The real consumer issue? Trust, not privacy.
Improved targeting is a key driver behind online advertising's recent growth, particularly growth in brand-driven advertising. Over the past three years, leading Web publishers such as Yahoo, Weather.com, USATODAY.com, and dozens of others have deployed sophisticated audience-targeting systems to optimize the inventory they sell to advertisers. Almost two-thirds of Online Publishers Association (OPA) members now offer behavioral and audience-centric targeting. These systems permit publishers to not only deliver more value to advertisers but also increase overall pricing as they make more efficient use of inventory.
Industry analysts, such as Gordon Hodge and Lloyd Walmsley of Thomas Weisel Partners and Youssef Squali of Jeffries, now predict Fortune 500 advertisers' demand for more sophisticated targeting will be a primary driver for increases in online media pricing and the shift of ad dollars from off- to online.
Nothing can slow this down, right? Or is this, as Yogi Berra once said, "dé;jà vu all over again?"
Earlier efforts in this sector were derailed by the elephant in the room: privacy.
Can privacy and targeting never coexist? Is it inevitable consumer privacy issues will derail publisher and advertiser efforts to improve the effectiveness and efficiency of online advertising through audience-centric targeting?
I think not. Here's why:
Privacy issues will be successfully addressed and eventually go away, but probably not before a few folks get burned for ignoring the issues listed above. I'm sure we'll see more tech-centric companies offer more tech-centric solutions to help consumers protect privacy. They'll either claim to be a trusted "Switzerland," as many others have, or deliver some new technological marvel to divine true consumer interest.
They'll capture our attention for a few moments, as their predecessors did, then vanish. It always works that way. The only answer is to use trust to win consumers' hearts, minds, and wallets. That will win the day.
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