Broken online advertising exchange 'needs to change'

Soaring awareness of online privacy is causing consumers to question the assumed value exchange the entire advertising ecosystem is built upon – that free content is provided in return for sharing personal data – with the vast majority believing change is needed.

So says The Tipping Point report from Nano Interactive, which surveyed 2,000 UK consumers to understand their online privacy habits.

When asked if their personal data was a fair exchange for a free service, just as many respondents agreed as disagreed (30%) but the majority (60%) said advertisers should find a better way to make ads relevant that does not rely on collecting personal information.

The report also highlights that there is huge opportunity for advertisers who are mindful of this sentiment. More than half (52%) of people say they would be more likely to choose a brand if it could prove it never collected or used any personal information for advertising.

While many online advertisers are preparing for Google’s 2024 third-party cookie switch off, the study reveals the rise of private browsing is already significantly impacting advertisers’ ability to target users online.

The report reveals 70% of consumers are accessing the Internet in ways which mask their personal information on a weekly basis, such as browsing in private or incognito mode, using Safari as their main browser or regularly clearing their cookie cache.

One in six people say they clear their browsing history and cookie cache daily and 18% say that they opt out of websites’ tracking cookies on a daily basis.

People who use private browsing are also spending a significant amount of time doing so – on average nearly half (48%) of their time online. And the problem is growing – almost a third (29%) say they spend more time browsing privately compared to a year ago.

When asked why they have become more conscious about online privacy in recent years, ad tracking was cited as the number one reason. Two-fifths (42%) said this had made them more privacy conscious in the past three years, more than data breaches (31%) or being targeted by online scammers (31%).

Nano Interactive chief executive Carl White said: “The cookie apocalypse isn’t coming next year – it’s already here. Huge swathes of the UK population cannot be addressed online via cookies or profiling and our survey shows that they feel strongly about how personal information is used by advertisers.

“Advertisers need to embrace and test longer term alternatives that will be more palatable to online audiences and avoid clinging on to outdated or unpopular identity-based targeting methods.

“In 2023, you don’t need to know who someone is to deliver effective advertising online. Brands and advertisers who embrace truly ID-free targeting will be able to target people online in a respectful, effective way today that is future-proofed.”