Why People Should Chill Out About Targeted Advertising

The other day, I was reading a news article when a skyscraper banner ad to the right of the story caught my eye. It was for a particular bass guitar, which was for sale on Amazon. I happen to be in the market for a new bass, and this model looked like one that I might like. So I clicked on the ad to take a closer look and then and browsed through a few other options.

I didn’t end up buying anything, only because I have more a little research to do before I make a decision. But I will make a purchase within the next few weeks. Maybe I’ll get one through Amazon. Either way, I couldn’t help but notice something rather incredible about the aforementioned experience: I actually clicked on a banner ad on a website.

This was probably the second or third time I have ever done this in my life, despite being served probably millions of ad impressions since I first encountered the Internet via a dial-up-connected AOL account. I’ve clicked on text ads in Google search results and on the occasional Facebook ad, but like most Web users, display banner ads have always fallen into my blind spot while I’m browsing. I rarely even notice them.

This phenomenon is by no means limited to the digital world in which we now live. As a teenager, I would bemoan the number of full-page ads in the magazines I’d pick up, as I flipped through the cologne stench in search of articles to read. To this day, I can’t bear to sit through a television commercial. Most of them are weirdly manipulative and completely irrelevant to my life.

The Value For Consumers

On the Internet, my relationship with advertising has begun to change. Thanks to the social graph, search engines and ad targeting technology, I’m seeing more advertisements for things that actually interest me. Instead of an annoyance, ads can be useful to me as a consumer. This is a concept I never knew growing up.

As tolerant – cautiously supportive, even – as I am of targeted online advertising, it just so happens that I am in the minority. The latest evidence illustrating this fact came last week with the release of a study by the Pew Internet and American Life Project. According to the survey, 68% of American consumers have a negative view of targeted online advertising.

Above all, people take issue with the privacy implications associated with personalized ads. To know which ads to deliver, marketers and ad networks need data about consumers. Whether they get it from your search history, the data you pump into Facebook or by tracking your browsing history, they have to get that information somehow. This creeps a lot of people out.

To be sure, companies do have a special obligation to keep their online advertising practices transparent and easy to opt out of for those who don’t wish to participate. They also should never expose private data in any kind of a public way, as Google learned the hard way with their launch of Buzz.

The “Do Not Track” initiatives outlined by the FTC and being undertaken by Mozilla and Google are necessary to protect consumers’ privacy and ensure that the way this data gets collected is indeed transparent.

As long as privacy controls are available and private data is never made public against anyone’s wishes, I see no problem with targeted ads.

The Value For Publishers (And in Theory, the Public Good)

Not only do personalized ads make for a more relevant and enjoyable experience, but in theory, they should make life easier for publishers down the line. It’s no secret the traditional news business is in peril. For the time being, print publishers trying to make the transition to the Web are still seeing more lucrative ad sales per unit in print than they are online, even as readers flock to the Web and mobile platforms to get their news.

There’s been a lot of handwringing in the journalism world over the last few years, especially when the recession was at its peak. One of the concerns is that as news makes the transition from paper to pixels and vital resource are cut back at traditional operations, we could lose some of the best journalism, which many view as the lifeblood of democracy.

There’s certainly a case to be made that the Web is improving journalism (even if it also has a way of dumbing it down in some cases), but the concerns about the future of news and how to financially support the best reporting are not without merit.

Advertisers are themselves still making the transition from traditional to new media, but it’s easy to imagine that to many marketers, measurable, more effective units will have more value – and thus be worthy of a higher ad spend – than the old, one-size-fits-all advertising model. Sure, some ad campaigns will still be more effective for building brand recognition than encouraging immediate consumer action, but even those ads would be better served to the right people.

Of course, there are major differences in the economics of advertising online and advertising in traditional mass media. It’s not as though the companies formerly known as newspapers are going to suddenly replace their old print revenue with a single, digital revenue stream. But the more effective digital advertising becomes, the more valuable it will be.

Newspaper boy photo by Kelly B.

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