As brands and businesses embrace social media advertising, advertisements are evolving into sophisticated, systematic machines. Targeted ads are becoming increasingly popular across social media platforms, including Facebook, Instagram, Twitter, Snapchat and Pinterest. However, how effective are they with millennials?
After conducting qualitative research – observations, interviews and a focus group – in a recent Ad/PR Research class at UNC-Chapel Hill, my team and I uncovered some surprising discoveries about millennials’ reactions to targeted advertising.
- Perceptions and Reactions
Research revealed that participants had a negative or neutral perception of targeted advertising. Those who viewed targeted ads in a more negative light were mainly concerned about the privacy implications and companies combing their search history or tracking online behavior. In turn, these concerns lowered the consumers’ perception of a brand or company. On the other hand, many participants remained relatively neutral and simply scrolled past targeted ads on social media. Consumers’ opinions about brands and companies were not changed. They were not bothered by the presence of targeted advertisements but also did not pay them much attention.
- Privacy Concerns
Although companies are not breaking any laws by how they target consumers, all participants were aware of the privacy concerns related to targeted advertising. Many felt as though everything on the internet is already public anyway, so they did not mind that companies were using their data to create ads. Overall, the millennials in our research felt as though the benefits and convenience of targeted advertising outweighed the privacy implications.
- Targeted Advertisements and the Likelihood of a Sale
We expected to see a more direct relationship between targeted advertising and the likelihood of a sale, but our findings did not confirm our hunch. Instead, research suggested that targeted advertising is very effective in reminding millennials of a product they had previously viewed. In other words, targeted ads keep a product constantly in the viewer’s mind whether they decide to purchase it or not. The effectiveness of targeted ads greatly depends on consumers’ shopping habits. For those that regularly shop online, targeted ads effectively remind consumers of the product they had previously viewed, which could potentially expedite the buying cycle. However, for those that rarely online shop, targeted ads proved much less effective in getting their attention.
Alienate or Communicate?
Although millennials may have mixed reactions to targeted advertising, a few key findings can inform future ad campaign strategies. Our research suggested that there may be room to expedite the buying cycle for those that regularly shop online by providing reminders of previously viewed products. Additionally, since many consumers have privacy concerns with targeted advertising, companies should aim to be more transparent about how they are using a consumer’s information to target them.
Looking for more? Learn how to use coopetition to boost your marketing!
Written by Emily Deason, junior at the University of North Carolina at Chapel Hill.