The ad-supported Internet

This is somewhat related to my last post about "the free lunch" that consumers get from ad-supported websites and services.

I ran across a presentation from the Interactive Advertising Bureau (IAB) about the current state of online advertising.  This slide jumped out at me for a couple reasons:

• The first bullet point says 70% of consumers want ad-supported services (read: free services where they'll tolerate a few ads) for video.  I'm shocked the stats only came back at 70%, because I would've expected that number to be closer to 90% or maybe more.  I don't think there are too many people who would be anxious to pay a bill for Internet video, just like they pay their cable bill and phone bill now.
  
  
• The second sentence in the second bullet point made me laugh.  "66% of all Internet users would click on more online ads if they were better targeted to them."  I guess this is a perfect example of how people can't predict their own behavior.  When given a survey question that says something like, "Would you click on more ads if they were more targeted to you?", I'd expect a large number of yes responses.  But when it comes to actual behavior, it's funny to see how far from the truth that is.
  

In late 2007, Facebook came out with a system called Beacon for better targeting of ads and offers based on its users' behaviors.  But Facebook was forced to pull back on this effort and remove it from default settings because of a huge public outcry that it was an invasion of users' privacy.  Likewise, behavioral targeting -- the targeting of ads based on users' behaviors -- was recently investigated by the U.S. Federal Trade Commission.

People say they'd click on more ads if they were more targeted, but the moment the ads become more targeted, users panic because they feel creeped out.  There's lots of data that digital marketers could be using -- for example, detailed click-through data on enewsletters that could be passed along to advertisers -- but most don't because of the fear of user backlash.  I don't know if this phenomenon will ever go away, or if the erosion of privacy will chip away at most users' objections to super-targeted ads and tracking information.