Posted November 07, 2018 05:33:00 Consumers have had to fight back against a powerful ad industry.
With over half of US TV ads now being broadcast through ad blockers, the pressure has been on advertisers to do the right thing.
Advertisers, in turn, have had little choice but to either add more blocking technology to their products or take their advertising revenue elsewhere.
But if a new survey from research firm E*Trade reveals that a majority of consumers don’t trust the ad industry to properly protect their privacy, it could spell the end of the ad ad ecosystem.
“Advertisers are worried that the public will start to distrust them because they can’t get their privacy back,” says Matt Flanders, an associate professor of journalism at Northeastern University in Boston.
“Advertiser fear is real.
They have to figure out how to make up for lost ad revenue and find new revenue sources.”
Advertisering’s biggest revenue stream is TV.
The advertising industry employs nearly 3 million people across the United States, with an average income of $5.5 billion per year.
The ads they broadcast are critical to the success of their business and they pay millions of dollars each year to networks, cable networks, online streaming services, and even some cable providers, including Time Warner Cable, Comcast, and DirecTV.
“If you want to be profitable in the advertising ecosystem, you have to get your privacy back, period,” says Flanders.
“This survey suggests that about half of Americans don’t understand what they are paying for in ads and aren’t comfortable paying for them,” he adds.
The poll of 1,500 adults was conducted by E*trade and has a margin of error of plus or minus 3.6 percentage points.
The survey also found that the most popular way to block ads in the U.S. is to install a VPN, which is a private, anonymous network that allows users to access websites and apps without their real identities being known.
But, the study also found, people also are more likely to be willing to pay for ads if they know that the companies they are watching are offering better protection for their privacy.
“When you pay for something, you expect that the company you are buying it from is going to do their best to protect your privacy,” Flanders says.
“This survey indicates that many people are willing to put up with ads that they believe are more protected than they are, but it’s still important to make sure you are paying attention.”
The poll found that 44% of respondents agreed with the statement that they would pay less for ads that advertise their health or a friend.
Only 27% said they would agree with the same statement if the company they were watching offered better privacy.
The most common response by respondents was “no” to a question asking whether they would consider blocking ads if the ads they were seeing advertised something other than health or friends.
“The problem is that there is no clear answer about what constitutes privacy for ad users,” Fagues says.
“There are two very clear definitions of privacy in the US: 1) what you don’t have to know about; and 2) what’s private.”
While it’s unclear whether the survey’s findings are reflective of a widespread consensus about ad privacy, Flanders thinks they are important.
“I think it’s important to have an understanding of what consumers think about advertising and the advertising industry,” he says.
Advertising companies need to be proactive about protecting their privacy and make sure they are following their guidelines, Fares says.
The results of the survey come just as the FCC is scheduled to vote on a proposal that would make it easier for Internet providers to sell personalized ad targeting.
That vote could lead to a return to the ad-blocker market, but Flanders believes the industry is far from ready for that.
“People are still getting used to the idea that the ads you see are personalized and not necessarily relevant to your interests,” he explains.