May 31st, 2011
Despite Digital Privacy Uproar, Consumers Are Not Opting Out
Advertisers’ fears that, given the chance, consumers would opt out of behaviorally targeted advertising en masse appear to be vastly overblown—but don’t mistake that for thinking they don’t care about privacy.
Since last year, ad organizations in the U.S. have been running a campaign meant to stiff-arm regulatory efforts of the sort that went into effect last week in Europe, where companies will now have to get permission from consumers before dropping cookies onto their computers. The centerpiece of the campaign to convince Congress and the FTC that self-regulation is good enough is the “Ad Option Icon” placed in some ads, pointing to information about behavioral targeting and offering a way to opt out of it.
Thus far it’s received relatively low response, a rare case where low click-through on an ad is positioned as a positive thing. The click-through rate is just 0.002% and of those people who do follow the link, only 10% opt out of the ads, according to DoubleVerify, which recently won a contract from the industry trade group to license the icon for ad clients. Two other companies, Evidon and TRUSTe, also provide the service. Evidon, which has the longest set of data, is seeing click-through of 0.005% with only 2% opting out from 30 billion impressions.
But the low rates alone don’t mean consumers aren’t interested in the issue of how companies are monitoring and using their online behavior. After all, click rates on display ads are generally low, often well under 1% depending on the product category, the audience and the kind of website.
The issue screams out for a broader awareness effort, something the industry tried last year with the “Advertising Is Creepy” campaign that ran on ad space donated by major web publishers.
The other problem is that advertisers aren’t exactly jumping to license the icon. Only 60 or so advertisers use it, according to two executives familiar with the program.
Stuart Ingis, founder and counsel of the Digital Advertising Alliance, painted a different picture. He said 300 advertisers have either signed on or are in process. “Compliance is exploding,” he said. He added that the forthcoming ad campaign will be online only, where the people it’s trying to reach are.
DoubleVerify CEO Oren Netzer said the low turnout can be blamed on brands adopting a “wait and see approach” and not wanting to invest too heavily in any one thing in a shifting landscape with proposed legislation.
But isn’t not waiting and seeing the whole purpose of the campaign?
“It is exactly the idea,” said Mr. Netzer. “That’s what’s ironic about it.” It’s exactly the idea to not wait and see.”