Personalized Ads: Friend, Foe or Creepy Stalker?

Media Industry and Consumers  Trust 

We’ve all had the experience of searching online for a product — be it the latest iPhone, cool cargo pants or a used washer. Then suddenly, every time we open a webpage, we’re blasted with ads for iPhones, cargo pants and washers in a kaleidoscope of colors.

Thanks to personalized ads, companies know our preferences better than our cousins, and while our data is gold for advertisers, many find this practice creepy and downright stalkerish.

According to the Pew Research Center, nearly 80% of Americans don’t trust social media or CEOs to handle their data responsibly. Today, nearly every website you visit, asks you to choose your cookie preferences. While now commonplace, opt-out options are relatively new.

Won-Ki Moon, Advertising assistant professor at the University of Florida College of Journalism and Communications, and his colleagues wanted to find out how consumers really feel about this practice when transparency is factored in. Does being upfront about data collection make people more comfortable with online behavioral advertising, or does it just remind them of how much they’re being tracked?

Study participants were shown various versions of privacy policies and disclosures related to behavioral advertising, and their perceptions of trust, privacy invasion and ad effectiveness were measured.

The results of the study suggest that transparency does not necessarily build trust. While companies claim that clearer privacy disclosures reassure users, the research found that transparency can backfire, making consumers more aware of the extent of data collection and less comfortable with it.

Interestingly, while some participants appreciated detailed privacy policies, a significant portion became more resistant to personalized ads when they fully understood the level of tracking involved. This suggests that discomfort with behavioral advertising is not just about secrecy — it’s about the nature of data-driven targeting itself.

“Our research sheds light on the positivity of transparent privacy policy of privacy policies,” the authors write. “To balance securing consumers’ rights for privacy and improving advertising effectiveness, policymakers can encourage digital marketers and website developers to proactively disclose their privacy policy.”

Personalized ads are unlikely to disappear, but with increasing pressure for regulation and consumer control, the industry may have to rethink its approach. Whether companies shift toward less invasive contextual advertising or simply refine how they present tracking policies remains to be seen. What is certain is that as long as data remains the currency of the internet, advertisers will continue finding ways to follow us — whether we like it or not.

The original paper, “Is It Transparent or Surveillant? The Effects of Personalized Advertising and Privacy Policy on Advertising Effectiveness,” was published online in the Journal of Interactive Advertising on December 11, 2024.

Authors: Sangwook Lee, Won-Ki Moon and Greg Song.

This summary was written by Gigi Marino

Posted: January 28, 2025
Insights Categories: Media Industry and Consumers, Trust
Tagged as: Personalization, Transparency, Won-Ki Moon