Personalized advertising is an Internet-based advertising system in which advertisers track user traits and online behaviors to generate more targeted, personalized advertising messages. The intent is to deliver more targeted advertising messages to users when they interact with websites that publish ads using personalized platforms. One simple way to identify personalized ads is when you visit a website and see ad banners or links promoting brands in your local market.
Privacy Invasion
The main consumer concern with personalized advertising is the real or perceived invasion of privacy. Personalized advertising is based on advanced software tracking programs that enable third-party ad platforms to get to know you based on web behavior from your Internet Protocol, or IP address. While you get more targeted ads when the advertiser knows more about you, many consumers feel uneasy when considering the abilities of software to track their personal traits and online behavior.
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Costs
From an advertiser's perspective, personalized advertising is typically more expensive than other types of online advertising that is less targeted. The increased costs are generally based on a combination of enhanced benefits of more targeted audiences as well as the need of the ad server to cover the expense of using behavior-monitoring software. As with any advertising alternative, advertisers need to consider the efficiency of paying a certain cost and reaching more or less targeted consumers.
Opt-Out
Many consumers are bothered by the fact that some personalized ad providers use an opt-out system when letting consumers decide whether they want personalized ads. This means that your online activity is tracked and you will see personalized ads unless you specifically request to not receive them. The "Microsoft Advertising" web page, for instance, points out that users would have to opt out on its page to avoid personalized ads from the company. It also links to another website where web users can opt out of other personalized ad programs.
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Confusion
A major disadvantage of personalized advertising is general confusion about what it is, how it works, what tools are ideal and how to balance benefits with privacy concerns. This confusion is evidenced in language ad providers use to explain its behavioral tracking processes. It is also evidenced in the January 2011 article "Personalized Web Advertisem*nts -- Good or Bad?" from IT security company Norman. The article points out that three major personalized ad providers have very different takes on how to best manage opt-out processes and communication with users about how the process works.
