If your business is using online advertisements that are targeted to consumers based on their Internet browsing history and personal information, you may want to reconsider that marketing tactic, new research finds.
According to a new study from Ithaca College, many online users find tailored ads to be "creepy," and thus are less likely to buy the products and services being promoted.
"My experience was that consumers' reactions to it were not good," Lisa Barnard, the study's author and an assistant professor of integrated marketing communications at Ithaca College, said in a statement. "They found it to be really creepy."
The study's authors defined "creepiness" by the feeling consumers get when they sense an ad is too personal because it uses data the consumer did not agree to provide, such as online-search and browsing history. Consumers are even more creeped out by this because they don't know how and where that information will be used.
For the study, researchers conducted experiments on a group of more than 200 college students. To begin, the researchers showed the students a page from a mock shopping site that featured ads promoting a USB flash drive or acne cream. The USB drive was considered neutral, while the acne medication was selected because it was something a college student might not want marketers to know about them. [Real-Time Marketing: Making It Work for You ]
Then, the researchers had the students view a Facebook news feed. Some participants saw an ad on this page for the item they had previously seen, while others were served an ad for a totally different product. In addition, some of the ads mentioned a special promotion for students at the college they were attending, while others mentioned the promotion but not that it was for students at that college.
The participants were asked questions about the ad that ranked their perceptions of creepiness, their feelings about seeing the ad, the likelihood they would purchase the advertised product and whether they felt manipulated by having seen the ad they were shown.
The study's authors discovered that, although there were some positive feelings towards the ads, there was also a negative effect based on the "creepiness factor" that comes from being targeted individually. These negative feelings accounted for a 5 percent drop in their intent to purchase an advertised product.
While targeted ads are not new, they are now much more customized than in years past, Barnard said. Previously, targeted ads were based on larger demographic descriptions, such as age or hobbies. But now, with personal information scattered across databases, marketers are able to create more specific consumer profiles.
That's what consumers find creepy and what marketers are failing to consider, Barnard said. Even millennials, most of whom are digital natives, are bothered by this extreme customization, she added.
"They know they're being marketed to, and they don't like that," Barnard said.
Based on these findings, online marketers should recognize that consumers feel violated when ads are tailored too specifically, Barnard said.
"Marketers have been making blanket assumptions that, the more data we have, the more we should use," she said. "But my argument is that, just because we have all of that data, doesn't mean you should just go ahead and use it all the time in all cases."
Barnard will present her findings at the 2015 International Communication Association Conference this May.