Data PrivacyTargeted Advertisements – An Invasion of Privacy?

TARGETED ADVERTISING INVASION OF PRIVACY

In the present world of internet, technology and smart devices, one can see advertisements everywhere. The traditional methods of advertising include billboards, magazines, newspapers, etc. that is visible to every person coming across them. The traditional method of advertising does not specifically target any individual or a group.

Organizations are now implementing smarter, digital advertising solutions to help them connect with their target consumers. The use of artificial intelligence, machine learning, data analysis and the intelligent interpretation of present and future buying patterns are becoming increasingly common among the organizations for advertising their products or services. These technologies are also important in providing customers with effective and customized advertisement (ad) experiences that link them with brands and companies.

With an increase in e-commerce and its share in the global retail sales, digital advertising is also changing. Global digital ad expenditure exceeded $491 billion in 2021 and is predicted to exceed $500 billion in 2022. This figure reflects the potential for development in paid advertising.

Ads may help organizations and brands engage with their target consumers. Ads are a key component of the user experience in most apps. Target advertising is a form of online advertising which focuses on consumer preference and targets their audience based on their internet cookies.

HOW DOES TARGET ADVERTISING WORK?

Every time we read an article on google before proceeding further it asks us to agree on certain terms and conditions. Ever wondered what it was? Have you clicked on the ‘agreed’ button when it asked you that a certain website is going to read your cookies?

Advertisers utilize data acquired about the user to target an audience that may be interested in a product or service being offered. This data might include both demographic and behavioral information. For example, if a user visits a certain product on a website, their browser will send this information to a third-party advertising network.

The user information is saved in a browser cookie, which is a fragment of code that displays sites visited by the user. Ads for the product seen on the first site may appear when the visitor visits some other website that uses the same advertising network.

Targeted advertising allows marketers to provide ads to customers that are tailored to their individual characteristics, interests, and purchasing habits. This is often accomplished by segmenting audiences based on criteria such as basic demographics, shopping preferences, or browsing activity, and then developing customized ads suited to each audience segment.

Targeted advertising is a vital tool for digital marketers and e-commerce firms to cut through the cacophony of ads that the internet users are continually exposed to, offering customized content where people will notice and engage with it.

Retargeting is another type of targeted advertising that improves ad personalization and encourages customers to continue down the conversion funnel.

INVASION OF PRIVACY

Online advertising generates significant money for organizations and is critical to the growth of free content and services on the Internet. As a result, increasingly complex ways for enhancing advertising efficiency have been created.

Online targeted advertising is watching Internet users’ online actions across websites and over time, inferring their interests and attributes (such as age or gender), and then tailoring adverts to them based on this information. Since its introduction in the 1990s, targeted advertising has rapidly evolved and now accounts for a large portion of web advertising.

The e-commerce industry has praised the approach as an effective marketing tool. Unfortunately, targeted advertising is frequently accompanied by privacy issues, as advertising corporations increasingly watch and analyze user activity that may contain very sensitive information including Sensitive Personal Data or Information (SPDI).

These data, if exploited by trackers or released to other entities, may cause bodily or emotional harm to users. Possible consequences include humiliation, pricing and service discrimination, and job termination.

Privacy problems, on the other hand, have ramifications for the advertising sector.

Invasion and other issues related to privacy weaken the consumer faith in the internet firms, and as a result, users may resort to anti-tracking or anti-advertising programmes as a solution, which is detrimental to the advertising industry.

Furthermore, despite significant time and effort spent dealing with privacy watchdogs and pushing privacy policymakers, the advertising sector continues to face negative legislation and law enforcement measures as a result of its monitoring activities.

Given the current explosion of privacy concerns, the sustainability of targeted advertising is only viable if this activity adheres to privacy regulations.

The difficulty is that any attempt to improve user privacy by limiting the collection of user data by organizations may also decrease targeting performance and, as a result, advertising income, which is undesirable from an economic standpoint. Addressing privacy issues thus poses diverse challenges from both a technological and economic point of view.

The following sections highlight two major technological challenges:

• Leaks of data in targeted advertising

To prevent trackers from exploiting user sensitive data, laws and regulations are rapidly arming privacy watchdogs with audit and law enforcement powers. Unfortunately, by their business operations, these trackers’ data may be purposefully or unintentionally disclosed to other companies.

Data leak may considerably increase the risk window for user privacy and hamper accountability enforcement. A continuous effort in analyzing privacy issues has become the need of the hour because of the rapid growth and increased use of sophisticated ad technologies.

• Lack of Short- term solutions

Recognizing privacy issues in a target ad and changing the use and storage of data is a short-term solution in this invasive web of target advertising. In order to completely curb cyber-attacks and invasion of privacy, it is necessary to enhance user privacy by having a long-term privacy-by-design approach.

Such privacy-by-design approach will then protect the user privacy via prevention rather than cure. One alternative path is to create a tailored advertising system that does not rely on monitoring.

TARGET ADVERTISING AND ETHICAL ISSUES

Considering the fact that the personal information of an individual is at stake and is likely to be used and stored by a third party for the purpose of advertising their products or services, there can be two opinions on whether target advertising is ethical or not.

Target Advertising can said to be ethical because it is the user who is giving permission and granting access to the cookies before using a website or an application. So when an individual himself consents for his/her data being stored and used, the practice cannot be said to be unethical.

However, there are certain websites and applications that ask permission from a user for its data ad when the permission for certain information is not allowed, the application or the website does not work in the user’s phone or browser. This can be considered unethical as the application or the website is mandating and forcing the user to provide information that the user does not want to share.

AMLEGALS REMARKS

Various incidents pertaining to privacy issues and target advertising are encountered on a day-to-day basis by almost all the individuals in this era of internet and technology.

Everything being looked up over the internet is being recorded in cookies and the SPDI has lost its characteristic of being personal after the introduction to the concept and operation of target advertising.

In order to prevent the personal information of an individual; ad blockers can be used with an aim to first, prevent the invasion of privacy by cutting out the ads and second, to restrain the organizations developing such targeted ads from entering into an individual’s personal information on any website or application.

The users need to be careful and should avoid permitting different websites and applications to use their information, microphone, location, etc. Addition of a single step of customizing the cookie preference to the daily routine of browsing the internet can save the SPDI of an individual.

The targeted advertising has a widespread reach on the minds of the users and is a very successful form of marketing; however, it should be used in such a way that this practice does not have a negative impact on the privacy or data of an individual.

-Team AMLEGALS, assisted by Ms. Pratishtha Vaidya (Intern)

For any queries or feedback, please feel free to get in touch with chaitali.sadayet@amlegals.com or mridusha.guha@amlegals.com