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U.S. Consumers Don’t Trust Your Marketing: Mend the Relationship and Avoid Regulators’ Fines with Smarter Data Practices

Sep 30, 2024

How B2C marketers target potential marketing and advertising leads is in the spotlight, as data shows consumers are unhappy with several practices.

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David Jani
U.S. Consumers Don’t Trust Your Marketing: Mend the Relationship and Avoid Regulators’ Fines with Smarter Data Practices

What we'll cover

A majority of global consumers see companies as the most responsible party for protecting customer data privacy. However, almost half of those surveyed in the US (48%) don’t trust that businesses follow marketing communication regulations and a majority are in favor of substantial fines against businesses that use deceptive marketing practices. These were some of the core findings of GetApp’s 2024 Advertising Preferences Survey, which analyzed the responses of nearly 6,000 consumers in 12 countries (496 from the United States).*

As recent enforcement cases demonstrate, regulators are tightening their scrutiny of businesses that violate data protection laws or advertising standard regulations. [1] Despite this intervention, many consumers are still highlighting bad experiences with digital marketing material and adverts online that could bring regulators down on companies.

With many consumers not trusting the way businesses handle marketing and data privacy, what can digital marketers do to reverse the trend and win back trust? Meeting this goal is going to require a rethink of how data is collected and used and a careful review of how campaign messaging content is planned and shared.

Key insights:

  • 30% of US respondents feel negative about targeted/personalized online advertising compared to a global average of 19%

  • 40% of US consumers say they have previously stopped doing business with companies that use deceptive marketing tactics 

  • 89% in the US say companies that use deceptive marketing practices should receive substantial fines

  • 71% of consumers globally say companies bear the most responsibility for protecting data privacy outside of government and industry regulations

Consumers are wary of sharing their data, despite wanting personalized ads

Companies walk an increasingly tricky tightrope when it comes to marketing and advertising to customers. Data is key to targeting and tracking leads for CRM purposes, but recent regulations are popping up across states, such as the California Privacy Rights Act (CRPA), [2] which limit some of the methods businesses can use to acquire and utilize personal data.

There are also signs that customers are more mindful of how they are targeted by marketers and are showing resistance to it. Whether it’s because they feel that a single purchase leads to repetitive ads for the already purchased product, or because they desire not to be tracked online, perceptions of personalized marketing and advertising in the US are slightly more negative than globally.

We found that nearly a third (30%) of US consumers feel negatively about companies tracking their online data for personalized ad experiences, compared to a global average of 19%. 

The backlash appears to be significant as well, with many US consumers also showing resistance to sharing data with companies for personalization. Almost one-third (32%) of Americans surveyed are strongly opposed to sharing their personal data in exchange for targeted advertising, the highest figure globally.

This is not to say that customers dislike personalized adverts entirely. We found in our data that most (73%) say they prefer ads that have been adjusted to their tastes rather than generic ones. This trend suggests there is a missed opportunity for marketers if the negative perceptions of personal data tracking persist. 

The reluctance by consumers to share personal data presents a problem as the symbiotic relationship between customers and marketers is looking strained. Customer buy-in on data sharing is a necessity for gaining access to B2C data that can drive lead generation and sales. Therefore, there is an increasing need to win back customers with trustworthy tactics.

US customers cut and run when misled by marketers

Another factor that is affecting customer engagement with marketing and advertising is misleading content.

False promises about products or services are as old as time but the regulatory net has tightened significantly in the modern era. In the last few years, companies have paid the price for such practices, notably with telecom giants receiving heavy fines from regulators for using deceptive methods in advertising, and promising pricing tariffs that were misleading to customers in their marketing. [3]

While businesses of any size should rightly be concerned about regulatory consequences for misleading marketing material, negative customer responses can also be highly damaging, especially for smaller businesses.

CAP_09262024_USConsumersDontTrustYourMarketing-strongaction

As demonstrated by the findings in the graph above, US consumers are willing to react firmly when misled by marketing and advertising material. Most seriously, nearly half (40%) say they have stopped doing business with companies using deceptive marketing practices. Americans are also much more likely to make a direct complaint to a company if they’ve experienced deception, making this a concern in terms of managing customer support interactions as well.

Lawsuits beckon for deceptive marketers

Misleading marketing or advertising content can alienate customers and result in a violation of the Federal Trade Commission (FTC). 

The FTC stipulates that businesses must ensure their “advertising is truthful” in compliance with the FTC Act. [4] Failure to meet this standard immediately after receiving a written warning from the organization can result in a federal lawsuit against a company.

Customers want much tougher action taken against deceptive marketing

Another finding that marketers should take into account is that the majority of consumers want to see stricter penalties leveled against deceptive marketing. There is a strong feeling amongst our US respondents that substantial fines are appropriate as a measure against companies using deceptive marketing practices.

CAP_09262024_USConsumersDontTrustYourMarketing-riseindeceptivemarketing

This is fuelled somewhat by a perception that deceptive marketing and more restrictive advertising practices are growing. Most in our sample indicate that they encounter more deceptive advertising or unskippable ads than they did two years ago, underscoring the growing wariness amongst consumers towards more pervasive marketing and advertising practices.

Additionally, there is seemingly little belief that businesses are playing by the rules when it comes to marketing communications. Almost half (48%) of the sample don’t trust that companies are following regulatory guidelines for communications, which is far from a strong vote of confidence in the practices of US marketers.

Information misuse is likely to get companies reported to regulators

It is always essential to demonstrate that your business’s marketing efforts are compliant with state and federal regulations and industry standards. However, even where tactics are more risky, knowing where the line of acceptability lies can help avoid accidentally breaking the rules.  

Transgressions can have big consequences. For example, the FTC fined social media platform Twitter (now X) $150 Million for using phone numbers and email addresses for ad personalization without permission. [5] This specific infraction was highlighted by over half (55%) of our sample of US consumers as a reportable offense. Amongst respondents this was considered the most serious infringement overall.

CAP_09262024_USConsumersDontTrustYourMarketing-regulator

The data in our study shows that US consumers have especially little patience for misuse of their personal information, especially when permission is not properly sought. This is likely galvanized by a widespread view, held by two-thirds (67%) of our sample of American consumers, that companies have the most responsibility for protecting data privacy, besides governments and industry regulators.

Companies therefore should ensure they take the responsibility of customer data seriously. This may require a rethink of data management and the information that is collected by marketers and how it is used, especially if this is currently straying too close to a breach of customer trust or privacy. For example, if your company collects data that is seen as unnecessary (like location or gender) for using a website or service this could create a wedge that leads to fewer in your audience providing information willingly.

Trust is low, it’s time to turn consumer perceptions around

Our findings so far have shown considerable negativity from consumers toward bad marketing behavior, which is being vindicated by examples of malpractice. There are many areas where consumer trust is low and where support is being withdrawn. This is a big enough problem now but could be a much worse issue if the negative sentiment festers for too long. 

However, clear lessons shine through. The respondents in our study have not given up on B2C focused companies entirely and do see them as legitimate holders of their data. Nevertheless, they do want to ensure their data is used transparently and for marketers to respect their choices, rather than overwhelm them with communications for quick wins or restrict their preferences. To earn back trust, companies can apply the following practices to keep things on track:  

  1. Demonstrate data transparency: Companies must maintain a position of trust and must take steps (if they do not already) to uphold good data practices. This means complying with GDPR and ensuring data management and data protection are properly monitored. A compliance system can help companies ensure their processes meet industry and ethical standards.

  2. Mind your retention: Retention is the key to ensuring a steady stream of user data. If you’re doing something that turns consumers off, you’ll lose that access. CRM software has many useful features for tracking leads, customer responses, and retention of your target audience. These, alongside marketing analytics tools, can help create a clearer picture of the marketing methods that work and those that don’t.  

  3. Plan and adjust content appropriately: The content you send consumers counts. It needs to engage your audience. More importantly, it mustn’t offend, as highlighted by half of our US sample, and should aim not to mislead. It is advisable to utilize diverse and representative viewpoints within the organization at the content planning stage to ensure marketing content achieves these goals. Using digital asset management (DAM) software can help in this mission by simplifying the process of reviewing digital content and gaining useful feedback from various stakeholders.  

  4. Monitor perceptions: Are you succeeding or failing with your audience? Knowing quickly can help nip potential backlashes in the bud. It’s important to practice social listening to ensure your audience's perception is on track and that you can act quickly when compliance targets are missed.

Marketers are under pressure to perform, and the temptation to bend the rules for quick results can be strong. However, our study's findings show that taking this too far risks alienating customers and possibly being reported to authorities. 

Damage to a brand’s reputation can be a sticky issue and customer patience should be taken into account when planning a B2C marketing strategy. Our second report also examines the situation surrounding audience pushback but looks closer at some of the core behaviors that are disengaging audiences. This includes methods such as spamming consumers with communications and a tendency towards increasingly intrusive advertisements. 

Survey methodology

*GetApp's Advertising Preferences Survey was conducted in July 2024 among 5,996 respondents in the U.S. (n=496), Canada (n=500), India (n=500), Brazil (n=500), Mexico (n=500), the U.K. (n=500), France (n=500), Italy (n=500), Germany (n=500), Spain (n=500), Australia (n=500), and Japan (n=500). The goal of the study was to explore how companies are marketing to consumers and how they are adapting to changing regulations. Respondents were screened to search online for products once a month or more often. They must also receive digital marketing communications several times a month or more often.

Sources

  1. US FTC fines CarShield $10 mln for deceptive ads, including by celebrities, Reuters 

  2. Law & Regulations, California Privacy Protection Agency (CPPA) 

  3. AT&T, Verizon, and T-Mobile fined $10.2 million for 'deceptive advertising', Android Police  

  4. Truth In Advertising, Federal Trade Commission 

  5. Twitter Agrees with DOJ and FTC to Pay $150 Million Civil Penalty and to Implement Comprehensive Compliance Program to Resolve Alleged Data Privacy Violations, United States Department of Justice

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About the author

David Jani

David Jani is a content analyst at GetApp. With a background in tech journalism, public relations, and marketing, he uses his extensive experience to provide actionable insights for small and midsize businesses.

David’s research and analysis is informed by more than 150,000 authentic user reviews on GetApp and nearly 3,000 interactions between GetApp software advisors and software buyers.

His thought leadership work has been featured in TechRadar, Startups Magazine, and Raconteur.
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