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Online Advertising and Privacy Survey Shows Consumers Hold Strong Preference for Targeted Advertising
[September 09, 2004]

Online Advertising and Privacy Survey Shows Consumers Hold Strong Preference for Targeted Advertising

TUCSON, Ariz. --(Business Wire)-- Sept. 9, 2004 -- Consumers Willing To Provide Personal Information for More Relevant Ads but Want Privacy Too

At a time when consumer frustration over online ad clutter is at its peak, a new survey found that a majority of people would view banner ads as less intrusive if they were more relevant to their specific areas of interest.

Conducted by the Ponemon Institute, a research institute dedicated to privacy management practices in business and government, the survey of more than 1,000 people revealed that consumers prefer banner ads that are relevant to their needs and interests by a 2 to 1 margin over those that are not relevant, with 52 percent of those polled saying that they would be more likely to click on targeted ads than on others.

The 2004 Survey on Internet Ads, co-sponsored by Chapell & Associates and Revenue Science, also found that consumers want stronger privacy measures in conjunction with providing the information that will enable more relevant ads. Although 45 percent of respondents said they would be willing to provide additional personal information if it meant they would receive more ads targeted to their individual interests, 55 percent showed a preference for technology that allows targeted ads without collecting personal information. Moreover, 69 percent favor the use of privacy enabling technology to prevent misuse of sensitive personal data, rather than third-party verification of "good" privacy practices.

"Consumers want more relevant ads, and many consumers are even willing to part with their personal information if that helps to enhance their online experience," said privacy expert Alan Chapell, president of Chapell & Associates. "But overall, consumers would prefer using a privacy enabling technology over other methods in order to increase relevance and reduce ad clutter."


A Call to Ban the Banner

The study also found strong anti-banner ad sentiment among consumers. Nearly 60 percent of respondents said banner ads were "always annoying"--a frustration level just below that exhibited toward spam and telemarketers. Forty-four percent went so far as to say that unwanted Internet ads should be banned by law. However, a majority indicated that they are unwilling to pay for ad blocking services or online content to stop such ads.

"It shouldn't be surprising that consumers' economic interest outweigh their dislike of advertising," said Dr. Larry Ponemon, founder and chairman of Ponemon Institute. "What is surprising is that a large number of consumers are looking for ads that are more relevant to their interests. This really goes against the conventional wisdom and shows that it is the irrelevant content of ads rather than the ads themselves that consumers object to."

Ads Prove Effective

The study revealed that, seven percent of respondents said that they had made a purchase or engaged in a service based on a banner ad--an impressively high success rate.

"Although online advertising continues to grow at a significant rate, marketers are still searching for an approach that is both effective and agreeable to consumers who are bombarded by advertising messages and concerned about privacy," said Omar Tawakol, SVP of Marketing, Revenue Science. "The results of this study provide strong evidence that more relevant ads present an enormous opportunity for marketers to run more effective campaigns. Once consumer privacy issues are addressed in a meaningful way, online ads will fulfill their true potential."

The survey portion of the study consisted of a Web-based questionnaire because the topic area (Internet ads) is only applicable to an Internet audience. A fixed cluster sampling plan was used with two pre-selection criteria: (1) individuals must be at least 18 years of age and (2) individuals must have daily access to the Internet either from home computer, business computer or both.

Complete survey results and additional information on the methodology applied to the study are available at www.revenuescience.com/privacyreport.

About Ponemon Institute

Ponemon Institute is a "think tank" dedicated to advancing responsible information management practices in business and government. To achieve this objective, Ponemon Institute conducts independent research to promote best practices, to educate leaders from the private and public sectors and to verify the privacy and data protection practices of organizations. The Institute is headquartered in Tucson, Arizona. For more information, visit www.ponemon.org or contact (520) 290-3400.

About Revenue Science, Inc.

Revenue Science, Inc. is the leader in behavioral targeting for Web advertising. Revenue Science grows ad revenue for Web media publishers by finding, evaluating, and delivering customized Web audience segments that represent prime customer targets for advertisers. Revenue Science audience segments are delivered on-demand, over the Internet, and priced on an exclusive performance driven basis that completely eliminates risk for customers. The company's primary clients are leading Web publishers including The Wall Street Journal Online at WSJ.com, Marketwatch.com, Reuters.com, FinancialTimes.com, ESPN.com, and Kelley Blue Book; and advertisers include Fortune 500 companies from technology, telecommunications, healthcare, travel, finance and many other industries. For more information, visit www.revenuescience.com.

About Chapell & Associates

Chapell & Associates is a premier research and consulting firm focusing on privacy marketing. Chapell & Associates' mission is to help companies develop privacy and data collection practices that balance customer needs against business, legal and technological challenges. We accomplish these goals by conducting research on consumer perceptions, developing privacy compliant corporate practices, and evangelizing the privacy value proposition. Chapell & Associates is based in New York City. For more information, visit www.chapellassociates.com or contact (212) 675-1270.

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