‘Tailored advertising’ or ‘retargeting’ allows businesses to target advertising at people who visited their site but didn’t buy anything. These type of ads are becoming more and more common, as Tory MP Gavin Barwell discovered the hard way when he sarcastically tweeted “I know Labour are short of cash but having an invitation to “date Arab girls” at top of your press release?”. Facebook and Google already offer tailored advertising and Twitter announced this month that it will soon be trialling ‘promoted tweets’. These are ads displaying content from brands and businesses in which a user has already shown interest.

Businesses can tailor advertising by installing tracking software on their websites which uses cookies to record generally anonymous details of site visitors such as estimates of their age, sex, income and interests. A cookie is a small text file implanted by an online provider on the hard disks of visitors which collects information about the user. This then allows the online provider (through a retargeting vendor) to display adverts to those same potential customers when they visit other sites. The aim of the game is to convert initial interest into sales.

Twitter plans to use even more sophisticated technology. Instead of just doing the above, it will allow advertisers to upload a list of customers and potential customers on to the Twitter advert platform and then target ads at people who are both on the advertiser’s target list and also Twitter users. As Kevin Weil (Twitter’s Senior Director of Product, Revenue) put it in his blog “Users won’t see more ads on Twitter, but they may see better ones”.

The issues here are both privacy and anonymised online tracking. Do users want their online habits tracked? Do they even know what information about them is being collected?

The US already has a non-profit organization led by the top advertising and marketing trade associations, the Digital Advertising Alliance (DAA), which enables internet users to opt out of this sort of advertising through the DAA’s Self-Regulatory Program for Online Behavioural Advertising. By filling out the DAA’s opt out page, users can opt out from receiving interest-based advertising from the scheme’s participating companies. The Senate Commerce Committee is also currently considering universal “Do Not Track” legislation that could have far-reaching implications for interest-based advertising.

In the UK, the use of cookies is only allowed if the user has given his or her consent and has been provided with clear information about the purposes for which the information collected is stored and accessed.

While the use of cookies in the UK is governed by Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011, it is the Committees of Advertising Practice (CAP) who write and maintain the UK Advertising Codes, which are administered by the Advertising Standards Authority (ASA). The ASA announced new rules for online behavioural advertising earlier this year. The main requirement of the new rules is that internet users are offered the choice to opt out from being targeted via online behavioural advertising.

The reality is, however, that if you do not accept a website’s cookies, the website’s functionality will often decrease. This is a disincentive to opting out. There is also widespread ignorance among internet users about the amount and type of information collected about them online. Many are unaware of organisations like the DAA in the US or just automatically click ‘ok’ to the cookie opt-in when they visit a new website in the UK.

While national debate on this subject has a long way to go, money talks and targeted advertising can improve an advertiser’s return substantially as ads are targeted at users who are already inclined to buy. For Twitter, Facebook or Google, a targeted ad on which more users click means more advertising revenue.

What to take from this blog?

Consider privacy and legality before amending or updating your organisation’s advertising strategy. Learn from Google’s mistakes, as Twitter appears to have done. The UK’s Information Commissioner's Office informed Google on 4 July 2013 that it must amend its privacy policy to avoid potential enforcement action. Twitter, on the other hand, has been praised by campaign groups for protecting privacy. Twitter has promised to give users “simple and meaningful privacy options” when it introduces promoted tweets by allowing users to uncheck a box in their account settings. This will prevent Twitter from tailoring ads by matching a user’s account information with information provided by Twitter’s ad partners.