Consumers Less Sophisticated with Online Ads than Industry Assumes

Along with a recent survey by University of California- Berkeley and University of Pennsylvania researchers who found general hostility to targeted ads (WID Oct 1 p9), the Carnegie Mellon study could shape lawmakers’ attitudes toward the industry’s own efforts. House Communications Subcommittee Chairman Rick Boucher, D-Va., has promised to introduce an Internet privacy bill that would further regulate ad practices. The Communications and Consumer Protection subcommittees will hold a joint hearing Thursday on offline and online information collection and use practices. NAI Executive Director Charles Curran told us the industry is working on better education efforts, including step-by-step videos.

The Carnegie Mellon survey fills in the blanks on the earlier Berkeley study, done via standardized phone interviews, by probing how people came to their views on Internet advertising, McDonald and Cranor said. The interviewees -- eight women and six men evenly split between adults under and over age 30, and all “professionals” -- “were not informed this study had to do with behavioral advertising privacy, but raised privacy concerns on their own, unprompted,” the report said. The researchers are still analyzing a “rich qualitative data set” and will update their preliminary findings later, and also hope to do a larger survey to gauge the general population’s views.

Internet users are stuck in the Web’s early history of advertising if the survey responses are any indication, the report said. Interviewees identified several types of advertising as “pop-ups” and said spam was part of the category, though a few cited Google AdSense by name because they themselves or friends used it. All explained correctly how Google AdWords works, possibly an indication that consumers aren’t confused by sponsored ads for competing brands triggered by a trademark keyword, a legal headache for Google. “This is a surprisingly sophisticated understanding” of contextual ads, the report said.

But interviewees also largely misunderstood that text ads scattered across a sample New York Times Web page were in fact ads, perhaps because readers associate graphics with ads in print, the report said. That shows a core flaw in the self-regulatory scheme, which assumes Internet users can distinguish first- from third-party ad providers -- and consequently assigns fewer guidelines to third-party widget providers. Only one person answered correctly that cookies include a unique identifier, and most confused cookies with browser history, perhaps because they said they deleted both at the same time. Interviewees held diverging and incorrect views on what cookies actually do, with some believing they store sensitive data and others calling them a form of malware. Of the three who identified cookies as enabling personalized ads, two said such ads weren’t worth getting because of the privacy risks in cookies, and the third mistakenly believed sharing even anonymous information was either illegal or barred by “cultural norms” in the U.S.

Advertisers seem to have made headway in convincing consumers that ads are “necessary” for Internet content to remain free, the report said. Interviewees largely saw them as a “fact of life” and sometimes beneficial to learn about new products or offers, but they only associated good things with contextual advertising, not behavioral targeting. “Even when they had scathing remarks about bad experiences, on the whole they understand and accept” the online model. But ad practices, content, lack of regulation, targeting and privacy “surfaced in the first few minutes” of responses to the researchers’ open-ended questions, the report said.

Opt-Out Cookies Unknown; Mechanism Misunderstood

The permanent opt-out regime devised by the NAI and enabled by third-party browser plugins, such as the Targeted Advertising Cookie Opt-Out, was foreign to the interviewees, the report said. Of the four who were shown the NAI opt-out, only one understood that advertisers could still collect browsing habits and build a profile but simply not provide targeted ads based on that information. One even thought the opt-out mechanism was a “scam.” But browser makers are at fault for confusing interfaces as well, the report said. Mozilla’s Firefox, for example, puts the options for cookies and history together, and browsers in general don’t give any notice of or access to Flash cookies, which can “respawn” deleted cookies.

“Informed privacy decision making is not something the free market is solving,” as demonstrated by users’ confusions over cookies, the report said. Ad providers assume that there’s no concrete harm to targeting, though one interviewee described “withdrawing from online life as a result of privacy concerns,” and despite the fact that users can learn sites’ privacy practices only by reading lengthy, confusing policies.

Participants in the survey may have responded differently had they seen NAI’s recent step-by-step video explaining targeting, NAI’s Curran said. The group earlier this month also released a beta version of the Consumer Opt-Out Protector add-on for Firefox, developed in cooperation with member BlueKai, which protects opt-out cookies from deletion and shows users how to manage opt-out cookies. It’s working on versions for other browsers. But Curran said the survey’s findings weren’t necessarily definitive. “There’s a broad range of findings depending on methodology,” he said, citing a Harris Interactive survey last year that found most consumers were comfortable with targeting as long as it had privacy protections.

“We understand that consumer education is something we've got to be working on” and explaining better how technologies work, such as through its online campaign of educational links and videos launched this summer, Curran said. It supports “enhanced notice” of targeting practices such as within ads themselves, but that’s a “work in progress” because the industry has to design the new formats, such as small icons and text links in or near ads in testing by Google and Fetchback, he said. Browsers also offer “pretty elaborate cookie controls” but the industry hasn’t worked closely with browser makes to give those options more visibility, Curran said.