The ethics of programmatic advertising
Programmatic advertising is changing the game by using technology to show personalized digital ads based on what we like, through the use of tools such as cookies. While this benefits advertisers, it raises big questions about privacy and consent that remain unanswered. Users of the web keep accepting these practices to get the most out of search engines, but how many of us actually know what we’re agreeing to when we accept cookies?
Historically, advertising focused on broad demographic targeting, with marketers making assumptions about audience characteristics such as gender, race, and age. Today, ads are not just aimed at demographic groups; through programmatic advertising, they are tailored to individual preferences, behaviors, and contexts, resulting in a highly personalized advertising experience (McStay, 2018).
To further explain, programmatic advertising automates the buying and selling of ad space on the web, utilizing first party, second party, and third party data. McStay (2018) describes this process by stating that programmatic “makes use of multiple sources of data” and “allows advertisers to target people across a range of devices and applications.” Although one could argue that advertising has always targeted individuals in this way, the difference now is that programmatic advertising automates this process by extracting data from the user’s web behavior. Google Chrome cookies, for instance, can track which websites consumers visit, their activities on those sites, browsing history, device information, IP address (location), ad campaign effectiveness, and even items left in shopping carts, among other features (McStay, 2018).
Fig 1. Image taken from The Pennsylvania Leadership Charter School’s How to Enable Cookies in Google Chrome
While we should be able to track and control these sometimes invasive cookies, other techniques such as "fingerprinting," serve the same purpose without the user's consent or knowledge. Fingerprinting works by collecting unique data from a device's software and hardware features that can't be hidden due to technical limitations (Weinhardt, 2020). This of course benefits businesses by enabling them to collect data at an exponentially faster rate, but also raises many questions about ethical data collection for advertising.
These rapidly evolving technological advancements are surpassing the speed at which legislative regulations are created, to ensure the user’s privacy. Because of this, several governmental institutions have taken matters into their own hands by creating important data privacy laws, such as the European Union general data protection regulation or EU- GDPR (Weinhardt, 2020). This 2018 law provides individuals with basic ownership of their data, through the rights to be informed, obtain personal information, correct inaccuracies, and request deletions (Bakare et al., 2024). In the U.S., data privacy regulations are diverse and typically industry-specific, with a notable example being the California Consumer Privacy Act (CCPA), which took effect in 2020. This act allows the residents of California the right to be aware of personal information being collected, the option to opt out of sales, and the power to eliminate data when needed (Bakare et al., 2024).
Despite these government efforts, there is a growing sense of distrust among consumers. This skepticism emerges not only from the lack of transparency in the programmatic advertising system, but also from the invasive nature of targeted ads, which often feel more intrusive than relevant and lead to reduced engagement. Many individuals in the UK, for example, increasingly turn to ad blockers or seek alternative platforms that prioritize user privacy, reflecting a clear demand for greater control over their online experience.
As the power of programmatic advertising continues to expand, we as advertisers must find a way to regulate data collection in order to ensure transparency and most importantly avoid consumer distrust and fatigue. Advertisers must communicate clearly how consumer data is protected to foster trust and empower individuals to feel secure in their online environments, as well as regulate the targeted ads in order for the consumer to actually stop to look at them instead of downloading ad-blockers. Together, we can navigate the complexities of this emerging digital realm, while always prioritizing the valuable consumers’ trust.
REFERENCES
Bakare, S.S., Adeniyi, A.O., Akpuokwe, C.U. and Eneh, N.E., 2024. Data privacy laws and compliance: A comparative review of the EU GDPR and USA regulations. Computer Science & IT Research Journal, 5(3), pp. 528-543. doi: 10.51594/csitrj.v5i3.859.
McStay, A. (2018). ‘Digital advertising and adtech: Programmatic platforms, identity and moments’ in J. Hardy, H. Powell, and I. Macrury (eds) The Advertising Handbook, 4th Edition, London: Routledge.
Untitled, n.d. Image of Google Chrome’s cookies settings. [Image]. The Pennsylvania Leadership Charter School (2024). How to Enable Cookies in Google Chrome. https://support.palcs.org/hc/en-us/articles/360054064414-How-to-Enable-Cookies-in-Google-Chrome [Accessed 13 November 2024].
Weinhardt, M., 2020. Ethical issues in the use of big data for social research. Historical Social Research / Historische Sozialforschung, 45(3), pp. 342–368. Available at: https://www.jstor.org/stable/26918416 [Accessed 12 November 2024].
