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[26 comments]

Smartphone users don't want targeted ads

March 3, 2014

Even with the assumption of "ad relevancy," a majority (56 percent) of U.S. smartphone users say they don't want to ever be targeted on their devices, at least according to a new PricewaterhouseCoopers (PwC) study.

Only 10 percent were okay with being ad targeted in such ways on a daily basis. Twenty-two percent of the total sample were okay with being targeted on a weekly basis and 12 percent were open to a monthly ad.

Somewhat surprisingly, the younger, mobile crowd had equally strong reservations. Half of the youngest profiled group (18-to-24 year olds) and 61 percent of the next group (25-to-34 year olds) were averse to any such targeting.

In follow-up focus groups, respondents explained that mobile ads are generally annoying and frustrating and usually interruptive and distracting to something else they are engaged in doing on their mobile device.

Asked to list their greatest concern around mobile advertising overall, the top answers were:

  • "Crosses the line into my personal space," 30 percent;
  • "Not able to turn them off," 24 percent;
  • "Too intrusive to my lifestyle," 18 percent;
  • "Too many," 18 percent;
  • "Not relevant," 6 percent.

Regardless, when asked to rate the targeting criteria for mobile advertising, the most preferable option was by "Interests," 54 percent; followed closely by "Your current location," 44 percent. Scoring lower were "By previous online purchase history," 25 percent; "Based on types of website visited on phone," 24 percent; and "Based on types of websites visited on PC or tablet," 19 percent.

Other findings in the survey regarding the general acceptance of mobile ads:

  • The top delivery complaints were the duration or size of ads, non-relevant content, and ads not based on their location.
  • Mobile coupons and banner ads were significantly preferred for mobile advertising over video and text;
  • Of those amenable to mobile ads at certain times, most preferred getting them when they are in a more "leisurely" mode, such as on weekends, just before they retire for the evening, while they're sleeping, or generally "out and about."

 

Discussion Questions:

Do you see consumer resistance/acceptance of ads on mobile devices as being different to that of other advertising mediums? Considering the resistance, are there ways to make ads on mobile devices more effective?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How would you compare the general resistance to ads on a smartphone to its close cousin, the PC?

Comments:

This report is at odds with award-winning work done for AOL that I was proud to consult on, written up in HBR, referred to as 7 shades of mobile.

When you use a focus group and survey approach that is untethered to behavioral data, it really depends on how you ask the questions and can get highly misleading results. The key is that people want relevant advertising and offers, especially for apps they have downloaded specifically for shopping purposes where they have granted permissions. It is now possible to address the question via an experiment and I would be shocked if mobile advertising that is "targeted" via first party data and permissions doesn't produce significant lift.

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Joel Rubinson, President, Rubinson Partners, Inc.

This is the same phenomenon. As the generations get younger, they are rejecting more the idea of companies pushing messages to them, no matter what the venue. Unfortunately, marketers lack that understanding and still want to push, push, push.

I don't have a good answer, but I know it isn't making ads more "interesting" or "relevant." What companies should do is hold a session with their marketing people and speculate "How would we market our products if advertising was no longer a tool?" If they didn't come up with a solution, they would at least come up with some alternatives.

The wheels have turned. No longer is the question, "How do we reach our customers?' but "How do our customers reach us?"

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Gene Detroyer, Professor, Independent

I understand the results of the survey, but I think that as more and more people rely on their phone to pay for purchases, research items, compare prices etc., mobile ads will be better accepted. The key to that acceptance is in the relevancy of the products to the user's lifestyle and the ability to tweak the ads to make them shorter and more impactful. I would never say that we are years from that happening given the speed at which mobile usage is progressing.

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J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

The mobile use cases of being on-the-go, in the store, or searching for stores/deals are not ideal forums for display advertising. The research seems to support this, with consumers preferring being able to browse content at-home in a less busy scenario.

I'm not sure mobile ads will ever work very well on a mobile phone, as much as opt-in offers pushed or pulled in real time based on the shopper's mission. The use of iBeacons will be a good test case for how this works in practice. It seems best to have a plan to orchestrate an engagement strategy that cuts across the digital path to purchase. In that scenario you might employ a more content-oriented messaging strategy with display advertising that unfolds in the at-home use case, that connects to a new application, offer or promotion to be used in-store or on-the-go on a small screen mobile device. The inverse would also happen, where instead of mobile ads, you engage consumers with real time promotions and offers that lead to opt-in communication permissions so you can follow up the mobile experience with a connection to more engaging display content at time better suited to the shopper.

So the overall effect is greater leverage than if you focus only on mobile advertising. To do this well at scale, you need to understand individual consumer and shopper behavior.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

Regardless of consumer reaction, mobile ads are here to stay. The only question is how to serve them up so that they are palatable. The aspects that consumers find irritating are the legacy of old-school television and radio advertising.

To "break through" on TV, a commercial needs to be funny, weird, shocking, or intrusive in some way. "Intrusive" - that word is a regular feature of creative briefs at agencies. I imagine that philosophy is at work for many of today's mobile ads too.

But on the mobile screen, "intrusive" won't work. Why? Because the mobile device is a personal device. It is intimate. You can't shout at someone or interrupt someone while they are engaged in another activity, without pissing them off. Instead, relevancy and compelling content will win over interruption and weirdness. Sorry guys, this isn't TV Lite.

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Liz Crawford, VP, Strategy & Insights, Match Drive

Consumers pay for mobile phone and usage. They resent the intrusion of advertising, much to the dismay of retailers and brands. Is this really new news? If marketers want consumers to accept mobile ads, they should offer to partially underwrite the cost of mobile service.

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Max Goldberg, President, Max Goldberg & Associates

Yes. They don't want to be barraged so that's why having a consumer's permission to deliver these matters and relevancy is key. If it's not relevant to a consumer's specific interests, that will frustrate them. The challenge is the companies delivering the mobile ads need to define relevancy in a way that works for both the consumers and themselves.

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Bill Davis, Director, MB&G Consulting

There are several challenges with ads on mobile as the article pointed out. The smartphone is personal and consumers don't want someone intruding on that personal space. The real estate is also limited on a smartphone so anything you try to show will interfere with the consumer experience.

I am sure someone will crack the code on mobile advertising. I can tell you now, like many consumers, I have no interest.

What if someone created a no ad phone plan? It would cost more, but all ads would be blocked and personal data protected. Even ads within 3rd party apps. Interesting concept.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

"You Ain't Seen Nothing Yet" (the classic rock song by Bachman Turner Overdrive) may actually better predict what will make future mobile ads effective. The challenge to this point has been that mobile advertisements are just advertisements. The relevance factor has not really fully emerged and consumers honestly don't know what the future state of "ads" may be.

That said, brands would be wise to begin the process of creating relevance through relating directly with consumers rather than trying to sell to them. Nobody likes advertisements, but everybody likes to feel special, cared for, and unique.

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Dave Wendland, Vice President, Hamacher Resource Group

According to the study, "context and relevancy is king" and that means that it's not just about knowing the person and purchase habits, but also the context - together these become much more powerfully effective. One of the activities cited in the survey respondents is purchasing merchandise/services from a website using their mobile devices (32%) with the focus group respondents "mostly all" were doing it.

As to intrusiveness and crossing the line, the survey authors also were clear in their findings: consumers will tolerate mobile ads when they fit what they are doing (right context) and are meaningful (relevant) - otherwise they are considered intrusive to the ongoing activities. What is more egregious to consumers is what the survey authors called "crossing the line" where personal space and privacy is violated - when private emails and text messages are scanned and mined for keywords.

My takeway: purchasing goods and services using mobile device has become an expected and natural act. Breaching privacy (personal point to point communications vs. social media posting) falls in the creepy side of the continuum. Smart marketers will respect people's privacy while delivering relevant and contextually aware communications to the consumers.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

The key to acceptance of delivery to smart phones is that the content be personalized offers and not general advertisements.

By definition, personalized offers mean offers that the recipient is likely to find of value. Of course, this is easier said then done! The challenge for us science folks is to learn how to synthesize all we know about the individual's preference history, with the individual's current need state and location. From this synthesis, inferences as to what offers the individual would truly like to receive at a certain point in time can be made and acted upon.

One deduction that might be made for some individuals is that no offer is what would be appreciated. But my guess is that, for the vast majority of individuals, there are offers that would be appreciated in most situations. Our job is to create the systems that will identify and deliver such offers.

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Dr. Paul Helman, Chief Science Officer, KSS Retail

No consumer will ever say that he or she would like to be targeted for ads on his or her device, be it a cell phone, computer, or otherwise. The real question is does ad-targeting actually work? And there lies the billion dollar question.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

I agree with the study that mobile advertisements should not just be repurposed ads from other channels. Mobile users are much more task-oriented and view advertisements, especially large and non-relevant ads, as interruptions.

Much of the "free" internet economy is founded on advertising as the source of revenue. Key here is to not take a "pave the cowpath" approach but to rethink the entire process leveraging both the technologies available and presentation opportunities. For example, make it a relevant suggestion that helps the user accomplish their current task. Or offer a discount on the products they are looking at.

Again, the mistake is to take yesterday's billboard-style ads and throw them at users hoping the some single-digit percentage of them will click (in many cases, by accident). Users expect more and will respond negatively to the brands that take the blind "see what sticks" approach.

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Todd Sherman, CMO, Point Inside

Of course no one wants constant ads from random retailers popping up on their phones at inopportune times. But do they want a relevant, valuable offer timed to their current activity? Probably. So it's incumbent on marketing to figure out how to deliver such win-win ads.

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David Dorf, Sr. Director of Technology Strategy, Oracle Retail

When you get responses like "too intrusive" or "not relevant" and "too many," that is a simply a reaction to the reality that most ads are targeted only from the manufacturer rather than the consumer perspective. Most "targeting" as practiced today is often nothing more than a manufacturer wish list, extrapolated based on something else the consumer has bought or done. That may be okay for slower media like snail mail, coupons on a website or even email, but targeting for mobile has to be much more dynamic and totally relevant to the moment. Otherwise, it is just clutter.

Andy Casey, Senior Partner, Loyalty Resources

"Relevance" is a magic word invoked by mobile marketers in an effort to justify their intrusion into the media experience. It seems like a reasonable principle, but I suspect that consumers may have much more nuanced ideas of what relevance means in their lives.

Right now a lot of big strategic and monetizing bets are being made based on the belief that mobile users are eager to view promotional content. OK, well at least they are willing to tolerate promotional content, right?

Mobile is an un-mass market. I suspect too many of the supporting surveys are constructed to validate the broad premise of relevance without digging deeper into individual differences. Relevance needs to be not just about which message to send at a given moment, it must also be about if a message should be sent at all.

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James Tenser, Principal, VSN Strategies

Mobile ads use impressions as a metric while mobile apps use interactivity. What is the purpose of trying to make an ad impression on a device designed for interactivity?

Ed Dunn, Founder, (Stealth Operation)

Get an ad on TV, I get cheap content/entertainment.

Get an ad in the paper, I get a cheap newspaper.

Get an ad on the radio, I get free content.

Get an ad on a website, I get free/cheap content.

Get an ad on e-mail that I sent to a free junk e-mail account, I got an intro offer and basically some unobtrusive spam.

Get an ad on a smartphone, I get an ad from a site that gave me an intro offer, once upon a time, and I get an ad that I don't want to see, that some marketing guy thought I wanted and likely got paid by a manufacturer to send out, and it possibly cost me money to get it.

Sorry, no thanks.

'beavertontim'

The mobile phones are going to become what once was junk mail (as in tossed into the trash); then it became telemarketers (hang up on these idiots), and now we have a plethora of ads pouring into the mobile phones.

I see a trend that people will delete before even reading.

To me, I want my businesses to get permission to send ads to my phone, so I can control the number of items being sent. A relevant super hot deal is what all of us want, not some rubbish pushing something we don't.

It will have to work itself out, as this is just beginning.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

As will other RetailWire panelists, I am curious about how the questions were asked. Globally, we are seeing very little resistance as mobile adoption becomes ubiquitous. As long as the CPG and retail brands create compelling offers that primarily drive true loyalty, rather than overtly push product promotions, consumers will most assuredly become more comfortable with the inevitable rise of target marketing efforts over time.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

The problem here is a failure to communicate at its most basic. Advertisers and marketing firms keep saying "darn it, we know what's relevant to you and it's for your own good that we're sending you this stuff. You should appreciate it." And smartphone users (and many PC users) keep saying "no you *don't* know what's relevant to me, darn it, and you never will. You keep sending me unwanted messages and I'm getting really annoyed at both the personal intrusion and time waster."

The last thing in the world most of us want is more government regulation with penalties on businesses. But that is exactly where this may be headed (akin to the Do Not Call List), if people who specialize in "targeted marketing" don't figure it out.

'Liatt'

The cool thing about ads on mobile devices is the ability to target. However, for the adds to be effective, the smartphone owner must give permission. That doesn't mean small type that a customer might miss when they are doing another transaction. This means true "I want to get your info - especially if it applies to me" kind of permission. The retailer should be careful how frequently they connect and balance the benefits to the customer as they push advertising to them. Done well, you'll create an amazing relationship with a customer. Mismanaged and the customer will disconnect from this channel - or worse, may disconnect from doing any business with you in the future.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

It's all in proportion to the size of the device, and the fact that most people are still reading everything that comes to the phone. So short/sweet/and relevant please, or that "opt out" button is going to become an app some day that people can install to easily select and delete.

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Peter J. Charness, SVP America, Global CMO, TXT Group

The use of a mobile device is by its very nature a different experience than a PC or a "real" item like a magazine or TV. We feel more "in control" of our mobile device and therefore we expect more control of the ads we see there.

There is a balance between wanting to know about deals and information when we want it, and being deluged with such information when we don't want it. The answer is to enable all push notifications to be turned off easily when not wanted, and turned on when wanted. The control will ultimately go to the consumer, so advertisers will be best positioned that grant this power to the user now.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

Allow customers more options to "op-in or op-out."

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Jerry Gelsomino, Principal, FutureBest

The structure of mobile ads may be the root cause of the problem. Innocently visiting a web site on the phone seems to trigger splash ads that are often not easy to delete or get around. I have often attempted to click out, but instead triggered the ad link and had to back my way out of the navigation.

If designers of these ads were more open in their architecture, they might find less resistance from consumers.

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Bill Hanifin, Managing Director, Hanifin Loyalty LLC

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