A deep, persistent lack of understanding about how personal data is used among Australians is proving to be a major challenge for brands and agencies trying to build trust in digital advertising, according to Yahoo and Magna research.
The study, which surveyed over 1,200 Australians, found that despite increasing concerns over online privacy, consumers remain unaware of their rights, responsibilities and the mechanisms behind ad personalisation, causing resistance to targeting tactics.
Only 14% of Australians were found to believe they have adequate resources to protect their personal data online, leaving 86% unsure or unprotected. Meanwhile, 74% of consumers don’t realise they can opt out of data collection on media and shopping platforms, suggesting that data control remains a mystery for many.
The report found that while 53% of Australians cite hacking as their biggest online privacy concern, only 1% are concerned about personalised advertising – highlighting an overall comfort with data used for tailored experiences.
It also found less than a third of Australians understand that advertisers and agencies do not have direct access to their data, reinforcing the massive gap in education. The findings also revealed that when data usage is explained properly, approval for personalised ads jumps 88%, proving that transparency can shift attitudes significantly.
The widespread confusion is causing consumers to rely on protection from Government regulations. More than 80% believe Australia’s privacy laws are effective, despite just 10% saying they are familiar with the details of the Privacy Act.
Dan Richardson
“Data privacy and targeted advertising have been hot topics for years, yet many Australians still don’t fully understand how their data is used or who is responsible for protecting it,” Dan Richardson, director of data and insights at Yahoo AUSEA, said.
“This isn’t just an awareness issue – it’s a trust issue. If we don’t bridge this gap, we risk losing consumer confidence, leading to stricter policies and less effective advertising.
“The good news is that when people understand data use, their attitudes shift. This research makes it clear – transparency and education are key to building trust and keeping personalisation effective for brands and audiences alike,” he added.
Lucy Formosa Morgan, managing director at Magna, added: “This data reveals a major disconnect. While consumers enjoy personalised experiences, they don’t understand how data powers them – and that’s a problem. If people don’t trust the ecosystem, they will push back against targeted advertising, and potentially the brands in question, making it harder for brands to connect with their audiences in meaningful ways.
“As an industry, we need to do better at explaining data usage in a clear, honest and accessible way. If we fail to educate, we fail to build trust – and without trust, digital advertising loses its effectiveness.”
As digital experiences become more personalised, education and transparency will be critical in building consumer trust. Yahoo DSP is committed to helping the industry bridge this gap by exploring strategies that ensure advertising is effective, connects authentically with audiences and upholds ethical and regulatory standards.