Advertising ethics online

Ethics of online advertisements are issues that have have seen a steady increase in the 21st century as a result of online promotions advertising becoming more common. As a result of the rapid shift that businesses and large corporations have made towards digital marketing in the 21st century, marketers have become increasingly scrutinized for their decisions in advertising their products. This has led to unforeseen changes in human vulnerability when interacting with advertisements. In other words, consumers are not surprised to see advertisements and their reactions doesn't vary from advertisement to advertisement. In a way, these advertisements has been normalized to the point where marketers can no longer predict the behavior of potential, targeted consumers.

Technological developments in advertising

Technological developments within the last decade have allowed large corporations to access the private data of users, including data such as location, search history, web browser cookies. This information can be used to tailor advertisements to people based on their individual preferences through advancements in machine learning Algorithms and various other techniques. This has led to heightened concerns in regards to many concerns user privacy, data protection, reach, and corporate transparency in advertising.

Targeted advertisements

Over the last decade, advancements in technology has led to more widespread use of targeted advertising. Targeted advertising is advertising carried out to specific demographics such as age, gender, location, purchase, and search history. More detailed personal information has generated concern. If privacy is “freedom from informational interference or intrusion, achieved thanks to a restriction on facts about her that are unknown or unknowable,” then online data collection for commercial purposes violates users' privacy. There is little to no information friction present that prevents targeted advertisements from retrieving information about people and their preferences. Targeted advertisements shed light on the lack of privacy in online interactions and address the whether or not having tailored advertising and information is in the best interest of the consumer.

Targeted advertisements leads to concern for the general population and pre-adulthood vulnerability as they are even more distressing when presented to younger consumers. A study conducted by Masaryk University surveyed 14-to-16-year-olds’ perceived privacy control and the effects of targeted advertisements. It was proven that while “privacy control salience” enabled more probable recognition of targeted advertisements by subjects, the subjects were more likely to be persuaded by the targeted advertisements.

An example of targeted ads on Amazon.com

It is proposed that a common solution for the privacy concerns of target advertising is to offer compensation for retrieving personal information. One proposal published in the Computer Networks journal proposes utilizing ad brokers who offer monetary compensation for personal information from consumers piece by piece and are paid for their services by advertisers. Such an exchange fulfills the Nash Equilibrium game theory, in which all players receive the best outcome, and has already come to life via data-payment cafes.

Ethical Issues

Unauthorized Purchases

One major ethical issue surrounding personalized ads has come from in-app purchases made by children without parental consent. Numerous mobile and web applications offer various premium upgrades which allows kids to make purchases through their parents' bank accounts without their agreement. This has led to numerous cases of children spending exuberant amounts of money within popular apps, resulting in legal action between parents and the companies who issue these apps.

In January of 2014, Apple Inc. agreed to a settlement with the Federal Trade Commission that required Apple to reimburse $32.5 million dollars in app store and in-app purchases to parents since children made purchases without the parents' consent. The settlement also required that Apple instill further security measures for in-app purchases, including getting explicit parental consent for any purchase in order to ensure informed consent prior to charging customers.

While enforcement of the Federal Trade Commission's ruling led Apple Inc. to take measures such as fingerprint identification and password requirement for all billing purposes, the issue of unauthorized purchases hasn't disappeared. The Federal Trade Commission mandated that Apple establish these changes by March 31, 2014, but a notorious since-deleted twitter rant by rap artist Kanye West made it clear that in-app purchases were still a problem.</blockquote>

Unwanted Exposure

Generating user-targeted advertisements carries the risk of the person behind the screen not being the intended user, leading to serious privacy concerns. Many sites can track user activity by IP address which allow them to multiple people on a single device to retrieve variety of ads. Additionally, the tech industry's trend towards an oligopoly has caused similar problems. When a user ask Google Home a question this can lead to pivotal information that is associated with their Google account and can lead to targeted ads on any device upon their Google account. Likewise, Facebook's purchase of Instagram has provided them access to reach over two of the four most popular social media platforms in the world, and information from either account can cross over. This poses as a threat of misinformation when using targeted ads as it can have extensive consequences.

The most notorious case occurred in 2011 when a family wasn't aware of their teen daughter's pregnancy until they received a Target mail coupon catalog full of baby items. The Forbes report on the incident shares that Target collects their purchase history information and combines it with demographic information which they buy from 3rd parties to create profiles to target each customer." This incident illustrates the breach of privacy and unwanted exposure for consumers when companies use targeted advertisements.

How much information is on file?

When users register for sites or browse them, they usually (whether inherently or explicitly) agree to the terms of usage of the sites. However, the vast majority of users don't read Terms and Conditions and thus aren't typically aware of what kind of information they share with corporations. This often leads to public outrage when certain aspects of a privacy or usage agreement leads to corporate practice that users may not like. That was the case in 2015 when Snapchat updated their terms of service, as it allow them to have "the rights to reproduce, modify and republish your photos and save those photos to Snapchat’s servers." This was a giant leap in size compared to how much data users were forfeiting to the company before, and since most users agreed to the terms without reading them it led to widespread outrage and extensive privacy concerns.

This type of problem has increased as more recent events have users questioning how broad a scope the terms can cover. Tech giants such as Facebook and Google are pushing the boundaries of what is normalized in user data collection, and generated controversy by collecting data without consent.

Facebook’s Cambridge Analytica data leak and Google Plus’ API bug are two of the larger scandals that has lead to concerns to the forefront of the legislative agenda. The former breach allowed Cambridge Analytica to access private user data that was used for political persuasion using methods similar to those used in targeted advertising. .A bug in an API update left private user data exposed to those who might use the API and led to the shutdown of Google+’s commercial platform.

While not all the collected information may be used for advertising purposes, it has been used for much more extreme practices (as was the case in the Cambridge Analytica scandal) and there's no telling which seemingly obscure data can be utilized to target consumers.