Understanding consumers’ perceptions of online advertising

As the amount of time consumers spent online exponentially grew over the last few years, brands began investing more and more in online advertising. Brands resorted to using all the means available to fight for the diminishing attention spans of their target audiences. However, consumers became increasingly aware of how they were being targeted and the perceptions of online advertising significantly worsened. It no longer became acceptable to collect personal data for advertising purposes without the explicit consent of the consumer. Tools like third-party cookies which were initially designed to enhance the consumer experience soon became the enemy. Tech giants like Apple and Google soon decided to do away with cookies altogether.

With challenges around data privacy and how brands were using personal information becoming one of the biggest concerns, governments stepped in with legislation such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) to define how a business needed to be transparent about the way data was collected, stored and used. This resulted in all of us being subject to the cookie-consent pop up whenever we’ve visited a website. While most pop-ups try to define what data is being tracked and how it is being used, it’s done little to help consumer perception.

Most consumers continue to be bombarded with ads for a product or service they looked up online well after they’ve either lost interest or have already purchased. Despite the wealth of information in a cookie, consumers today continue to feel they aren’t getting value in return for the information they are giving up.

We at Seedtag collaborated with the international internet-based data analysis and market research firm YouGov to survey 3.000 adults across 6 European countries to understand how consumers perceive online advertising, their preferences for funding editorial content and the value they feel they get from the ads they encounter online. According to the survey, 84% of respondents feel the ads they are served online lack personal relevance. This is further backed up by nearly a third of all respondents stating that they deny all cookies on the sites they visit while 12% stating that they provide false information while filling out cookie forms. Clearly, there’s no love lost when it comes to consumers of today and online cookies. The survey generated three key insights:

1. Data Privacy benefits both consumers and brands – Data privacy is a key concern for consumers. 82% of participants felt positive or very positive about brands ending their use of personal data for targeting. Brands that want to continue to be trusted need to have a robust data privacy policy in place and be transparent with their consumers. Companies that move away from leveraging third-party data or are more mindful about what consumer data they are collecting and why, will continue to be perceived positively in the online world.
2. Consumers don’t mind being served advertising in exchange for free content – It’s not all bad news for advertisers. There is still a large section of users who are on-board with being served ads, provided they get value in terms of free editorial content tailored to their interests. 58% of participants chose hybrid or ad supported methods for funding the journalistic content they consume. Advertisers need to go back to the drawing board to evaluate how they can add more value to consumers seeing their ads.
3. Relevant ads attract attention when placed in the right context – Context and creativity continue to lead the way in the online advertising world. 53% of users responded that ads embedded within high quality content were more likely to grab their attention. Consumers who spend a large part of their day on digital media place a high value on the context in which they see the ad. The survey indicates that “dedicated” readers, ie. those participants who spend time reading digital media multiple times a day, are 177% more likely to feel positive about a brand if the ad is shown to them alongside content that is relevant to them. This is where ‘context’ would play a large role in a post-cookie world for brands.

The market is at a very interesting inflection point when it comes to online advertising. Consumer expectations when it comes to data privacy swing between those who are completely against any use of personal data and those who are willing to share it as long as they get something of fair value in exchange. Advertisers and brands need to juggle with meeting these expectations and changes in the way they’ve been doing business. However, the challenges setby current data privacy acts are creating new opportunities for brands to innovate by leveraging new technologies. Early results do indicate that brands are able to target audiences better and see significantly higher returns on their investment, allowing them to focus on creativity rather than just inventory. 

Brands that can successfully craft a privacy-first approach and are able to leverage new-age tools like Contextual AI, will be able to strike the perfect balance between personalization and privacy, and eventually thrive. To further understand the various perceptions consumers have towards online advertising, and subsequently build a strategy to effectively engage with them, download our research report today.