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Targeted Online Ads: Awareness of Shoppers’ Concerns Can Improve Your Insights Into Their Preferences

Posted By: SGK September 13, 2012

Targeted online ads are causing a stir right now. Strictly speaking, they are a marketer’s friend – putting ads for pertinent products in front of consumers whose interests are already proven by actions they have taken, such as “liking” topics or products or politicians or a band.

But individuals and groups are taking exception to some targeted ads for various reasons, and the issue is likely to get hotter. Why? Because the targeting technology continues to improve, and popular social media sites and webmail providers are making more use of the data they collect as they perceive that web users are growing more comfortable with targeted ads and as advertisers grow more convinced of their effectiveness.

As an example of the tensions, there are both anecdotal and proven cases of users being offended or deeply inconvenienced by targeted ads that seem to imply something about them that isn’t true or that they wish to keep private. As we write this, one large webmail provider is dealing with accusations that it has made inferences – based on users’ names – about their ethnic backgrounds and has pushed ads that are refined accordingly.

More broadly, some webmail users are made uncomfortable that a service – even a free one – is “reading” the contents of their e-mails, even though the analysis is essentially keyword-based, much as search engines analyze search terms. And countless internet users still do a double take when they realize an ad is targeted, even for a product they’re interested in or have bought.

Researchers are even studying the effect of targeted political ads on the electorate. Do they tend to polarize us by reinforcing our inclinations? These theories are hard to prove. For instance, the common wisdom that negative political ads work has been thoroughly tested lately and still remains in doubt.

Anyway, when it comes to life online, we’re used to anonymity online, and being targeted takes some getting used to.

But what’s on the other side of the argument? Well, often a targeted ad beats the alternative. From a consumer perspective, we’re hit with branded messages all day long, thousands of them according to some studies. We accept them on TV or on the radio, unless we want to use a DVR or pay a premium for ad-free streaming music. And in some rare cases, we relish them, as when watching the Super Bowl. It’s likely that targeted ads are another feature of internet life that we’ll have learn to accept. But why?

The answer is obvious to marketers if not to all consumers: content and services cost their providers money to generate, and ads help offset the costs and, theoretically, generate profits. TV and radio users – and newspaper and magazine readers – understand this, but when they migrate online, they often seem to take on a different mindset. The internet has provided so much for free for so long – even things we would pay for in a different medium – that users now expect it. So ads can feel not only intrusive but presumptuous and inconsiderate.

This suggests a tactic that internet businesses should consider: a bit more openness about how they target and why. Ignorance on the part of users can turn into resistance quickly – and spread – whether it’s justified or not. Websites’ targeting practices become public knowledge anyway, so perhaps pro-active transparency is a good idea.

And finally there’s a long-term business benefit to getting web users to understand that their favorite sites are run by, well, businesses that have to monetize their services.

In other words, in the same way targeted ads show insight into users’ shopping preferences, online businesses also need to show insight into users’ concerns, to get the full benefit of their targeted ads.