Study Shows Privacy Policies on Different Tech Platforms Give a Hard Time to Advertisers to Manage their Ads
According to a new study from the University of Notre Dam, tech companies that remove their user data after some time are a big threat to advertisers. One of the examples of this is Google who started removing their user data if their account was inactive for 18 months. This was a move to preserve user data and privacy but this type of practices can limit ad variety. The study looked at how the designs to protect users’ privacy can have negative effects on the advertising industry.
The study focused on Multiple-Purpose Ads (MPAs) where different ads are present within the same space. When companies protect their user data, it results in fewer user engagements on ads and the click through rate of ads also reduces. Due to this, the ad varieties also decline and users cannot find relevant ads in MPAs. It is because the time ad companies get to target consumer data becomes shorter. When the companies look for user data in a short time, they cannot find many specific categories to target the users with relevant advertisements.
For instance, if a user has searched for men’s shoes, hiking and basketball within 14 days, advertisers won’t know which types of ads to show. If they show the ads in the same categories, the consumers will lose interest. If they get the exposure of different ads, there is a chance that it will strike consumer interest. The author of the study said that these kinds of things are important to consider if advertisers want to balance consumer privacy and effective advertising strategies.
The study looked at two additional policies which are related to ad variety. The first one was the economic impact of ad policies and how advertisers can incorporate clicks and bids according to consumer interest. The next one was how researchers can modify the reservation price in ad auctions. By making use of both factors, advertisers can make their ads effective and increase their revenue on different platforms. This research shows how advertisers should maintain a harmony between user privacy and ad effectiveness.
Image: DIW-Aigen
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