You may be surprised to learn that online advertisements know more about your personality than you think. You may have wondered why an ad for a particular product was shown to you, but later realized that you are the type of person likely to want to purchase it.
The ads you see on your screen are behaviorally targeted.
Behavioral Targeting uses data about your online activities – including clicks, social media posts, purchases, and browsing – to choose ads that are likely to appeal to you.
Recent research has shown, however, that these ads do much more than reflect your past or current preferences. They can fundamentally change the way you view yourself.
The next decade saw a surge in behavioral targeting, thanks to improvements in tracking and predictions. Yahoo! filed a patent. In 2006, the process of behavioral targeting was standardized to produce scores for user profiles based on click frequency, intensity, and recency. These scores are then used to determine advertisements.
Target, as it should be, brought the predictive power of data on consumer behavior in marketing to public attention. In 2012, a retailer in the UK predicted a pregnant customer before she told her father.
Target achieved this by creating a model that tracked purchases and predicted pregnancy status using specific items (e.g., multivitamins and lotion). The article described offline tracking and advertising, but the story showed how marketers can use data to target marketing messages.
Identification of behavioral targeting
How can you tell if an advertisement is behaviorally targeted or not?
Look closely at the ads on some of your favorite sites, such as Yahoo or Gawker. (Unless you are using an ad-blocker). Do you see a small blue triangle in the upper-right corner of an ad? Perhaps a tiny script, “AdChoices?” Then BINGO!
The AdChoices Icon is an icon that appears on ads to indicate they were selected based on past online activity. Digital Advertising Alliance, an industry group that enforces privacy policies, responded to Federal Trade Commission guidelines by encouraging advertisers to use the icon and educating consumers. The two initiatives aim to address privacy concerns among consumers.
Although marketers like behavioral targeting because it leads to higher conversion rates and greater click-through rates when compared with ads without behavioral targeting, the consumer’s sentiment is not as positive.
Why are these ads so popular and effective if people don’t love them? When someone sees a behaviorally targeted ad, they might recognize the information contained in it. We wondered if they would change their perceptions of themselves to match the information. This is in line with what psychologists refer to as Labeling Theory.
Advertisements as social labels
For years, social psychologists have known that labeling people can affect their behavior.
A classic study found, for example, that someone who was called “charitable after donating” is more likely to donate a second time than someone else. Labels from others can influence our identity. We act in accordance with what we believe.
We found in a recent series of studies published in the Journal of Consumer Research and that receiving a behaviorally-targeted ad could change a person’s perceptions of themselves to match the personality traits associated with the products in the ad.
This is because ads that are behaviorally targeted act as implicit social labels. A behaviorally targeted advertisement is like a marketer telling you, “You care about the environment” or “You have sophisticated taste.”
Our studies found that consumers who believed the ad to be behaviorally targeted felt more “green” or more sophisticated when it was for an eco-friendly product or a restaurant with refined food, as compared to a control condition where they didn’t believe the ad had been behaviorally targeted. A behaviorally targeted advertisement is like a badge of honor because the consumer knows that it’s based on their previous behavior.
A behaviorally targeted advertisement can change the way people perceive themselves and also influence their behavior. The ad suggests that the recipient would be interested in the product. Believing an ad is behaviorally targeted can increase interest in the product. This belief affects other behaviors as well.
In one research study, we found that people who received an ostensibly behavior-targeted ad for a product that promotes environmental awareness felt more “green” and were more likely to buy the product. They also donated more money to environmental charities.
It may be a sign that you would not be interested in an advertisement for a sophisticated dining establishment. TV dinner via shutterstock.com
Accuracy is important
Our findings are good news for those readers who worry that ads that target them based on their behavior could make them think all kinds of things about themselves. Our research shows that accurate targeting is required to have a significant impact on self-perception.
You won’t suddenly become a sophisticated diner if you don’t engage in online behavior that suggests you like upscale dining. (For example, you might Google “how to make microwave dinner” or “fast food restaurants”) An ad from an upscale restaurant will not do that. You may be aware that the ad targets such a person, but you will likely reject it because it is not related to your behavior.
Marketing managers who want to benefit from behavioral targeting should ensure that their algorithms can accurately identify the type of consumer a click-stream data reveals.
Consumers can expect that their search history and whether they share a computer will influence how behaviorally targeted advertisements affect them. Your search history could be less accurate if you are constantly searching for information that is for someone else (e.g., buying supplies for work, researching a partner’s hobbies, or looking for gifts). Mobile ads may be more accurate, and they are likely to influence how you view yourself.
The best way to avoid receiving ads based on your tracked behavior is to opt out completely. The Digital Advertising Alliance, as part of its campaign to increase awareness of the AdChoices Icon, has made it simple for people to opt-out. You can go back in time with a few clicks to the days of anonymous online ads (which are often irrelevant).
Advertising is powerful.
The bottom line is that behavioral targeting can be effective in increasing click-throughs and sales, but it may also have unexpected effects.
AdChoices, which was created to make consumers more comfortable with behavioral advertising, could be the main driver behind these effects. Only when consumers are aware that their ads have been behaviorally targeted can they change their perception of themselves.