of transparency that’s acceptable,” said Erskine-Smith.

Customers don’t like it when an ad is generated from information obtained from a third party.

McKay sympathized with the MP but couldn’t offer any firm answers.

“You and I are speaking to a similar goal, which is, you’re right, you should have the ability to understand how you’re exchanging information with us and how we’re using it to deliver services,” said McKay.

A study released last month shows Google, Facebook and other digital companies in the business of gathering information about users so they can sell targeted ads have a good reason to be vague: revealing this kind of information to customers often causes them to revolt against the advertiser.

Google’s parent company Alphabet raked in nearly $27 billion in advertising revenue last year, which accounts for 84 per cent of the company’s total revenue. Nearly all of Facebook’s $13 billion in revenue came from advertising on the platform.

The paper, published last month in the Journal of Consumer Research, tests a simple assumption about online advertising: that people have similar expectations for their personal information online as they do offline. Most people would be annoyed or angered if a friend blabbed their personal information to others and they find it vexing when someone assumes something about them, whether right or wrong, based on incomplete information.

The same principles hold true for online advertisers. Customers don’t like it when an ad is generated from information obtained from a third party and they don’t like it when companies make assumptions about them, rather than using information the customer provided.

The study found that when these red flags are revealed to people as they see an online ad, the ad’s effectiveness plummets.

Showing this information “reduces ad effectiveness by increasing consumers’ relative concern for their privacy over their interest in the increased personalization,” the study says.

That could be why online advertisers are reluctant to get into the specifics. The study says “conspicuous disclosure” of this kind of data is uncommon and “merely made available for the motivated consumer to find.”

And people mostly remain in the dark about the information they’re sharing. A2015 piece in the Harvard Business Review found that only 14 per cent of people knew most web browsers share their browser history and 25 per cent knew their data footprint includes information on their location.

A bright side in the new study for advertisers is that when users trust a platform, the effectiveness of ads goes up.

Prime Minister Justin Trudeau meets with Eric Schmidt, executive chairman of Alphabet Inc., at the Global Progress conference, Thursday, September 15, 2016 in Montreal. Paul Chiasson /THE CANADIAN PRESS

Online advertisers have argued they’re simply trying to provide ads that are relevant to the people seeing them. It’s pointless to show ads about kayaking to someone afraid of the water, so the local canoe club may want to target ads to people who like other pages about the sport. But the line between personalization and creepiness is often hard to spot.

In 2010, Google CEO Eric Schmidt said his company’s goal was “to get right up to the creepy line and not cross it.”

The study finds that crossing that line can undo a marketer’s hard work and create backlash that makes a consumer less likely to be receptive to the ad.

“Even the most personalized, perfectly targeted advertisement will flop if the consumer is more focused on the unacceptability of how the targeting was done in the first place,” the study says.

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