I recently had the opportunity to speak with Russell Glass, CEO of Bizo, at DMA Days in New York City. Our session titled “How Transparency Will Reshape Online Advertising” was well attended and highly interactive with questions at the conclusion. We spoke about the fact that online spending has not increased in relative proportion to online media consumption. According to Google, U.S. users spend 12 hours online per week, about 32% of their media time, but online advertising comprises only 13.6% of spend. We concluded that there are three core reasons as to why this phenomenon is occurring: (1) brand safety, (2) privacy concerns and (3) ads “apparently” not working. We then proposed three possible solutions and opened the floor to candid discussion around these solutions and others: (1) measurement, (2) full transparency and (3) ad disclosure.
We spent a good deal of time and interactive conversation on ad disclosure, especially the new “AdChoices” icon that has been implemented on all Yahoo ads. AdChoices offers a menu of additional information, enabling users served a particular ad to learn more about the ad. The additional information contains details such as who placed the ad, where to learn more about ad selection and what choices are available for Internet-based advertising.
We cited a study from the Ponemon Institute in January 2010 titled “Behavioral Notices Study, Future of Privacy Forum” that indicated that applying transparency and choice increased the percentage of those who were comfortable with behavioral advertising from 24% to 40%, a 37% change. The same study also found that approximately 30% are neutral about behavioral ads with or without transparency and choice. Related to campaign effectiveness, we cited another Ponemon Institute study from May 2010 called “Economic Impact of Privacy on Online Behavioral Advertising,” indicating that 98% of companies surveyed have restricted online behavioral advertising because of privacy concerns; however, 63% of companies surveyed rated online behavioral advertising as their most effective form of marketing, an untapped opportunity.
We concluded with a series of Q&A around online behavioral advertising as well as transparency in measurement, and we agreed that these topics are very much in their infancy stages. Thus, we are braced for the roller coaster that we will inevitably ride.
Frannie Jaye Danzinger
Senior Vice President – Media