Future of Advertising?

It doesn’t take a weatherman to tell which way the wind blows (Dylan).

The storm clouds are gathering and something is going to change in the seascape of online targeted media. Re-targeting, behavioral targeting, contextual targeting, etc all mean the same thing. The IP address has been cookied and the advertiser can track that user’s behavior and serve up ads that are better targeted to that user.

Conceptually it makes sense, especially as online banner effeciencies continue to decline. However there is a certain “creepy” factor to all of this. I for one am sick of getting the same ad delivered to me daily simply b/c I visited a site and did not “convert”, and would advocate for an opt-out button on retargeted ads.

One such retargeting company Fetchbak is doing just that and it may be a portend of things to come.

The FTC is taking a hard look at online targeting and based on the past of the new FTC commissioners I personally would not be surprised to see some changes coming soon. I have no interest in predicting but they might be but the cautious advertiser or agency should prepare for the worst.

The IAB is taking a step in the Fetchback direction by letting the consumer know that they are in fact being targeted.

If done properly, with good creative, and good frequency practices (i.e. the creative doesn’t scream “hey i’m watching you” and if I don’t convert after x impressions you leave me alone) this online targeting is very beneficial to the user (in my opinion).

But I am happy that the FTC and the IAB are taking note and we get ahead of this before things get all Minority Report on the consumers.

Yahoo! is expected to launch new tools for advertisers today. Advertisers will have the ability to target and customize display ads based on users search history and the websites they have visited. Read more in the Reuters coverage.

Next month, Yahoo! also plans to offer day parting and demographic targeting. Day parting could not come soon enough, but I’m skeptical about the functionality of the demographic targeting. Still, it’s good to see Yahoo! making these important attempts to increase the control advertisers have over their campaigns.

Yesterday’s Washington Post presented online advertising bloggers such as myself with this gem.  The gist of the article, “Facebook Ads Target You Where It Hurts,” is that the author was offended by what she perceived as over-the-top targeting by advertisers, which was allowed by Facebook.  Unfortunately, Rachel Beckman does not understand the way advertisers are allowed to target on Facebook, thus creating one the biggest journalistic faux pas– presentation of misleading information.

It is important to understand exactly how an advertiser might target their ads to understand where the flaws are in this article, so let’s go straight to the source and take a look.  I’ll go through the steps in question and show you screenshots so you can judge for yourself.

We begin by clicking the small “advertising” hyperlink at the bottom of the Facebook login page, bringing us to two options: Social Ads and Facebook Pages.  For this, I am only interested in Social Ads.

The process is pretty straightforward from here.

Step 1: What URL do you want your ads to direct traffic to?

Step 2: Write a compelling ad and include an interesting picture.

Step 3: Target your ad. Here are your options:

The third step is where Ms. Beckman gets it wrong.  You can only go so far with your targeting, and it is all based upon user-provided data.  For this example, I know my product will appeal to cat lovers, but that is too broad for my limited advertising dollars.  Therefore, I added a few corporations which have a reputation for being somewhat sinister, figuring that any cat lover who works for them might also be an “evil” cat lover and a potential Bonsai Kitten customer.  Drilling down to this level has provided me with approximately 100 people, who I can hit over and over again with a small budget until I convince them of the wisdom and aesthetics that only Bonsai Kitten can provide.

The same is true of the advertiser who placed the Muffin Top social media marketing ad which so offended Ms. Beckman.  They did not know that Ms. Beckman was concerned about her weight, but they did know a few generalities about America and a few specifics about Ms. Beckman.  Starting with the newsworthy, The Post recently reported that two thirds of all adults in America are overweight or obese.

If I’m an advertiser of a diet product, I can thus conclude that showing an ad to a random set of 100 Americans will net 66 potential customers for my product.  Taking it a step further, we all know from anecdote that brides-to-be universally worry about how they will look in “the dress.” Therefore, if we target women who are engaged, we almost guarantee* ourselves close to 66%  who are overweight, while the remaining 34% will be self conscious about their weight anyway.  It seems their guess was correct and they effectively reached Ms. Beckman, causing her to evaluate their ad (though not perhaps in the way they wished).

Ms. Beckman’s points on the targeting are correct up until this assertion: “Facebook Ads, which targets users’ presumed areas of interest (or psychological soft spots).”  They do no such thing.  All of the psychological aspects are inferred by the advertiser from anecdote and statistic.  The fact that they are correct only indicates that the advertiser did their job, not that Facebook colluded with them to dig in to users’ most fundamental insecurities.  Further, it is the advertiser doing the targeting, not Facebook.  Facebook set up a system with rules and information available for advertisers, the users provide that information.  I hold that Facebook should not be accused of violating some sort of public trust.  Ms. Beckman even recounts how Facebook revised its rules based on user complaints such as hers.

Fundamentally, this type of targeted advertisement serves both user’s and advertiser’s interests, resulting in a more efficient advertising market and better returns for all involved, end user included.  I am a cyclist, and the fact that Facebook, Google and others see fit to serve me predominantly cycling-related ads benefits me more than when I am watching “male” TV programming and see ads for lite beer and Chevrolets.

I welcome this type of targeted advertising, and as an online marketing professional, will continue to use it to reach my client’s marketing goals.  Bonsai Kitten anyone?

*Statistical variation notwithstanding.

The new Hispanic Fact Pack (HFP) was released a few days ago. The title of the release article on AdAge is “What’s Up (and Down) in the U.S. Hispanic Market.” From one Hispanic search marketer’s perspective, here’s what’s up (and down) in the Fact Pack:

At a quick glance of the “Table Of Contents,” there is an enhanced “Digital Media Usage” section, but most of the added data is related to mobile usage and some of last year’s info is left off entirely.

The “Internet Activities” section is significantly more detailed this year, including 31 categories of internet activities, compared to 2007’s 14 activities. In 2008, the HFP breaks out purchases for personal versus business use and at least ten different vertical-specific activities compared to last year. This is significantly more useful data relative to whether Hispanics online generally spent more time emailing or sending photos.

The Online Demographics data from last year was replaced with a chart on Hispanic mobile user demographics. Couldn’t AdAge have kept the Online Demographics chart and added the Mobile User chart? I was disappointed not to see an update to the Online Demo chart from 2007.

The Top 10 Web Properties Among Hispanic Users (by language) charts remained this year and, as expected, showed the increase in reach and numbers of unique visitors in both Spanish and English pretty much across the board.

The statistics in “Keeping Up With Technology” (this one is even detailed by various language preferences and age) and “Top Online Member Communities” are both nice additions.

So, a mixed review after much anticipation. The Hispanic Fact Pack contains little data regarding the Hispanic online market, replaced this year by mobile market data instead. If I didn’t know first-hand the substantial size of the Hispanic online population, I might think mobile was more popular. For a layperson, the Fact Pack could be somewhat misleading; for someone in the industry, it lacks the substance sometimes needed to convince clients. Exact numbers or not, I know that the Hispanic online market is huge and growing, and I’ll just have to bank on clients trusting my direct experience over detached data.

Last Friday,Google announced a new feature for AdWords advertisers utilizing content networks and media placements—demographic bidding. This could potentially be a great asset for all advertisers, particularly those with a specific product or service offering. Demographic bidding, often referred to as demographic targeting, allows one to deliver ads to a particular age group, gender or combination of those statistics. The service is available only through some sites, such as MySpace, Friendster, BlackPlanet or other sites that ask users to log in and define personal information. Google’s demographic targeting is not yet available with PPC management campaigns.

It is somewhat surprising that Google is just now offering this service, seeing as though Yahoo! has offered it “for a while now” (according to Kristen Warcham, Yahoo!’s director of corporate communication in an email to DMNews) as has MSN adCenter. We have tinkered with MSN’s demographic targeting for one of our client’s PPC management campaigns. In fact, our early experiments with the service were so new and revealing that we won a DMA ECHO Award for the campaign (you can check out a case study of the innovative we developed campaign and learn more about our findings).

We, too, thought demographic targeting was an amazing opportunity, especially for this particular client, which had a keen understanding of their target audience. However, there are still a number of kinks (or maybe I should say inefficiencies) associated with the service. Namely, people have to be logged in to their MSN account before searching and those people had to be honest when entering personal information—and both requirements are iffy.

I am loath to jump on the band wagon with this and sign up every client, but Google’s setup is a bit more promising than the other engines. Because Google is only offering demographic targeting on sites that people must log in to use and limiting it to media buying and contextual marketing, the service just may work. We will, no doubt, test this service with our clients that will most benefit; however, I am sure Google will have their own kinks (inefficiencies?) to work out before demographic targeting becomes a standard.

Google just announced a new demographic targeting system which, in the PPC HandyMan’s opinion, is a copy of Microsoft’s demographic targeting. One big difference, Google is just launching this for content targeting at present, not yet for search.

The MSN system relies on an asset that Google lacks, the MSN Passport. What the passport adds is voluntary personal information (given in exchange for using free MSN products like hotmail and messenger), which can then be used to deliver more targeted ads to specific users. The big limitation is that while Microsoft AdCenter likes to give the impression that they are able to target anyone who uses their search products, they are far from achieving this. The reality is that they can only deliver targeted ads to the 10% – 20% of searchers that also are Passport users, and it may even be that the user needs to be logged in at the time (it’s proprietary information I haven’t been able to get).

Google eschewed this semi-intrusive data collection system from the beginning. Instead, they gave away their service, and made it up on ad revenue. Now they are realizing to keep double digit annual growth, they need to optimize their ad service to target narrower parameters. Google has been in the process of setting up their own mail and messaging platforms, but still they preferred to deliver ads based on searches and relevant content.

Until now. I find it very interesting, though, that Google is not trying to collect any truly personal data from their millions of users. Rather, they are partnering with other sites which will anonymize the data, pass it to Google, and then Google will deliver targeted ads based on who the advertisers want to reach. The stark difference in methods for what is essentially the same demo-delivery concept illustrates that Google still believes very much in the “Don’t be Evil” mantra they developed in their infancy.

Also interesting is the choice to copy MSN’s increase-bid-percentage scheme of bid increases, rather than have it scale by absolute numbers. If you are attempting to use this system, just make sure you understand the implications of using this model on high volume terms.

If past record holds true, Google’s system will be about 1,000X more user-friendly, and likely more effective. Having so many parties involved may eventually complicate the system, but there is some real potential to get into some media buy style demographic targeting. Cheers to that!

As an online marketer, I’m frequently amazed at the technological innovations that ad distribution networks come up with. We call most of what they do “targeting”, but in short, they figure out information about you which marketers can then use to show more specific ads. There are two conflicting arguments about the ethics of this type of technology. On the one side, privacy advocates hold that this is an invasive misuse of user data and should not be engaged in. On the other side of things are marketers who defend the technology on the basis that it allows them to show you ads for products more likely to be of use to you than they could if everything was random.

Personally, I’m a little ways into both camps, but I thought it would be interesting to illustrate just how effective this technology has become. Here is a screenshot from when I was logging into PhotoBucket to manage some photos for this very blog.

You will notice the two prominent ads. The MSN ad was likely populated because I have PPC engines in my search history (AdWords, Yahoo, and even MSN – looks like they haven’t yet implemented negative matching). The Rich Dad, Poor Dad ad was delivered because for some strange reason, our Colorado office has a Atlanta IP Address. Both of these ads (assuming my IP Address was set up correctly) are incredibly targeted.

Once this technology migrates onto other mediums like radio and TV, the privacy concerns, as well as the frenzy of marketers, will increase dramatically. I don’t have an answer to the right or wrong of it, just don’t be surprised when this all comes to pass. I give it 4 years.