Mobile advertising key challenge: Customers’ privacy issues
Mobile devices are heavily used for data and internet access and are emblematic of trend towards the convergence of capabilities. According to PwC research, 54% of mobile phones globally will be used to access the internet by 2017.
This translates into an inescapable fact: mobile devices have become the most personal of personal computers. This creates an opportunity for companies to better connect with current and target customers. Mobile devices offer the ability to reach prospects – and later, consumers – through a device that customers carry with them at all times, and has the ability to track presence, location, preferences, activities and even behavior.
Mobile advertising both designed to be seen within apps and on mobile websites, is an increasingly relevant option to reach those mobile users. Furthermore, this persistent connectivity and insight into users allows for unprecedented capabilities: the ability to use reporting and ‘data analytics to personalize and customize advertising content in real-time.
Mobile advertising can use emerging technologies to create targeted messages that eventually become less intrusive and more useful. Thanks to mobile technology, sales and marketing executives now have a conduit into consumers’ virtual calendars and physical locations, amongst other data, to target them when they are more likely to consider or make buying decisions. Executives can also take advantage of another major trend, that of social media, in order to understand explicit and implicit consumer preferences in more detail. Content and technology providers in this space also have the opportunity to target their products into narrow demographic micro markets across mobile and other formats. Both groups can leverage the mobile format to create compelling and valuable experiences, thereby increasing the return on investment for advertisers.
Although there are significant opportunities in mobile advertising, there is also a potential downside: the concerns over privacy that make many consumers hesitant to provide personal data to companies.
A fundamental challenge facing mobile advertisers and publishers is improving mobile based targeting. Consumers willing to share information is varied; less than 50% of those willing to share information were inclined to provide an e-mail address, among other items (see figure 1).
Figure 1: Degrees of willingness to share personal information
The highly personal nature of mobile devices tends to heighten consumer sensitivity about privacy and consumers feel intruded upon when they receive pseudo-personal (and sometimes inaccurate) mobile promotions. Instead of enticing customers, poorly targeted advertisements may reduce consumers’ aggregated trust of all mobile advertising and limit their willingness to share information that would result in more relevant targeted advertisements.
Consumers willing to share information and enable more specific targeting – including permissions for geo-tracking – is critical for improved mobile advertising relevancy and impact. According to a PxC survey, only 30% of users indicated they are willing to share information about their current location, while 73% of individuals would be willing to share personal information if they benefited from sharing that information.
Figure 2: Consumers willing to share information in return for benefits
The solution to the privacy issue lies in providing transparency to consumers around the usage of their personal information, and full control over what data they share with whom through opt-in/opt-out capabilities. Companies also need to implement and exhibit effective cyber security, which inspires confidence among users and is a further key to maintaining trust with the consumer.
Advertisers need to respect consumers concerns around data and privacy and clearly communicate how data will be used and protected, and adhere to consumers’ preferences; motivate users to share more information about themselves by exchanging it for applications, content, reduced access rates, or other enhancements; and promote and enable a visible exchange of value between customers and advertisers.
A good way to build consumer profiles that will drive more relevant and targeted experiences is to establish a mechanism like an exchange. This exchange would use, most likely through a unique though impersonal identifier, elements of the consumer’s identity that would persist throughout the mobile advertising ecosystem (e.g., device, operating system, carrier, application marketplace). Again, users benefits need to be provided/value offered in exchange for this information.
Figure 3: Targeting users find acceptable
Many mobile services are already moving in this direction. As this trend continues, consumers will switch from managing content and apps by genre to managing them by the amount of personal information they allow them to access, and for what purpose. In this way, consumers will define their own balance between privacy and personalization – and it will be different in every case.
Sources: – The new digital ecosystem reality: Mobile advertising strategies for increased success, PwC – PwC: Entertainment and Media Outlook – PwC: Consumers Intelligence Series Survey