Consumers value ad-funded content but have no taste for cookies

While the demise of the cookie is considered an existential threat by the pessimists and third-party vendors who have prospered by selling your privacy, there is a far more positive way to look at their removal from the major web browsers, something Apple did two years ago without the complete collapse of online advertising.

To view this instead as an opportunity based on what consumers see as a fair value exchange between the content they access, and the advertising that funds it.

That’s a central finding in the new report, Understanding Consumers’ Perceptions Of Online Advertising, which focuses on people’s attitudes towards privacy concerns and advertising more generally. The insight is based on a new consumer survey conducted by YouGov across six European markets, including the UK.

The report, produced by contextual advertising company Seedtag, provides insights for brands on how people view the relationship between online content, their own data, and ad-funded models. All this within a context of consumers being increasingly aware that their personal data is used for advertising purposes.

Data privacy concerns

First, let’s look at attitudes to data privacy. The research finds that, overall, consumers’ awareness of their digital footprint is growing, and that they like it when brands consciously decide to stop using personal data to develop their marketing and targeting strategies. Some 82% feel positive or very positive towards advertisers ending their use of personal data for targeting. Meanwhile, when asked about current cookie usage, only 17% of respondents feel positively about brands using their personal data to tailor and target ads to them.

The report also reveals high levels of consumer action to protect their data, especially when it’s cookie-based. In the UK, more than half (52%) of respondents are already taking measures to protect their privacy online and restrict tracking through cookies (either by adjusting the scope of the storage of cookies, or denying cookies outright when online).

This finding should provide impetus to any brands taking steps to move beyond a reliance on cookie-based targeting which is increasingly obsolete and unworkable in the new paradigm. It’s also a reason for businesses to develop and invest in a data privacy strategy as a top priority.

But it also highlights that there are issues to be addressed in terms of delivering effective online advertising that meets the needs of both advertisers and consumers. The report shows that people are happy to view ad-funded content – 58% are comfortable with ad-supported or hybrid methods of funding online editorial content. Yet there’s a potential sticking point here in that 84% of respondents feel the ads they are served online lack personal relevance and we already know the frequency of advertisers retargeting and chasing last click attribution is now an annoyance and definitely not a benefit for consumers.

Paul Thompson, UK country manager at Seedtag, says: “As the cookie-based model unfortunately still remains the default form of advertising for now, many users who feel negatively about the use of personal data no longer encounter ads that are relevant to their interests. This typically used but increasingly at threat of extinction model has led to very negative perceptions of brands that use this approach, as users tend to associate this relevance with these invasive techniques that lack transparency”

Advertising’s value exchange

This is where the value exchange with advertising plays a big role. As we’ve seen, it’s apparent from the research that consumers are generally happy about being served advertising in exchange for free content so we are safe to assume that it is not the advertising per se that is the problem but the method of targeting.

And people in the UK are far more likely to support an ad-funded model for online content (76%), compared with those in Italy (56%), France (52%) and Spain (51%). These respondents don’t mind seeing ads, as long as it means they can consume content that interests them.

The key here, though, is that the power and efficiency of this model increases when the advertising is placed in a relevant and valued context. For example, 53% of users responded that ads embedded within high quality content are more likely to grab their attention.

In further good news for advertisers, the people who are most concerned about data privacy and felt positively about brands not using personal data or cookies, were also more likely to be receptive to this approach. Close to two-thirds (64%) of these respondents feel very positively about brands whose ads are embedded in content that interests them, while 49% feel very likely to notice ads that are surrounded by high quality content, further highlighting the growing importance of attention in measuring the effectiveness of an advert.

Seedtag’s Thompson says: “When brands eventually have to stop using cookies, due to measures such as the imminent changes to Chrome, it has a largely positive impact on these dedicated readers. This highlights how the context of an ad is a hugely effective way for brands to capture their audience’s attention and ensure they are seen in a positive light, all without needing to use cookies or personal data.”

Looking forward, privacy can be embraced by brands as a positive force rather than a barrier to successful marketing strategies, and advertisers should be encouraged by the openness to more contextual solutions exhibited in the YouGov survey. Users are more likely to engage with ads that they encounter within relevant content, and they’re also more disposed to view these brands favorably.

Thompson concludes: “This is a huge opportunity, advertisers get to work with cookieless solutions which cover the whole of the open web and can stop relying on a dwindling pool of third-party cookies which target the same audience time and time again.”

There is room for optimism, then, for forward-thinking brands that grasp this opportunity by adopting rigorous data privacy policies, while also investing in relevant advertising for high quality environments.

To view the full report, click here.