Privacy, please! Can personalised ads keep up?

Personalized advertising is at a crossroads, shaped by the twin forces of technological innovation and heightened consumer awareness of privacy and sustainability. With brands navigating this evolving landscape, the challenge lies in leveraging data-driven insights to create meaningful connections while adhering to ethical and sustainable practices.

As data privacy becomes a top priority, brands are rethinking their strategies. Shraddha Agarwal, Founder and CEO of Grapes, highlights the fine line between personalization and intrusion. "The problem with personalization is not showing an ad based on someone’s needs, but crafting the message in a way that becomes invasive. For instance, showing me a red dress is fine, but saying, ‘Hey, Shraddha, are you looking for a Valentine dress?’ crosses the line."

N Chandramouli, CEO of TRA Research, notes the growing dominance of big tech platforms like Google, Meta, and Amazon, which hold vast amounts of consumer data. "By 2025, consumers will accept that if a product is free, they are the product. This realization will drive the industry toward privacy-centric technologies like federated learning and first-party data strategies."

Hyper-targeted advertising has undeniable benefits, but it must align with ethical standards and sustainability goals. "Brands need robust governance frameworks to prioritize transparency, consent, and data minimization," says Chandramouli. He suggests regular audits and the use of green technologies for data processing to reduce environmental impact.

Shraddha echoes this sentiment, emphasizing creative packaging: "Instead of targeting 200 million people through an IPL sponsorship, brands can focus on smaller cohorts, like male cricket fans. Personalization can stay relevant if creativity is packaged thoughtfully."

The environmental impact of digital advertising is a growing concern. Shraddha underscores the importance of efficient targeting: "Personalized ads can help brands reach only the most relevant audiences, reducing digital noise and minimizing the carbon footprint." She also advocates for energy-efficient algorithms and carbon-neutral platforms.

Chandramouli adds that dynamic creatives across channels can further enhance efficiency: "Combining data with creativity and strategic placement minimizes ad wastage and delivers impactful experiences."

Personalized advertising, while powerful, comes with risks. Poorly crafted ads can lead to backlash, as Shraddha explains: "Remember the Zepto case during IPL? The issue wasn’t personalization but how it was packaged. Brands must be cautious about the conversations they’re having through personal ads."

To mitigate risks, she advises brands to embrace accountability: "Apologize and move on. PR teams shouldn’t have to clean up preventable mistakes." Chandramouli highlights the importance of diversifying advertising channels: "While personalized ads are great for re-engaging customers, brands must also explore new channels to attract fresh audiences."

Transparency and education are critical in building consumer trust. Shraddha praises initiatives like Meta’s reset feature: "Giving users the ability to reset their personalized content is empowering. Technology that takes consumer feedback into account can be a game-changer."

Vicky Kukreja, Founder and CEO of Anphonic, emphasizes the role of consumer awareness: "Today’s consumers want to know what they’re consuming, wearing, or drinking. Brands embracing education are seeing stronger adoption, while those failing to adapt are struggling."

The future of personalized advertising lies in striking a delicate balance between innovation, ethics, and sustainability. As brands navigate this terrain, they must prioritize consumer trust through transparency, thoughtful targeting, and responsible practices. By leveraging creativity and sustainability as cornerstones, personalized ads can continue to forge meaningful connections in an ever-evolving digital world.