SUMMARY: Once again the media is failing to do its job when it comes to reporting on privacy issues around the Google acquisition of Fitbit. The reality is that the data does not have personally identifiable data such as name, age and street address. Adlucent research found that consumers crave a personalized advertising experience and that 71% of respondents prefer ads tailored to interests and shopping habits. But do consumers understand what data is actually collected?
Politicians and privacy campaigners have called for Google’s $2.1bn deal for Fitbit to be blocked, over fears that the search giant will feed its growing healthcare business with the data of the 27m people who use Fitbit fitness trackers. But would that be so bad? Do people who don’t walk too much want ads to remind them of the benefits of exercise?
Google’s takeover, if it is passed by regulators, gives Google access to a huge trove of heart rate, activity, and sleep data which it could use to create a new range of personalized health services. In other words if you are shopping for diabetes supplies you’re going to see ads for new diabetes medications which could lead to better healthcare choices.
As most publishers have known for years, ads based on data that relate to consumers’ interests sell for a premium and have paid the bills in digital. It’s really that simple.
Consumers Lead and Marketers Follow
Research shows over and over again that consumers prefer a more personalized digital experience. Just according to one recent study, “90% of consumers say that messages from companies that are not personally relevant to them are ‘annoying.’ Of those irritating messages, 53% say advertising for an irrelevant product tops their list of messaging annoyances.” Each of us knows what the online experience once was, and how irritating it can be when what we see isn’t relevant.
As interest-based advertising has taken hold as a dominant advertising trading practice in digital, advertising revenue in digital has soared. Over the last 10 years, the compounded annual growth rate of advertising revenue has been an average of 16.8%, on a base of billions of dollars, per the IAB Internet Advertising Report, the full year 2018. Drilling it down to what publishers are earning, a study by Johnson et al. showed a 40% gain in publisher revenue due to targeting, a notion also supported by Beales and Eisenach.
A recent study from Salesforce shows marketers, like publishers and tech companies, are getting the message that they have to be better at relevance and privacy while not abandoning us all to a digital experience that is exasperatingly irrelevant: “More than half (51%) of marketers say they’re more mindful about balancing personalization and privacy than they were two years ago.” But of course, getting it perfect isn’t easy and “[o]nly 30% of marketers are completely satisfied with their ability to balance personalization with privacy.”
What we really should be afraid of is the possible breach of data and that some tech companies may match health data with personally identifiable information (name, age, address). Who’s to say that a potential employer, in the future, couldn’t acquire health information, for example, on job candidates? Could insurers use this health information to deny coverage or raise your rates?
But when consumers are asked about the data collection practices that empower personalized ads, they tell a different story.
Network security firm RSA found that just 17% of internet users surveyed in the US and Europe said it was ethical to track their online activity for the purpose of personalizing ads. Only 25% thought it was ethical either to tailor news feeds or make purchase recommendations based on browsing history. However, I would argue that consumers don’t understand what data these companies collect (i.e. no personally relevant info).
As healthcare continues to battle for consumer dollars, it’s clear that the way to win is through personalization. Consumers expect content that is both useful and contextually relevant — the right information served at the right time and they want free sites. The media needs to do a better job explaining exactly what data is collected and how it’s used.