In an algorithm-driven market where users inadvertently leave traces of their online activity, social media companies have started incorporating novel advertising forms into their business models. Remarkably, Online Behavioural Advertising (OBA) has gained relevance, a practice where people’s online behavior is monitored, and their data is employed to send them targeted advertisements. In the context of social media, however, a common form of OBA is ‘Retargeting’, where social media users are deliberately targeted through algorithms with online ads containing personalized content based on their previous online searches or visited websites.
By these means, advertisers are seeking to maximize the value of consumer-generated data. Yet, as highly adaptive markets become increasingly skeptical about advertising practices – especially among young audiences who are becoming more self-conscious about their online activity –, the effectiveness of retargeting can arguably be more nuanced.
A short story of retargeted ads
Say, it is summer and someone is looking for a new pair of sunglasses. For any Instagram user who has clicked the link in the bio of a store’s profile to search for ones, it would not be a surprise to be swiping stories later, and finding advertisements of the same (or alternative) store promoting this same specific product: sunglasses.
When we think of retargeting, Instagram’s sponsored ads in stories are just an example of how the advertising industry is now personalizing ads by “reach, video views, traffic, conversions, app installs and brand awareness”. But the key remains on a user’s earlier search behaviour. When someone searches for a specific product or social media account, this specific online behaviour is immediately recorded, and further tracked down. Users here will be bound to receive in the future sunglasses ads, especially if this behaviour becomes more consistent in their daily usage.
When the costs outweigh benefits
A retargeted message could be regarded as a privacy intrusion.
Considering how retargeting makes use of personal information to tailor advertising, people may also perceive the use of this sensitive information as threatening. This is especially true in the case of young users, who tend to be more technologically savvy and are becoming increasingly aware of the issue of online privacy. Arguably, by becoming conscious of their browsing information being employed, a retargeted message could be regarded as a privacy intrusion.
When we assess any information that is given to us, we tend to rely on cues – especially if we do not have the ability or motivation to elaborate on our thoughts about a product. One cue that could be used is the privacy calculus, where we assess benefits and costs on privacy of personalization. The threat that lack of privacy entails outweighs any benefit that retargeting could provide, having a backfire effect on the product that is being advertised. Unlike the ‘privacy paradox’, which suggests that young adults perceive online privacy as crucial, but take no action to protect it, perceiving a threat to our privacy could thus become a trigger to take action to counter it. Here, examining retargeted ads in a more skeptical way would be such a response.
Retargeting and the privacy issue
Retargeted advertising could trigger more skeptical processing of advertisements due to our privacy concerns. Privacy concerns involve consumers sensing a low control over the personal information companies collect about them, and this is precisely a cue they would use to develop negative impressions about the information we receive. At a young age, individuals are prone to skeptically cope with communication such as advertising, since, in comparison to older people, youngsters are slightly more concerned about the misuse of their personal information in popular platforms like social media. By feeling their freedom of choice is compromised, skepticism would be a coping strategy that youngsters could use to recover their freedom, thus resisting the use of their private information in the personalized message, as posed by the ‘personalization reactance theory’. This skeptical elaboration is what ultimately would be translated into negative advertising responses, such as ad avoidance and reduced purchase intention, as seen in studies about Facebook advertising.
The more personal, the more vulnerable
It becomes apparent that the effects of retargeting are two-fold. The more personal an advertisement is to our tastes, the more we may find the product advertised relevant to our needs or wants. On the other hand, we might increasingly question what is happening with the information we are generating online. It is true that social media now displays retargeted ads under the premise that it may enhance their advertising strategy effectiveness. However, this deviates from its original purpose.
When it comes to people feeling vulnerable, this way of coping with ads can be explained by the ‘psychological ownership theory’. Psychological ownership occurs when people sense they have ownership over external forces (e.g. the decisions that affect them). For instance, if youngsters become aware of how they have lost ownership over their data, and have no voice in how their browsing information is being used by advertisers, this could ultimately trigger a negative affective response towards retargeted ads in order to regain such control.
By feeling vulnerable – especially under the notion that advertising works under commercial incentives – people may negatively react to a loss of their privacy, regardless of whether the products they are receiving are relevant for them at the time. As retargeted advertisements reflect users’ online behaviour with their more accurate personalization of ads, young users may therefore be confronted with a persuasive attempt that makes them feel more vulnerable. This vulnerability is undesirable, and ultimately may decrease their intention to click-through on any advertisement.
Are retargeted ads really effective?
Retargeted ads are not necessarily more effective than non-retargeted ones, since social media users may feel increasingly vulnerable with their personal information being used by advertisers to their convenience covertly. Feelings of vulnerability occur when individuals sense a lack of control over an occurrence, and this includes the subtle collection of their information on social media. Reflecting the clear power imbalances between consumers and advertisers is certainly undesirable, especially by realizing that advertisers hold power over the use of their information to persuade them – usually, without explicit consent or knowledge from consumers.
As posed by the personalization paradox, personalization in advertising can have both positive and negative effects on advertising responses, where more relevant ads paradoxically evoke undesired feelings of vulnerability – in this case, among young social media users. In the end, an intrusion of privacy in those who perceive it as a major concern could result in a boomerang effect, which is something that advertisers – in their pursuit to drive more sales – should take into account. After all, the practice of retargeting should be used more wisely and responsibly, and this is something advertisers may certainly want to reassess.
Edited by Emma Chiaratti