21 Aug 2025

Previously: advertising personalization: good for you?

Looks like the Dubé et al. paper, a review of claimed benefits for personalized advertising, is making the rounds again. The Intended and Unintended Consequences of Privacy Regulation for Consumer Marketing by Jean-Pierre Dubé, John G. Lynch, Dirk Bergemann, Mert Demirer, Avi Goldfarb, Garrett Johnson, Anja Lambrecht, Tesary Lin, Anna Tuchman, Catherine E. Tucker. One argument that the paper makes against restricting personalized ads is that

Current regulations tend to favor high-income consumers with stronger privacy preferences.

We know that people have different preferences about personalized advertising and, of course, that some people have more money than others, but more research needs to be done to understand the connection between how much money someone has and how much value they put on privacy and personalized advertising.

The idea that more privilege of some kind leads to less tolerance for personalized ads seems implausible. Having more money makes your experience of personalized ads better. Personally, I’m well enough off that in an ad-supported context where I’m identifiable, I get pretty high-quality personalized ads on average. SaaS subscriptions, fancy conferences, sharp outfits—and far fewer of the deceptive offers that older and/or poorer people get, or that I get when less accurately targeted. If it were just about preferences being formed by users based on their current income or net worth, then the richer people should like the personalized ads more.

Other news and academic literature suggests a much more plausible cause and effect relationship. It’s not that wealthier people choose privacy over personalization, but that people who choose privacy build more wealth. Although a typical personalized ad is likely to be somewhat better than a typical non-personalized ad—because an ad campaign with a creative budget is likely to also have a data budget—the benefits of personalization, of usually getting an ad that’s better matched to you, are swamped by the risks of being more accurately targeted for a win-lose deal.

In a recent announcement, Google called turning off personalized ads a protection. If it’s a protection, what are the users who don’t get the personalized ads being protected from? One answer is that they’re being protected from the kinds of targeted win-lose offers—for predatory finance, gambling, and deceptively sold products—that interfere with building wealth.

From a policy point of view it will be important to address the question: are people with more money choosing privacy, or are people who prefer privacy accumulating more money? If it’s the first, then a lot of the Dubé et al. arguments would apply. But it it’s the second, it would be counterproductive for a state to interfere with wealth-building by its residents by pursuing policies that make advertising personalization harder to avoid. More easily available privacy protections would tend to increase prosperity in that state in the future.

Large platform companies already have some data that would help understand this issue, because they have data or inferences about a user’s age, net worth and privacy preferences. I suggest a research project.

  • Look at data from 10 years ago, and identify cohorts of privacy-preferring Disabling access to Facebook by Janos Gyerik (From 2013. Remember when this was all you had to do about tracking by the company that became Meta? We didn’t know how good we had it.) and personalization-preferring users with similar ages and incomes

  • Then compare to the same users today. I predict that on average, a person who chose more privacy and less personalization in 2015 would have a higher net worth in 2025 than a person who did not.

This is another one of those questions that personalized ad advocates have the data to answer but somehow haven’t.