Psychological study reveals why customers don't trust online ads

New research indicates that customers are more likely to trust online adverts if they understand the technology being used to target them. The finding suggests that a common cognitive bias could be causing less savvy consumers to become unduly alarmed at retargeting adverts.

A study of 2,000 regular internet users, conducted by inbound marketing agency Digital Media Stream, found that consumers are three times more likely to trust retargeted online advertisements and respond positively (adverts for sites or products the user has previously viewed) if they understand the marketing technology being used.

56% of those who understand why they’re being targeted say they’re ‘comfortable’ with seeing adverts based on their previous browsing behaviour.

But only 16% of those with low comprehension of how cookies work said the same, more than three times less than the high comprehension group.

17% of users with low comprehension said they can find it “alarming” to see an advert that is clearly targeting them based on previous browsing behaviour.

Psychologist and specialist in organisational behaviour, professor Sir Cary Cooper, believes for people unfamiliar with digital marketing technology, adverts can seem too relevant to be trusted.

He explains: "The cognitive bias that causes an individual to perceive that they're observing something more frequently than they actually are after their initial exposure is a powerful marketing technique. It's why follow-up emails are effective in sales.

“But when an individual is directly targeted with content specifically because they've just encountered it, for example an advert for a pair of shoes that appears to follow them around the internet, it can be alarming if they don't understand the mechanism driving it.”

“Many will wrongly, but understandably, believe that they're being targeted by nefarious means, rather than simply because a website dropped a cookie on their browser. That will make them suspicious.

For people unfamiliar with digital marketing technology, adverts can seem too relevant to be trusted.

“Even though users now actively consent to browser cookies use, they only become alarmed when the cookie is used to present them with relevant content likely to be of interest. We could call this the cookie paradox."

The study suggests there is a clear link between comprehension of digital marketing technology, in this case browser cookies, and trust in targeted online content.

Comprehension in general was highest among 18-24 year olds. 54% displayed high comprehension of how browser cookies worked.

Over-55s showed the lowest comprehension in general, but even so, a quarter demonstrated high or moderate comprehension.

Browser cookie comprehension by age group

Simon Leeming, commercial director and co-founder of Digital Media Stream, believes openness around how digital channels are used for marketing can be a positive thing for consumers.

“As the research suggests, distrust can arise from consumers simply not understanding why they are seeing a certain piece of content. Or worse, thinking they understand what’s going on when they don’t. For example, if you have no understanding of the mechanics behind why you’re seeing a certain advert, it can be quite alarming to see a retargeted advert.

“I think as an industry, we have a responsibility to be as open as possible with consumers on how we use their data and how the various marketing channels work. If trust increases as a result, that’s only going to benefit the industry as a whole.”