Study: Personalization promise doesn't urge people to share information

Brief:

The promise of more personalized experiences doesn't necessarily urge people to share their information with marketers, per an Advertising Research Foundation (ARF) study cited by eMarketer. U.S. consumers are less willing to share every type of personal information — including gender, race, marital status, employment status, sexual orientation and citizenship status — if it will be used for personalizing advertisements, the online survey found.
Consumers this year are more cautious than in 2018 about sharing this information. Survey respondents willing to share their home address dropped by 10 percentage points to 31% this year from 2018. The survey also found significant declines in the willingness to share a personal email, spouse's name and first and last names.
Trust in institutions also declined this year, with the portion of U.S. consumers saying they trusted advertising falling to 27% from 30% in 2018. The percentage of people who said they use social media sometimes and trust it fell to 30% from 33% last year, the survey found.

Insight:

Personalization is a key tool for mobile marketers, underpinning the push toward data-driven promotional strategies, but consumers appear to be less likely to share their information for the sake of seeing customized ads, the ARF's survey suggests. Amid relentless reports of data breaches and mishandling of personal information by companies, people have become more wary about handing over details about their lives.

Those concerns have compelled lawmakers in several regions, including the European Union, to enact stricter privacy laws that prevent companies from sharing data without the informed consent of consumers. The controversial practice of selling the location data of mobile users also is facing greater regulatory scrutiny in the U.S. Those limits may curb improvements in ad targeting, but aren't entirely insurmountable if marketers can provide a clearer explanation of why they collect information about their customers and how they use it.

ARF's study supports other research that indicates consumers don't see significant value in trading their personal information for customized ads. The percentage of internet users in the U.S. and Europe who said they believe data-sharing leads to better products and services dipped to 29% in 2018 from 31% a year earlier, per a separate survey by risk-management firm RSA Security. Less than half (45%) of respondents said tracking online activity to monitor fraud was ethical, while only 17% said so for tailoring advertisements, the survey found. It's critical for marketers to provide more transparency about their data-collection practices to rebuild consumer trust in the long term.