The online world is constantly evolving, and one of the most critical areas of concern is the relationship between users and online service providers and, subsequently, tensions between online service providers and data protection supervisory authorities.
With more enforcement actions being taken, such as the recent Irish DPC fines against Meta, we can expect to see an increase in legal battles over the use of online advertising, specifically behavioral advertising, and Ad-tech and behavioral advertising to be a priority enforcement area in the following year, just as they were in 2022.
What is Behavioural advertising?
Behavioral advertising is considered one of the most invasive types of online advertising, it refers to the practice of collecting and analyzing user online behavior data to deliver advertisements that are more relevant to their interests.
This type of advertising targets ads based on a user’s web-browsing history, search history, and other online activities. The goal is to create a more personalized experience for the user, but it also raises privacy concerns as it involves tracking a user’s online activities and collecting personal data.
Online advertising raises privacy-related concerns
- Tracking – Behavioral advertising often involves tracking user across multiple websites and devices, which can raise concerns about the monitoring of online behavior and the potential for profiling and discrimination.
- Data collection and sharing – Online advertising often involves the collection and sharing of personal data with third-party advertisers and other entities, which can raise concerns about the potential for the misuse of personal information.
- Inaccurate data – Behavioral advertising relies on the accuracy of personal data, but this data can sometimes be inaccurate or outdated.
- Data security – The collection and storage of personal data for advertising purposes can raise concerns about the potential for data breaches and the exposure of sensitive information.
- Lack of control – Users often have limited control over the collection and use of their personal data for advertising purposes and may not be aware of the extent to which their personal information is being collected and used.
What is the future of online advertising?
The core of the internet is based on an agreement between online service providers and users, where services like social media, search, and other innovative platforms are provided without charge in return for the personal data of users, which is then used by brands to deliver personalized advertisements.
However, the vast amounts of personal data, that is collected and used to deliver highly targeted, and effective advertisements raise concerns over the misuse of personal information.
In response to these concerns, there have been calls for greater regulation of online advertising and data collection practices, with some countries implementing new laws and regulations, while companies that base their revenue on selling targeted ads are taking a hit from new privacy measures.
Facebook says Apple iOS privacy change will result in $10 billion revenue hit this year, sparking a debate about the future funding of online services if they can no longer monetize consumer data.
Additionally, there is a growing trend towards privacy-focused alternatives to traditional online advertising, such as contextual advertising and decentralized technologies.
It is likely that online advertising will continue to evolve as technology advances and privacy concerns are addressed. The industry will need to strike a balance between delivering relevant, effective advertisements while also protecting user privacy.
Privacy-focused alternatives to traditional online advertising
Privacy-focused alternatives to traditional online advertising aim to deliver relevant advertisements to users while respecting their privacy and minimizing the collection and use of personal data. Some of the notable examples of privacy-focused alternatives include:
- Contextual advertising – This type of advertising delivers advertisements based on the context of the content on a website or app rather than collecting and analyzing personal data.
- Decentralized technologies – Decentralized advertising platforms allow advertisers to target users without collecting and centralizing personal data. For example, blockchain-based advertising platforms can use encrypted data and smart contracts to deliver advertisements that are both relevant and privacy-respecting.
- Ad-supported content models – Some websites and apps offer their content for free in exchange for displaying advertisements. This model allows for the delivery of relevant advertisements without collecting personal data or tracking online behavior.
- Ad-free subscriptions – Some websites and apps offer ad-free versions for a fee, which provides an alternative for users who are concerned about privacy and the collection of personal data.
These are just a few examples of privacy-focused alternatives to traditional online advertising. The industry is constantly evolving, and there may be other new and innovative ways to deliver advertisements while respecting user privacy in the future.
Balancing Privacy & Personalization
On one hand, targeted ads deliver more relevant and personalized advertisements to users, which can make it easier for them to find the products they are interested in and can drive sales.
On the other hand, the collection and use of personal data raise significant privacy concerns, with companies often incentivized to collect and share as much data as possible, with safeguarding personal information only a secondary concern.
Despite all that, the use of targeted ads continues to grow as they are seen to be effective in driving sales.
However, there is hope that other types of ads, such as those that are seen as disruptive or intrusive, may see a reduction in use as people demand a better online advertising experience.
Overall, it is important to strike a balance between delivering relevant and personalized ads to users and protecting their privacy and personal data.
This requires regulatory and economic repercussions for companies that fail to appropriately safeguard personal information, implementation and adoption of new technologies in advertising, as well as increased education and awareness about privacy issues.
