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Privacy Issues Holding Back Online Behavioral Advertising

Privacy concerns hampering online ads

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More and more marketers are shying away from online behavioral advertising (OBA) over concerns about consumers’ privacy, according to new report by the Ponemon Institute.

The report, "Economic Impact of Privacy on Online Behavioral Advertising," found 70 percent of companies agreed behaviorally targeted advertising significantly increased marketing and sales performance, but most have limited their online ad budgets over privacy concerns.

The majority (98%) of companies said they have restricted OBA because of privacy concerns, while 63 percent said OBA was their most effective form of marketing.

Larry-Ponemon "These numbers are disconcerting both in terms of the percentages and the potential economic impact," said Dr. Larry Ponemon, chairman and founder, Ponemon Institute.

"These data clearly indicate that, in spite of a belief that behavioral advertising is their most effective marketing channel, companies are holding back hundreds of millions of dollars from online marketing simply because of a lack of confidence that privacy concerns can be overcome"

The study concludes that companies are clearly concerned with the protection of consumer privacy and are sensitive to consumer unease with online behavioral advertising. The study recommends that advertisers, regulators, and privacy advocates work together to better address privacy concerns through improved disclosure models, consumer education, and effective consent mechanisms.
 

Privacy Issues Holding Back Online Behavioral Advertising
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