Do You Understand the New Advertising Privacy Icon?

The holiday shopping season is in full swing and that means advertisers are after two things: your attention, and your data. The advertising industry took a step to give consumers a way to opt-out of targeted ads. New research shows consumers appreciate the effort, but don't know quite how to respond. Are you taking advantage?

The holiday shopping season is in full swing and that means advertisers are after two things: your attention, and your data. The advertising industry took a recent step to give consumers a way to opt-out of targeted ads. New research shows consumers appreciate the effort, but don’t know quite how to respond. Are you taking advantage?

Recent figures show that nearly 80 percent of online advertising campaigns use data tracking of some kind. That tracking has become a big issue, for consumers and Congress, as well as the ad industry itself.

As we reported in October, the industry took a proactive step, attaching an “Advertising Option Icon” to ads through which users can click and read an explanation of why they are seeing that particular ad and choose whether they want their data used to receive such targeted ads.

While the effort by the industry was no doubt to protect itself from more stringent standards, consumers do seem to appreciate the efforts, with conflicting results.

A study by Better Advertising, the company that powers the privacy icon technology, found 76 percent of consumers want to know what companies are behind the targeted ads, and 89 percent want to be able to choose which companies to opt out of.

But, only 0.0001 percent of those same consumers took the next step and chose the opt-out option offered by the industry.

A separate study conducted between privacy firm TRUSTe and Publishers Clearing House found similar results.

More than half of the users who saw the advertising privacy icon and clicked through said they found the notice helpful. But, again, just over 10 percent took the step to review their preferences, only 1 percent chose to opt out of the targeted ads and more than 40 percent chose, instead, to maintain their existing preference settings.

The disparity is something to bear in mind considering the spate of recent online privacy breaches, the bright spotlight on the issue and the fact that the online ad industry is such that it saw $12.1 billion in profits in the first half of 2010 alone.

So are consumers out to have their cake and eat it too, i.e. receive targeted ads from their favorite companies while they worry and fret over privacy? Or has the advertising industry failed its own mission and not sufficiently “advertised” the option and all that data tracking encompasses?

While consumers and Congress figure that out, the advertising industry has a clear take away from the first of what will surely be many studies to come in this debate.

“The pilot test data shows that consumers want to learn more about behavioral advertising but that only a small percentage, once informed, will change their preferences,” said Fran Maier, President of TRUSTe. “This low rate of preference change indicates that an effective ad notice may actually increase trust without any negative impact on advertising revenues.”

So, informing consumers that, yes, they are targeted and, yes, they are tracked is enough.

Tell us what you think. Do you understand the icon? Are you apt to opt-out?