Surreal illustration of a digital cityscape with a privacy shield reflecting consumer concerns.

Are Privacy-Enhancing Technologies the Real Deal? Unveiling Consumer Perceptions in Online Advertising

Elliot Brynn in Tech & Innovation December 2025 • 4 min read.

"A deep dive into how consumers perceive privacy violations and whether current PETs truly address their concerns."

In an era defined by data collection and personalized advertising, consumer privacy has become a paramount concern. The online advertising industry, grappling with these concerns, has begun to develop privacy-enhancing technologies (PETs) as a potential solution. Initiatives like Google's Privacy Sandbox aim to strike a balance between effective advertising and user privacy, but the question remains: Do these technologies truly address consumer concerns, or are they merely a cosmetic fix?

Central to understanding this issue is the dual-privacy framework, which posits that consumers possess both intrinsic and instrumental preferences for privacy. Intrinsic preferences reflect a basic desire for confidentiality, while instrumental preferences are based on the perceived consequences of sharing personal data. By examining how different advertising practices affect these preferences, we can gain insights into consumers' perceived privacy violations (PPVs) and the effectiveness of PETs.

This article delves into recent research that explores consumer PPVs in response to various online advertising practices. By analyzing how consumers perceive tracking and targeting methods, we can better assess the potential of PETs to create a more privacy-conscious advertising ecosystem. Ultimately, this understanding can help advertisers and policymakers develop strategies that align with consumer expectations and foster greater trust.

Decoding Consumer Privacy Perceptions: What Matters Most?

Surreal illustration of a digital cityscape with a privacy shield reflecting consumer concerns.

A comprehensive study was conducted to gauge consumer reactions to different advertising practices, ranging from behavioral targeting to contextual advertising and the use of PETs. The research focused on understanding how tracking and targeting methods influenced consumers' perceived privacy violations (PPVs).

The key findings of the study reveal a nuanced landscape of consumer perceptions:

Behavioral Targeting: As the current industry standard, behavioral targeting—where consumer activity is tracked across the web—leads to high PPVs. Consumers are most concerned when their data is collected and used to create individual profiles.
Privacy-Enhancing Technologies (PETs): Technologies that keep data on the consumer's machine do lower PPV compared to behavioral targeting. However, the reduction is often marginal. Group-level targeting does not significantly differ from individual-level targeting in reducing PPV.
Contextual Targeting: This approach, which avoids cross-site tracking and targets consumers based on the content of the current webpage, significantly reduces PPVs. Consumers feel more comfortable when ads are relevant to their immediate browsing context.
Untargeted Ads vs. No Ads: Interestingly, consumers show indifference between seeing untargeted ads and not seeing ads at all, provided they are not being tracked.

These findings suggest that consumers are not just concerned about the technical aspects of data collection; they also consider how their data is used and whether they are being targeted with personalized ads. This underscores the importance of adopting a consumer-centric approach to privacy, one that goes beyond mere technical compliance.

The Path Forward: Balancing Advertising Effectiveness and Consumer Trust

The research highlights that consumer perceptions of privacy violations differ from technical definitions, necessitating a consumer-centric approach to online advertising. By understanding what truly concerns consumers, advertisers and policymakers can work together to create a more transparent and trustworthy digital ecosystem. As the online advertising landscape continues to evolve, prioritizing consumer privacy will be essential for fostering long-term sustainability and success.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

Everything You Need To Know

How do consumers generally react to behavioral targeting in online advertising, and why?

Consumers typically show high levels of perceived privacy violations (PPVs) when subjected to behavioral targeting. This is because behavioral targeting involves tracking consumer activity across the web to create individual profiles, which consumers find concerning. The core issue lies in the comprehensive data collection and the feeling of being individually profiled for advertising purposes.

Can privacy-enhancing technologies (PETs) fully alleviate consumer privacy concerns related to online advertising?

While privacy-enhancing technologies (PETs) do lower perceived privacy violations (PPVs) compared to behavioral targeting, the reduction is often marginal. Specifically, the study indicates that group-level targeting, a form of PET, does not significantly differ from individual-level targeting in reducing PPV. This suggests that consumers are still concerned about how their data is used, even if PETs are implemented. A consumer-centric approach requires considering how data is used and whether consumers are targeted with personalized ads, aspects not fully addressed by current PETs alone. More holistic approaches beyond PETs are needed.

What makes contextual targeting a more consumer-friendly approach compared to behavioral targeting?

Contextual targeting reduces perceived privacy violations (PPVs) significantly because it avoids cross-site tracking. Instead of tracking users across the web, ads are targeted based on the content of the current webpage the user is viewing. Consumers feel more comfortable when ads are relevant to their immediate browsing context, as it eliminates the feeling of being constantly watched and profiled. Contextual advertising connects the ads to the user's intent for being on that specific page. It has a reduced feeling of being a privacy violation because there isn't a broad and pervasive collection of data.

What does the indifference between untargeted ads and no ads at all, reveal about consumer privacy preferences?

The indifference consumers show between seeing untargeted ads and not seeing ads at all, provided they are not being tracked, highlights that the act of being tracked is a primary concern. Consumers prefer either not seeing ads or seeing ads that don't require extensive data collection. This indicates that the process of data collection and profiling, as seen in behavioral targeting, is what drives privacy concerns, rather than advertising itself. This reveals a deeper problem that needs to be addressed. It means that consumers may accept advertising if privacy isn't violated.

How can advertisers balance advertising effectiveness with the need to respect consumer privacy, based on consumer privacy perceptions?

Advertisers can balance advertising effectiveness with consumer privacy by adopting a consumer-centric approach. They should consider how different advertising practices affect intrinsic and instrumental privacy preferences. Prioritizing transparency and focusing on methods like contextual targeting, which align with immediate user context rather than broad data collection, can significantly reduce perceived privacy violations (PPVs). They must communicate their privacy practices and data usage policies. They should consider implementing privacy-enhancing technologies (PETs) as part of a holistic approach, but understand they are not a complete solution. By understanding and respecting consumer privacy, advertisers can foster greater trust and long-term sustainability in the online advertising ecosystem.