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When It Comes to Customer Experience, the Days of Targeted Advertising Are Numbered

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Janelle Estes avatar
Four out of five Americans support a ban on surveillance advertising. But will a bill that bans it pass, and how should organizations prepare?

Four out of five Americans support a ban on surveillance advertising. This type of advertising — also known as targeted advertising — uses the personal data of consumers, including things like age, gender, interests and behavioral trends to feed them targeted ads. This strategy has been a major profit-generator for giants like Google and Meta, but targeted advertising might not be around for much longer.

In January, US Senator Cory Booker announced the introduction of the Banning Surveillance Advertising Act; a bill that would do just that. If passed, this legislation would “prohibit advertising networks and facilitators from using personal data to target advertisements, with the exception of broad location targeting to a recognized place, such as a municipality.” The bill would also stop advertisers from “targeting ads based on protected class information, such as race, gender, religion and personal data purchased from data brokers.”

Practices That Abuse Consumer Privacy

Documentaries like The Social Dilemma and social media whistleblowers have dominated headlines and opened the public’s eyes to how their data is being used and people aren’t happy. The larger implications of surveillance advertising are much more serious than simply influencing purchases. As Senator Booker explained, “the hoarding of people’s personal data not only abuses privacy, but also drives the spread of misinformation, domestic extremism, racial division and violence.”

Even if the Banning Surveillance Advertising Act doesn’t pass, it certainly won’t be the last bill of its kind. The days of targeted advertising are numbered as consumers become increasingly discerning about how their information is being used. As analyst Yoram Wurmser said, this bill is, “a signal of the dissatisfaction out there, and the danger of relying fully on an ad model that could disappear.”

It’s time for companies to start thinking beyond targeted advertising. But what does that mean for the future of customer experience? 

Related Article: How to Turn Data Privacy and Compliance Regulations Into a Buyer Advantage

No Replacement for Getting to Know Customers

Companies who have a solid strategy around customer listening and empathy shouldn’t be threatened by legislation that limits targeted advertising — they know their customers well enough to know what will resonate broadly. When it comes down to it, deeply understanding your customers will drive your advertising strategy more than engagement statistics from a targeted ad will.

Just because someone sees an ad that was designed for them based on their gender, age or other personal information, doesn’t mean that it will resonate with them. This is especially true if the ad is designed by someone who isn’t from that same demographic, as is often the case. Targeted advertising is a highly effective revenue-generator — no doubt — but companies would be smart not to put all of their eggs in one basket and lose sight of what really matters — understanding customers enough to know what will make them click.

Related Article: On Data Privacy Day, 5 Organizations Share How They Protect Consumer Data

The Option for Consumers to Opt-In Is Critical

Maintaining customer trust is integral to every company’s success. One report found that “70% of consumers say trusting a brand is more important today than in the past, and more people are choosing to spend money with brands they trust.” Giving customers the choice to “opt-in” and consent to their data being collected is an essential part of building that trust.

Learning Opportunities

Last year, Apple gave customers the option to opt-in to receiving targeted ads from the apps on their phones. The majority of iPhone users (62%) opted out — another testament to consumers’ desire for privacy — but it sparked a larger conversation around the importance of transparency and opting-in. As long as targeted advertising still exists, consumers should be given the choice to knowingly opt-in.

And if the majority of consumers “opt out” of being tracked, the only option for companies to get a comprehensive understanding of the market is to offer ways for those consumers to “opt in” to feedback (if they so desire). If companies capture consumers who want to provide feedback, the option should be rich and authentic — think customer interviews, shop-alongs and surveys.

Explore Ad Strategies That Don’t Rely on Personal Data

Should the Banning Surveillance Advertising Act pass, it would still permit advertising based on location in addition to contextual advertising. These types of advertising are likely here to stay, and companies would be wise to get curious about how to maximize the effectiveness of these two avenues.

This will require gaining insight into what’s most important to users within certain contexts, and the best way to do that is to understand, observe and empathize with customers. By regularly talking with customers and exploring what lands best with them in certain contexts, companies can deliver ads that have an impact.

If surveillance advertising is banned at some point in the future (and it seems likely that it will at least be limited), it will have a significant impact on many companies’ bottom lines.

Consider this a wake-up call: it’s time to plan for what the future of advertising and customer experience look like without access to consumers’ personal information. This is an opportunity for companies to reconsider their advertising efforts and ensure they have a customer listening model that is ethical and focused on truly understanding customers as human beings — not just ad impressions or conversion data.

About the author

Janelle Estes

Janelle Estes is chief insights officer at UserTesting, a human insights platform, and the co-author with CEO Andy MacMillan of User Tested: How the World’s Top Companies Use Human Insight to Create Great Experiences. She is also co-host of the Human Insight Podcast.