Consumers say no to mobile ad tactics

 

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By Stewart Mitchell

Posted on 13 Jul 2012 at 13:43

Advertising companies are eyeing the potential benefits of smartphone marketing, but research suggests consumers are wary of their tactics.

According to the Internet Advertising Bureau, mobile ad industry was worth £203 million last year, more than twice its 2010 value - and with increased smartphone uptake, marketers see huge potential.

Yet the industry's vision of the future is greatly at odds with how users want their information used, according to research from Berkeley University.

The study from the Berkeley Center for Law and Technology found that some of the key ways advertisers and app developers want to interact with users are hugely unpopular.

Under our current regulatory regime, firms can and do cram questionable demands for contact lists and other sensitive information in disclosures

One of the great promises of mobile advertising from an industry point of view involves adverts being tailored and sent to consumers depending on their location, allowing shops to flag offers when potential customers are in the vicinity.

However, more than nine out of ten mobile phone users said they would reject this intrusion if they were given the option.

"Consumers are overwhelmingly against this," the report found. "We asked respondents whether they would allow wireless service providers to use their locations to tailor advertising to them. Overall, 92% of respondents said that they would 'definitely' or 'probably' not allow the use of location data for this purpose."

Whether consumers will be given the choice remains to be seen, with the report concluding that the phone apps and advertising ecosystem were fundamentally geared against privacy.

Lack of trust

Earlier this year, for example, social networking app Path came under fire when it was caught gathering customer contacts, and in the weeks that followed other companies were also exposed doing the same thing, forcing Apple to change its practices and demand consent from users before allowing access to contact lists.

The research found that 93% of respondents would not allow apps to get their contact lists, which might have put an end to the practice, but the study warned that companies snuck permission past users.

"Under our current regulatory regime, firms can and do cram questionable demands for contact lists and other sensitive information in disclosures," the researchers found. "Greater transparency and consent requirements could help, but only if consumers can realistically make decisions that align more closely with their preferences for privacy than many of the value propositions available in the market today.