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The pros and cons of Interest-based advertising

Photo: MGN Online

Photo: MGN Online

Internet-based advertising (IBA) has taken has taken hold as the go-to method for delivering targeted, personalized advertising to consumers across media platforms. Whether on a tablet, desktop, laptop, or smartphone, consumers are served ads based on their surfing and click through habits. This boon for businesses allows them to advertise to consumers who are interested in their type of product or service.

However, there is a downside to interest-based advertising – potential loss of privacy. Take a look at the pros and cons of interest-based advertising and decide whether you are all in or want to opt out.

Pros:

For Consumers –

  • The user/consumer experience is much cleaner and more focused with fewer unwanted ads.
  • Consumers gain access to real-time deals on desired products and services.
  • Consumers are served deals based on past choices. For instance, through IBA, businesses can determine which ad a consumer clicked on for a product – like %-off, BOGO, or Free Trial – and then serve the same type of ad for other products.

For Businesses –

  • Businesses get a higher click through rate on their ads – a much sought after commodity. In addition, the consumer is already a warm lead.
  • Internet-based advertising is designed to integrate with the style of the webpage, for each ad served to it. This type of ad performs much better than other types of online ads and does even better in mobile media.
  • By tracking aggregate surfing and click through data, businesses can gather critical information on the interests and choices of consumers in their industry. This is valuable marketing intel for any business.

Cons

  • Privacy takes a hit. Privacy is top of mind for most consumers who want demand assurance that their personal data is secure. “In one poll, ninety-one percent of respondents said they wouldn’t do business with companies that they believe do not protect their privacy.”
  • Dependency on app developer or advertising firm with IBA capability. Businesses should be careful when hiring and app developer or advertising firm that offers IBA as a service. Be sure to inspect their privacy policies and understand how they protect customer data from falling into the wrong hands. Be sure to “follow industry standards… the digital advertising industry has crafted a set of robust, evolving self-regulatory standards that companies should follow.”
  • Among other guidelines, a consumer should be given the opportunity to opt-out of any interestbased advertising promotion or service.
  • High cost per click.
  • While interest-based advertising is free to consumers, businesses pay for this service on a cost per click basis. As we have seen with Google AdWords, high-demand key words come at a premium, so too does IBA. The more targeted and qualified the consumer, the more it will cost a business.

Source: Interest-Based Advertising, bbb.org

To learn more, check out Interest-Based Advertising by Genie Barton and Jon Brescia.

To report a scam, go to the BBB Scam Tracker. To find trustworthy businesses, go to bbb.org.