Writing in the Harvard Business Review, Leslie K. John, associate professor of business administration at Harvard Business School, Tami Kim, assistant professor of marketing at Darden School of Business at the University of Virginia, and Kate Barasz, assistant professor of marketing at IESE Business School in Barcelona, warn that using online “surveillance” to sell products can lead to a consumer backlash.
Their research has explored two aspects of this, the first being how acceptable consumers find the ways Google and Facebook use their personal data to generate ads.
They reported that obtaining information outside the website on which an ad appears is akin to talking behind someone’s back, while deducing information about someone from analytics is akin to inferring information.
A second stage used this insight to show study participants online ads that explained why these were being displayed. One group was told “You are seeing this ad based on the products you clicked on while browsing our website”, while a second group was informed “You are seeing this ad based on the products you clicked on while browsing a third-party website” and a third, control group saw neither of these.
“We found that when unacceptable, third-party sharing had occurred, concerns about privacy outweighed people’s appreciation for ad personalization,” the authors reported.
“Those attitudes in turn predicted interest in purchasing, which was approximately 24% lower in the group exposed to unacceptable sharing than in both the first-party sharing and the control groups—a clear indication of backlash.”
A similar test invited participants to complete an online shopper profile, before one group was shown an ad with the disclosure “You are seeing this ad based on information that you provided about yourself” and a second was told “You are seeing this ad based on information that we inferred about you”; a third, control group saw neither of these.
“The group that viewed the ad generated through inferences showed 17% less interest in purchasing than the other groups did—even though the ads were exactly the same across groups,” the authors said.
“In sum, these experiments offer evidence that when consumers realize that their personal information is flowing in ways they dislike, purchase interest declines.”
Sourced from Harvard Business Review; additional content by WARC staff