Precious Osoba is a junior behavioural analyst at Canvas8. Fascinated by the hows and whys of people and culture, she has a background in social sciences and a degree in marketing. You can often find her in aesthetically pleasing restaurants writing articles for her Medium profile.

Aware of hidden agendas, people no longer believe in the possibility of absolute truth or complete transparency from institutions, public figures, and individuals. Yet they are still drawn to honesty, integrity, and – at times – even vulnerability, which they expect from peers and brands alike.

Radical Transparency 

In February 2021, Facebook launched a campaign called ‘

’ that highlighted the impact that personalized Facebook ads have on small businesses. During the pandemic, small businesses relied on social media and personalized ads more than ever to stay afloat, and Facebook is using the empathy people have extended towards small businesses to encourage people to be more open to targeted ads. The campaign comes ahead of the introduction of App Tracking Transparency, a soon-to-be-introduced iOS 14 feature that will require apps to ask for permission before tracking their data to serve personalized ads, and Facebook is hoping it can convince people to opt in.

Through 2020 and 2021, the pandemic has forced us to increasingly rely on our smartphones to stay connected, but we have also become more skeptical of our devices and their potential to unknowingly collect private information about us and share them with third parties. Indeed, 

of people say that they’ve decided not to use a product or service because of worries concerning how much personal information would be collected about them. And 

 of people have switched to a competitor who they think has better data policies – we saw this when people 

. Major concerns seem to lie in the sharing of personal data across platforms for 39% of people – and to avoid this, 44% would go as far as opting out of personalized content. After all, only a third of people believe that sharing their data has made a significant improvement to their lives – instead, 63% believe companies are the biggest benefactors.

To unpack the problem of unpermitted data sharing online, researchers have looked to offline communication norms. There are parallels between the social norm of not talking behind someone's back and online data sharing. Dr. Tami Kim, researcher and author of ‘Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness

there are conversation norms that we follow in day-to-day life, which we're all very aware of. But when it comes to online settings advertisers often forget about potential downsides of engaging in these types of [intrusive] practices.” Canvas8 spoke to Dr. Tami Kim to understand when and why people might feel negatively about targeted advertising.

Why is this topic important to understand?

Generally speaking, consumers can be naive but they're becoming more and more sophisticated when it comes to understanding how their data is being used. There's an increasing trend of consumers thinking everything about them is being tracked these days. I'm sure you've had an experience that seems as though all your devices are hearing and listening in because you're getting very specifically relevant ads, very tailored to your needs at that very moment. So, with that increase in concern, there's a bigger demand for transparency and just greater knowledge behind how these things actually work, especially given the complexity. People are also very scared of how their data is being used. So, with all these different forces combined, there's a bigger demand for transparency, and that was what pushed us to study the effects of transparency.

A lot of advertisers are looking into making their ad practices transparent and there are multiple different mechanisms that have encouraged advertisers to do this. For instance, Facebook has made its ad practices transparent so advertisers are forced to engage with Facebook's ad practices. However, there are a bunch of legalities and regulations that are being introduced regardless of whether or not advertisers want to engage in greater transparency. Within the context of our research, transparency refers to advertisers or ad platforms, revealing why consumers are seeing certain ads over others. For instance, on Facebook, where you can scroll through different ads that you see, if you click on ‘why am I seeing this ad link?’, it'll tell you you're seeing this ad because you shared your information with Nordstrom, for example.

There are varying degrees of transparency. One dimension is whether an ad is based on the information that you've stated about yourself versus information that another party has inferred about you. So those are the two extremes of the transparency dimension that we explore. By way of example: are you seeing an ad because you’ve stated your age as 30 on your Facebook profile, or is Facebook inferring that you’re in the late 20s or early 30s based on your user activities or web-browsing activities? Another dimension that we explore in our paper is what we call ‘within versus cross-platform activities’. So, is Facebook, for instance, showing you an ad based on the activities that you engaged in within Facebook, or is there any cross-platform sharing going on where Facebook is gathering information about you from third-party providers? The key aim of our research was to understand the effectiveness of varying levels of ad transparency and then, what consumer expectations are of these practices. What are the appropriate uses of their data? How do they feel about their data to be used for producing ads?

Some people see data collection as a trade-off for better services

How did you go about conducting your study?

We used a combination of online studies, field studies, and controlled lab experiments. What we've tried to do is identify different types of advertising practices based on all the ad practices that are out there. The first study lays the groundwork for the rest of our research and the intention was to collect different types of practices that ad platforms and advertisers engage in and then have people rate the extent to which they find each of the practices to be acceptable. We then ran it through factor analysis, which allows us to identify different big dimensions that pop out of people's responses. What we got out of this first study is the validation behind our two dimensions – whether an ad is based on stated or inferred information.

Then we ran a series of experiments to see whether the dimensions that were identified actually do predict consumer reactions. We created different websites and different surveys to try to isolate and determine the effect of each of those dimensions. Once we'd identified the positive and negative effects of that transparency, we delved into field experiments where we only took the appropriate dimensions and highlighted them when people got product recommendations.

The purpose behind the second and third studies was to highlight that people don't like it when you decide to produce ads based on unacceptable information flows. Which, if you compared those practices or the day-to-day conversation norms, it's quite clear that people wouldn't like it. The final study in the paper is looking at the role of trust. We had people log in to their Facebook accounts and just grab an ad and the reason behind why they're seeing certain ads on their actual Facebook accounts. They categorized them based on what kinds of ad practices the ad was based on and correlated that with their preferences for the ad.

Americans want more control over how their data is collected

There has been a lot of literature showing greater personalization does better, but we come in with a different perspective. Yes, personalization is great, but in the absence of that transparency, consumers don't really know how exactly they're being targeted. So, there aren't really privacy concerns that are being triggered. But now with ad transparency, there are two things that play on consumers’ minds; ‘OK, this product is personalized for me, but should I also be concerned about my privacy and how my data is being used?’ So that's where we come in the literature to provide a more nuanced view behind the benefits of personalization.

Our findings show that not all types of transparency are good, but that doesn't mean that brands should selectively choose what to be transparent about versus not. What's important is to delve deep into actual existing practices, and make sure that they are appropriate. So that when brands engage in transparent practices, they're not leaving some consumers upset. We also found that when people see ads that are based on information that has been stated versus inferred, or based on activities within the same platform that they're seeing an ad versus that ad being served based on cross-platform sharing, they're more likely to trust the advert and click on it. This enhances people's click-through rates.

We're seeing some sort of a halo effect. As a consumer, there's a platform on which ads are being served and then there are advertisers that decide to serve those ads on the app platforms. But what we are seeing at least within our set of studies, is that people tend to clump them into the same bucket, despite the fact that the reason it's being produced by the platform itself, their reactions tend to concern both the platform and the advertisers themselves, rather than differentiating between the two platforms or between the two parties. what that means is that the platform and advertisers share the responsibility when it comes to engaging in transparent practices, and what types of practices that they should engage in.

People want a better understanding of how and why their data is collected

A lack of education leaves people fearing eavesdropping

“When customers already trust the platform, and you're engaged in acceptable information flows, you can exponentially increase people's positive reactions to you,” says Dr. Kim. Indeed, people are skeptical about their data being collected – 

 of Americans oppose companies tracking their behavior online to serve targeted ads. But with 

 saying they feel very little or no control over the data collected about them by companies – and 59% saying that they understand very little or nothing about what companies do with their data – there’s a real lack of education in the purpose of data tracking and advertising from the consumer perspective. It’s a fine line to tread – particularly in an era of 

 of how their data is used online, there’s value in companies highlighting some positive benefits of these practices – like improving 

Removing a sense of intrusion through transparent education

The challenges in this space become particularly complex when advertising cross-platform. With research finding that 

 of people prefer not to be tracked between sites and apps for relevant ads – instead, they’d be satisfied with receiving generic ads that are not based on personal interests. As Dr. Kim explains, this cross-platform pollination of data can be likened in the offline world to gossiping – which is why people often feel it appears intrusive. To resolve this sense of intrusion, people need a better understanding of how, where, and why their data is being used – and 43% say they would be more willing to accept being tracked if an app is upfront about the data collected and the application of that data. It’s why the notion of privacy ‘

 adopting this development on the App Store.

People are willing to make compromises for cash

Many people are accustomed to making sacrifices – either with their data or with money – for a particular experience when online. For example, platforms like Whatsapp, Twitter, and Instagram are all free to use, but only because they operate on an ad-based model. And with 

 of people preferring to allow data tracking than pay for content or features that are currently free, it seems to be a compromise people are willing to make. Acknowledging that some people would prefer to pay a premium to avoid ad tracking, NBC is introducing 

. It’s a streaming service that ranges from free to $10 depending on how many ads the user consents to see. This control over choice is something that looks to resonate – indeed, just over half (

) of Americans would be more willing to watch an ad “on every other episode of a show” if it meant they paid less monthly.

Aside from the ad itself, there are other factors that play into people's perceptions of this content. The type of device can impact attitudes, too. For example, two-thirds of people (

) find auto-play video ads with sound to be the most annoying type of advert on websites, which is still true for desktop users alongside pop-up ads and prestitial ads with a countdown. Whereas on mobile, this changes to include full-screen scroll-over ads, flashing animations, and pages with more than 30% ad density. The size of the screen undoubtedly affects the online experience, so there’s an opportunity for brands to tailor their advertising by considering the type of device used for maximum effectiveness.

 of people say they feel very little or no control over the data collected about them 

 of people say they would be more willing to accept being tracked if an app is upfront about the data collected and the application of that data 

 of Americans oppose companies tracking their behavior online to collect personal data to target ads 

People are largely unaware about how brands collect their data or what the brands use data for – indicating a large opportunity for education

Brands tend to break social norms when collecting data online, whereas people perceive online interactions as similar to offline interactions – likening collecting data to eavesdropping

People are largely against ads unless there are options to compromise, for example offering a free service powered by ads or opting to pay for an ad-free premium version

Dr. Tami Kim is a researcher and assistant professor of marketing with the Darden School of Business at the University of Virginia. Her research focuses on transparency, implicit contracts, and consumer empowerment and she co-authored ‘Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness’.

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Balancing privacy concerns with optimal experience has been a challenge for digital marketers. But when or why are ads seen as more acceptable by consumers? Canvas8 spoke to Dr. Tami Kim, assistant professor of marketing, to understand why people feel negatively about targeted advertising.

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