Download Apr. 16, 2013 Executive Technology Strategies ETS 13-04

Apr. 16, 2013
EXECUTIVE TECHNOLOGY STRATEGIES
The Ads That Know Too Much
Original Author: Jessica Leber
Editor: Hal Kreitzman
ETS 13-04-07
April 17, 2013
Summary
The author proposes that in our rush to take advantage of personalized digital advertising,
there are certain marketing axioms that are being overlooked.
The author cites some comments made by academics that support her position.
“There’s been a focus on trying to identify the customers likely to purchase a product.
But that’s distinct from which customers will be influenced by advertising,” says
Catherine Tucker, an MIT Sloan School of Management professor who gave a keynote
address at an international data mining conference in February.
In the rush to use ever-more data about people, Tucker says, ads are too often shown to
those who have already decided whether to buy or not buy the product, or who have
bought it already (p4c4). “What we may be doing is wasting a lot of money.” Ultimately,
timing is everything (p5c5).
Tucker’s statements are backed up by some experiments that were conducted with Travel
companies where the results of personalized digital advertising were less effective than
general advertising.
The market for online display advertising is large and growing. According to eMarketer,
in 2012, companies in the U.S. spent nearly $2 billion to buy online display advertising
through real-time bidding platforms - allow algorithms to strike split-second deals about
which ad to show a person as his or her computer loads a web page, a negotiation that
often takes the ad recipient’s browsing history into account.
Another digital practice, termed “retargeting” is where a user’s behavior is recorded and
based on that information they are sent unsolicited ads. While advertisers believe that this
practice works, Tucker believes that there is room for improvement as the timing aspect
is not being considered. In other words, depending on the type of product or service,
retargeting might not work (p4c4).
Meanwhile, technologies that track ad performance are getting better. They are becoming
more popular, like Facebook and more device independent. For example, a startup called
C3metrics is perfecting ways to track not only people across multiple devices, but also to
track their “engagement” with mobile ads by determining whether they scrolled down far
enough to even see it, or whether they hovered their mouse over the ad on a webpage.
The author closes her article with the following comment, “With all of the money
involved, and marketers needing to be convinced that mobile ads are also effective, ads
Copyright © 2004-2013 Experture and Robert Frances Group, all rights reserved
PO Box 473, Kings Park, NY 11754; (917) 597-6717
http://www.experture.com/; Contact: [email protected]
Apr. 16, 2013
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 13-04-07
will surely continue to make smarter and smarter predictions. More than simply follow
you around the Web, they may also know what you actually want to buy.”
Editor Comments
I have written in the past about my concerns relating to invasion of privacy. At this
point in time it is possible to block pop-ups on Internet browsers. It is also possible
to register with the “do not call” registries to protect your privacy. We fully expect
that improvements in digital advertising will include these options, as there are a
number of users that do not want to be assaulted continuously with advertising.
However, is this an age thing? It’s very possible. In another article, Reaching digital
natives with native advertising written by Claire Bower (4/12/13), the author cites
that advertisers are reaching out to digital natives through, what she terms, “native
advertising”. The objective here is to embed ads in the viewed site’s native format so
that the users will more likely read the advertising.
We are skeptical (age thing again) as Claire also states that the likelihood of a user
clicking on a traditionally present web banner is less likely than surviving a plane
crash. Ultimately we believe that the likelihood of a user taking advantage of digital
advertising is almost entirely based on timing. Therefore, we agree with the author.
Call to Action
We expect that digital advertising will evolve to the point where user actions will
trigger real-time advertisements that match their need for such products and/or
services.
Vendors and/or service providers should keep abreast of developments in this area
as to take advantage once the correct approach is determined – at that point
competition will be fierce.
Links
Original Article
eMarketer reference
Reaching digital natives with native advertising
Copyright © 2004-2013 Experture and Robert Frances Group, all rights reserved
PO Box 473, Kings Park, NY 11754; (917) 597-6717
http://www.experture.com/; Contact: [email protected]