Personalised Advertisement

“Is there net benefit or net detriment to personalised advertisement?”

— Good Data Assembly, 9 February 2022, 6.30pm GMT
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This page is aimed at providing a brief introduction to the topic of personalised advertising, the current state of regulation, and some opinions on the matter.

What is personalised advertisement, or “microtargeting”?

 

Microtargeting is a “form of online targeted marketing strategy that uses consumer data and demographics to create audience subsets/segments” [1]. What this really means is using information about your behavioural characteristics to put you in a group of people that can be influenced in a more targeted way as a result of specific characteristics and buying behaviours. It is also referred to as targeted advertising, personalised advertisements and behavioural advertising. 


The term ‘microtargeting’ has its roots in political advertising and was coined by political consultant Alexander P. Gage to describe the process of using “voter registration records to develop individual-level predictive models” by his company TargetPoint [2]. Generally, the process of microtargeting can be divided into 4 steps.

Step 1: Collection

Data is collected on an individual through website tracking, databases and data brokers. [3]

Step 2: Segmentation

The individuals associated with this data are then segmented into small groups based on their characteristics such as interests, voting behaviour, and location.

Step 3: Personalisation

The microtargeter will then design personalised content for each segment that is most likely to elicit a response based on their segmented characteristics.

Step 4: Distribution

The content is distributed to users as advertisements, usually on online platforms. This is the reason you will receive different advertisements on your social media feed to others around you.

 

How is it currently being used?

Despite only recently reaching public consciousness, especially in reference to political influence, microtargeting is neither novel or confined to an individual industry. In principle, microtargeting is generally used to convince an individual to perform some action. This could be voting for a certain political party or candidate, purchasing a product or service, or signing a petition.On a high level, microtargeting can be separated into political and commercial use cases.

  • Political Microtargeting

    Microtargeting is used by political campaigners to target specific groups of people with the purposes of influencing their actions surrounding a political issue or event, such as an election. The intent could be to encourage voter turnout or suppression of a specific group, or build support for a specific political issue. It has widespread use such as by United States Republican and Democratic parties in local and presidential elections [4], as well as in the United Kingdom’s 2016 European Union Referendum [5].

  • Commercial Microtargeting

    Commercial microtargeting refers to the process of targeting specific groups of people with the purpose of selling a product or a service. This service is the basis of many social media (Facebook), video sharing (YouTube, TikTok), and search engine (Google) platforms.

Google AdWords enabled the first widespread use of microtargeting.

Who are the main companies executing microtargeting?

Microtargeting entered the mainstream in 2018 following the reporting of Cambridge Analytica’s use of 50 million Facebook users’ data without permission in the 2016 US presidential election campaign [6]. However, microtargeting has been the basis of many business models for years. The first documented paid for click services was released by Planet Oasis in 1996, however it was Google’s uptake of the technology in 2000 with Google AdWords, that the microtargeting business model first took off [7]. Now, personalised advertising is used by many companies and political campaigns across the word to maximise the reach and impact of their message.

Benefits

Drawbacks

What is the current policy landscape?

 

Central to democracy is the ability of society to understand all points of view and engage in national conversation. This, coupled with the increased scrutiny from regulators following political microtargeting scandals such as Facebook and Cambridge Analytica has led to many technology companies self regulating in preparation for a potential new wave of regulation.

In late 2019, Twitter announced it was banning political advertising worldwide saying political reach “should be earned, not bought”. [11]

Facebook, however, believes society should “err on the side of greater expression” and it is not right for a company to censor politicians or the news in a democracy. [12]

Some tech companies have taken steps to increase transparency of their microtargeting services, such as google who published this Transparency Report tool for political advertising across different global jurisdictions. [13]

  • There is currently very limited regulation specifically acting against microtargeting, however there are increasingly moves in this direction. Instead, there are a number of other legislation rules that apply to such a process across a number of jurisdictions. For example, on the level of the European Union (EU), the General Data Protection Regulation (GDPR) and laws on freedom of expression govern the use of microtargeting.

  • Many countries also have sector-specific rules on political advertising. In the UK specifically, the online harms legislation, initially referenced in the 2019 white paper covers some aspects of microtargeting.

    • In early 2020 the UK government advisory body on AI and data ethics, the Centre for Data Ethics and Innovation (CDEI), published a report recommending increased transparency of targeting methods and collected public sentiment that showed 61 percent of respondents preferring independent regulatory oversight of online targeting systems over continued self regulation.

    • The 2019 House of Commons Digital, Culture, Media and Sport Committee report, Disinformation and ‘fake news’ presents a highly critical take on Facebook and other companies as propagating the systemic ‘surveillance and modification of human behavior for profit’ and had a broader perspective on the “negative impacts of technology that do not show up on the balance sheets of companies, but on the balance sheet of society. [18]

    • The UKs data protection regulator, the Information Commissioner's Office (ICO), released a report in 2019 that outlined concerns with the advertising process known as real-time bidding (RTB), which makes up a large portion of online advertising, concluding that ’systematic profiling of web users via invasive tracking technologies such as cookies is in breach of U.K. and pan-EU privacy laws’. [19]

In sum, although no specific regulation has been published, there are clear calls for increased scrutiny on the use of political advertisements specifically, or the process as a whole.

What is your opinion?

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