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The Ethics of Online Ad Targeting

Insights / 03.30.2017

Ross Briggs / SEO Strategist

As part of the Civil Rights Act of 1968, the United States Congress banned landlords from discriminating against tenants based on race, religion, or country of origin. Later, the law was amended to include gender, disability and familial status. Likewise, it is illegal for an employer to withhold a job offer, or pay employees differently, based on those same characteristics.
 
Most people agree that’s a good thing.

Artificial barriers drawn on race, age, or religion create isolated groups that see outsiders as different, which can result in a lack of compassion and empathy for those outside their in-group. Conversely, allowing groups to intermingle within a neighborhood or workplace helps them start to see one another as more relatable, and less adversarial.
 
The anti-discrimination laws enacted in 1968 and after, cover explicit statements of discrimination (i.e. a job advertisement that states “whites only”), but what about other forms of more implicit discrimination? What if an employer doesn’t ever state that a job is open to “whites only”, but rather finds some way to only show the job ad to light skinned candidates? For a long time, the threat of that type of discrimination was relatively low, as the means of distributing that type of message to a filtered audience were limited in scope. Newspapers, radio stations, and television shows might appeal to a certain demographic over another, but anyone was free to consume whichever content they chose.
 
That is beginning to change. Quickly.

In 2009, Facebook introduced advanced ad targeting, allowing companies to choose from language and geographical options for their ads. And it made sense; why spend costly ad dollars on consumers who can’t read your message, or are in a market where your product is not available? Now in 2017, advertisers can choose to show their ads based on a host of metrics including geography, age, gender, language, as well as interest and behavioral patterns. That type of targeting has made the social network a giant in the digital advertising space, raking in around 20% of global digital ad spend in Q4 2016 – worth about $3.4 billion in revenue.
 
In February of 2017, Facebook bowed to mounting pressure from groups including the Congressional Black Caucus and ACLU, asking them to disable ad targeting on the basis of race, gender, and sexual orientation when the ads are for employment or housing. Facebook announced new rules in place that would restrict targeting in those areas, but it is unclear exactly how strictly, or what tactics the social network intends to use to enforce these rules.

Should these restrictions apply to more than just housing and employment?

Many advertisers on Facebook use ads to sell physical products directly to a consumer. But many others use the site to attract an audience to interact with their content. A well targeted promoted-post on Facebook can mean a few thousand readers checking out your latest blog post, and when those publishers sell ad space themselves, that can result in some substantial ad revenue with a healthy ROI. Other companies, like online colleges, pay for ads just to ask you to follow their page and like their content, a longer-term strategy in which they are hoping that building up familiarity over time means that when the time is right to pursue a higher education, you will choose them first. Once you visit their website, you’re entered into their remarketing list, and will be haunted by their banner ads until the end of time (we’ve all been there).
 
This content-focused targeting creates digital echo chambers of information (sometimes even mis-information), and enters each audience into an environment filled exclusively with personalized stories that only serve to feed into their existing preconceptions. And just like the isolated groups that can spring up as a result of segregated housing or workplaces, online echo chambers create groups that become wary of outsiders who challenge their way of life.

Ok, so just get off Facebook. Problem solved?

Maybe not. In March of 2017, the US Senate approved a measure that allows Internet Service Providers (ISPs) to track and sell your browsing behavior to advertisers on the open marketplace. The law enables collection of data relating to the broadband service in your home, as well as mobile devices. While individual websites like Facebook have collected and sold this type of data for a long time, it’s a little different when ISP's are doing it.
 
For websites, even popular ones, there are usually several alternatives that act as safety valves if discrimination or general privacy concerns mount past a certain critical mass. By contrast, at least 33% of Americans only have one option when it comes to broadband internet providers, and currently cable companies control 72% of home internet connections in the United States. So while Facebook may have pioneered this type of ad-targeting technology, others are desperately trying to jump on-board as well, and when ISP's get in on the game, the barriers between individual websites disappear and consumers will have a tough time escaping the personalized ad targeting.

What’s a marketer to do?

So far we covered the evils of ad-targeting and demonstrated their quickly-spreading influence over our lives. With all the negative aspects we covered, you might be wondering if there could possibly be any redeeming qualities associated with ad targeting. Does anybody actually like personalized ads? Yes. You do. I do. Everybody does.
 
Ads are annoying because they interrupt content we care about with content we don’t. Superbowl ads are less annoying than commercials that aired the night before, partially because consumers are prepped to receive the content, but also because the ads deliver value. Value either in the form of comedy, information about an exciting new product, or, as in the last Superbowl, ads with poignant messaging about the cultural climate.
 
If you’ve ever waited to buy a new smartphone or laptop until the new version was released, you probably understand the excitement a product-focused ad can create. Remember the feeling when you finally saw the release date and newest features? If you weren’t in the market for a new laptop at the time, you might have seen the very same commercial and been annoyed that you need to wait 30 more seconds for the show to come back on, but since it's relevant to your life, you're captivated.
 
Relevancy creates value, and targeting creates relevancy.
 
Think of any product you buy regularly, something simple - like fruit. What if you found out that while you’ve been buying fruit from the supermarket for as long as you can remember, there is actually a farmer in town selling that same type of fruit for cheaper? The farmer's fruit stand is actually 2 miles closer to your house, the fruit is all organic, locally sourced, and tastes much better. This vendor is superior to the supermarket in every way, but since you didn’t know about them, you've always just purchased fruit from the supermarket.
 
The owner of the farmer’s market wants more customers, but the local newspaper’s smallest ad-buy is too expensive, and his fruit stand is too far for most readers to drive anyway. Beyond that, some people that do live close enough to the farmer's stand don’t eat fruit very often, and wouldn’t make good customers. What the farmer needs is a way to pay for his ad to be shown only to people who live nearby, and also enjoy eating fruit. Sound familiar?

Geographic and interest-based ad targeting to the rescue.

Ad targeting is a powerful tool. It can be good for businesses, and good for consumers as well- but, only when it’s done right. As marketers, we need to be aware of the impact that our messages will have and start to consider what it means to show a message to one group while excluding another. Whether you work in-house or at an agency, you likely strive to win business for your client or employer in the most cost-effective way possible. While we will continue to keep return-on-ad-spend top of mind, we also need to ask ourselves if we are keeping up with our ethical obligation to society, both as marketers and human beings.

It’s easy to look at another industry and point the finger - many have asked how certain stockbrokers on Wall Street sleep at night, knowing that their actions may have helped contribute to a financial meltdown that destroyed the savings and investments of millions of innocent people. It's easy to look on from the outside and say "I would have done things differently.” It’s much more difficult to look inwardly at ourselves, to take a step out from anonymity and forget the tired excuse “I was just doing my job.”  We need to consider the effects that our campaigns have when our message is received on the other side of the screen.  
 
It’s something we think about quite a bit at Red Door, and something we hope you will too.
 
Do you have any thoughts or concerns about the influence additional targeting may have on ethical marketing, or additional laws that may be rolled out in the future? Leave a comment below or tweet me at @rosstbriggs to discuss.

Insights,Paid Media,Social Media

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