Rather than helping to bring customers in, personalized online ads could be scaring them off, new research finds.
A study recently published in the International Journal of Advertising revealed that, instead of focusing on the benefits of receiving personalized ads while surfing the internet, many consumers are more worried about the risks to their privacy that these targeted ads bring.
"The perception of risk is much stronger than the perception of benefit," said Chang-Dae Ham, the study's authors and a professor at the University of Illinois, in a statement. "That drives them to perceive more privacy concern, and finally to avoid the advertising."
For the study, Ham surveyed 442 college students on how they coped with online behavioral advertising. The survey was designed to investigate the interaction of various psychological factors behind how people respond to online ads and why they might avoid them. [What types of online ads are successful? The kinds that tell a story]
In addition, Ham examined not only interactions related to risk, benefit and privacy, but also sense of control, reaction against perceived restrictions on freedom and the perceived personalization of the ads.
"The response to [online behavior advertising] is very complicated," Ham said. "The ad avoidance is not explained just by one or two factors; I'm arguing here that five or six factors are influencing together."
Ham believes consumers' privacy concerns could be even stronger than what was uncovered in the study because college-age individuals, like those surveyed for the research, are generally less concerned about privacy than those in older age groups.
The study also examined how the level of knowledge among participants impacted their reactions to personalized online ads. Ham found that those with greater perceived knowledge were likely to see greater benefits but also greater risk, while those with little perceived understanding were more likely to avoid the ads because of privacy concerns.
Ham believes this shows that advertisers would benefit from providing consumers with more understanding of how online behavior advertising work.
"They feel a higher fear level than required, so they just block everything," Ham said. "[Advertisers] need to educate consumers, they need to clearly disclose how they track consumers' behavior and how they deliver more-relevant ad messages to them."
Ham believes giving consumers greater control over the online behavior advertising process is important because it might leave them more open to receiving some personalized online advertising, as opposed to installing ad blocker tools that block them all.