13 ms·

> I'm not convinced that targeted advertising even works. Yes, your intuition derived from a single anomalous data point (yourself) is definitely more accurate

> I'm not convinced that targeted advertising even works. Yes, your intuition derived from a single anomalous data point (yourself) is definitely more accurate than the companies which have seen demonstrable success from targeted advertising. If you wanted to argue that brand advertising doesn't work, I might agree. Brand advertisers tend not to have high standards of data analysis. Your publisher experience seems to actually be a case of wanting the former (targeted advertising) but getting the latter (brand advertisers), which can be a real problem because brand advertisers often overspend and undertarget.

jacquesm 11y ago
Does two datapoints help? As far as the success is concerned, the advertising company is hopping from one aggressive technology to another mostly because their techniques work but only for a while and then users tune out. So it may be that WB has a point that is rather stronger than you make it out to be.
- morgante 11y ago
  > Does two datapoints help? If we're comparing anecdotes, I'll offer the 3 companies I've helped build online advertising campaigns for which had a positive ROI. > hopping from one aggressive technology to another I'd agree with that if the argument was that "this specific ad technology" is going to fail. I totally agree that ex. clickbait headlines are a temporary boom which will disappear soon. But to argue that advertising as an industry is in a bubble, we'd need evidence that the industry is bigger than historically or what it can support. Which there just isn't evidence of (take a look at my other post).
  - jacquesm 11y ago
    Online ads are here to stay, there is no doubt - in my mind at least - about that. That said, the industry is in trouble, there seems to be a disconnect between the users and the products advertised hitherto unseen and many in the advertising industry are acutely aware of this. Nobody has found a silver bullet on how to fix this and it is only a matter of time before there will be some reaction to this ever decreasing engagement. Making an ad campaign that has a positive ROI is doable, but if you are that well embedded in the industry then you will quite likely agree with me that it has become quite a bit harder to achieve that today than it was in the past. The solution (performance based advertising) shifts the burden of the effectiveness of a campaign onto the wrong party (the owner of the inventory) which has resulted in a series of start-ups that optimize on behalf of inventory owner. This is all like watching eb-and-flood erode a beach and just like real life erosion there are turning points at which the situation can go from steady state to dynamic quite rapidly and it is anybody's guess what the new steady configuration will be once all the potential for movement has been exhausted. The ad industry is imo not exactly in a bubble as much as that they are more than a little bit worried about why the usual bag of tricks no longer works and how they plan on going back to when conversion rates were still something to be proud of. I don't doubt that this will initially be tackled with a wave of even more invasive advertising, or advertising masquerading as content. The problem is that what was initially an absolute boon for the advertising industry, that you can 'measure' engagement ended up being the exact problem, you can measure engagement, including a steady drop in engagement over time. And so, by making advertising more and more aggressive the industry has made it impossible - or nearly so - to make a non-aggressive campaign because it has to compete with all the aggressive ones for attention (from the users perspective it is a zero sum game, they only have 24 hours in a day and usually something else to do besides watching and engaging with ads, and if they don't then they are not exactly prime material for some demographic to begin with). So now there is a problem, which is that the ad industry can't suddenly stop reporting all these engagement metrics, nor can they pull more technological rabbits out of the hat that spawned all these new tricks because these too will work for a while and then run out. It's not a simple problem.
    - ThomPete 11y ago
      Nothing in marketing is ever going to be a silver bullet. The seconds something is shown as a slight improvement everyone is going to use that as their new strategy until it looses it's effect. The thing to remember about advertising is that at the end of the day it's really about finding ways to be different than it is about anything else. And so when everyone is doing TV ads, start doing online ads, when everyone is doing online ads, start making centent marketing, when everyone is doing content marketing use email and so on. It's an ever moving target. Thats why it's effective when it works.
    - AJ007 11y ago
      I've been running ad campaigns for about 10 years. The market seems to have done a fairly good job of balancing out inventory costs. If a publishers hammers their audience with ads they lose them. In the short term, people throw up their hands, but eventually those users move to greener pastures. There is a damn good reason the most dominant parties in advertising - Google and Facebook - have the tiniest, and most targeted, ads. There has yet to be a point at any time in the past decade where I said, this doesn't work, and shut all of the ad campaigns off. There definitely are issues that exist. There is a problem with mobile app ad quality. There definitely are bot traffic problems. The ad exchanges will be pretty brutal on inexperienced advertisers, but this was the case pre-exchange too. One "bubble" point is I suspect many of the adtech companies involved in exchange inventory may fine themselves on the line for the bot traffic. It will be enough to wipe out the investor equity. This follows based on class actions Google, Yahoo, and others have had to settle in the past and Google especially has always been aggressive about this stuff (although less so in the past two years.) I read the original blog post and the writer doesn't seem to make a very good case outside of things that happen in normal capitalism. Lots of middle men, tools, and supply chains attempting to add value along with investors dumping in a ton of money in an attempt to gain some return -- possibly more than they will ever get back out. Sounds like a healthy marketplace to me. Some ideas are terrible, some are good, some are amazing but will never return their investment. That is ok. The bigger problem is for small publishers and likely medium sized ones too. Ad inventory and the users online has ballooned many times over over the past decade. It also is a problem for traditional media companies like radio stations, newspapers, and television channels. I don't need to extrapolate on that one. Advertisers need to be sophisticated. They had to in the past too but few had access to tools that told them they sucked. I'm not sure that is any more extraordinary than asking a commodity traders purchasing cocoa beans to know what they are looking at and know how to be sure that is really what shows up at port.
- amelius 11y ago
  Another datapoint here.
- arrrg 11y ago
  Eh … targeted advertising certainly worked on me. Pretty definitely and pretty much guaranteed better than non-targeted ads. My purchasing decisions tend to be pretty long and drawn out (it will take me months to decide that I want, for example, a camera and then to decide which one I want), but targeted ads have several times caused me to pick up the slack and continue my line of investigation into what to buy. Their aggressiveness is an asset – and they also don’t really annoy me. Comical, sure, but they also remind me: Ah, I wanted to check out those cameras. Obviously it’s a blunt instrument and not a scalpel (we know for to little about how human brains work to make that work – we need the blunt approach), but it’s a different blunt instrument compared to other advertising.
  - jacquesm 11y ago
    Oh, they work alright, on a statistical basis. They work better than non-targeted advertising, that's all it takes. After all, you're definitely not the only person who can be influenced this way.
Arnt 11y ago
There was a story on HN the other day about someone who had definitely had success with targeted advertising. A company called Grasshopper, I think. It wasn't the first one. The problem is that although these stories exist, they're so rare. Drops in the ocean. All they say is that highly targeted advertising definitely works for a small part of one per cent of the advertisers. (Which isn't to say that it doesn't work for more. Maybe it does, I wouldn't know.)
- morgante 11y ago
  Probably the reason you don't see more stories about the effectiveness of advertising is because: (a) On HN, it doesn't match the ideological overtones so it won't be voted up. (b) In general, it's not interesting. Most business owners already know that advertising works and aren't terribly interested in hearing the obvious.
  - Arnt 11y ago
    There is a filter on HN, but that doesn't sat much about the unfiltered reality. Another commenter, who seems to know, says combining various targeting techniques typically gives 20-100% improvement over untargeted advertising. I'll trust his numbers. But is 20-100% enough to say "targeting works"?
    - jacquesm 11y ago
      The question then becomes is that 20-100% improvement over untargeted advertising as observed from the advertisers (not the agency or some tech layer in between) point of view also an improvement when compared with the same situation say 5 or 10 years ago. And if it isn't then there still is a problem (but a smaller one, that may or may not be repaired in time). And yes, targeting works. But non-animated banner ads also used to work, and they worked even better than quite a few targeted campaigns do today (hence the shift to performance based advertising rather than CPM and CPC campaigns, they are also much more resilient against fraud but much harder to properly set up).
      - 11y ago
coldtea 11y ago
>Yes, your intuition derived from a single anomalous data point (yourself) is definitely more accurate than the companies which have seen demonstrable success from targeted advertising. "Single anomalous data point"? His description is exactly how targeted advertising works for pretty much everybody. He's not some weirdo outlier -- we're all show the same things we've bought and tangential things to our searches with the stupidest ad AI. He might be wrong that "it doesn't work" (e.g. doesn't pay since it's crude), and probably he is, since so many businesses follow it, but he's totally right in that it's crude and far less effective than its potential effectiveness.
- mseebach 11y ago
  The outlier is the kitchen faucet, not the person. It's fact that there exists multiple data-driven targeted advertising firms, and their data shows them that it works. That doesn't mean that every single impression works, it means that a high enough (likely very low) percentage of the impressions work. Now we can debate if it ought to work, if it's ethical etc., but let's get the facts straight, it does work.
  - coldtea 11y ago
    Works is a pretty low bar. Obviously it makes money for some people. Obviously it's better than no targeted advertisment. The parent described how it's broken and works crudely and bad. That it still works and gets some sales, he probably doesn't doubt.
    - mseebach 11y ago
      What other bar were you hoping for? It's advertising. The fact that it works better than other kinds of advertising is a pretty relevant bar. FWIW, since we're doing anecdata, I just checked my Amazon front page. Many things are irrelevant, a few comical (I recently looked at a 80-book box-set of Penguin classics[1], now it's systematically recommending each individual member of that box-set to me :-/ ) -- and a few are quite relevant and I clicked on them to check it out. 1: http://www.amazon.co.uk/Little-Black-Classics-Box-Penguin/dp/0141398876/ http://www.amazon.co.uk/Little-Black-Classics-Box-Penguin/dp...
dgmdoug 11y ago
I'll weigh in on morgante's side here. What WB discusses is a common misconception. Just because it doesn't appear to work for yourself, doesn't mean that targeting is not worthwhile. It's not really designed for an improved user experience, but to provide an advantage to those running the ad campaigns. The crucial thing that people forget, is that that targeting only has to be a little bit better than random to be worth doing (from the ad operations perspective). Given a large number of ads shown every day, with nominal cost, we've only got to push a fraction of those toward users with a slightly better propensity to interact to increase the interaction rate, and get paid more from the advertiser (presuming a model where the advertiser pays us based upon interactions that we generate). One of the reasons that it is profitable is that the amount we might get paid for an interaction could 50p, £1 or even £10 depending upon the client and media. The cost of showing that ad is a few pence per thousand! So, we can get it wrong many many times, and still show a statistically significant improvement in interaction rates and make a huge dent in profitability for ourselves. I discuss all of this in Chapter 5 of Algorithms of the Intelligent Web. 2nd Ed. https://www.manning.com/books/algorithms-of-the-intelligent-web-second-edition https://www.manning.com/books/algorithms-of-the-intelligent-...
- hodwik 11y ago
  Targeted ad talking about targeted ads, so meta.
  - JustSomeNobody 11y ago
    Exactly. I almost fell out of my chair laughing when I read that last line.
  - sanderjd 11y ago
    To complete the circle, dgmdoug should post an analysis of the funnel from HN post to book purchase as proof that targeted ads do work.
    - dgmdoug 11y ago
      I missed a trick it seems. Should have posted a link where I could track conversions. :-/
bad_user 11y ago
I think brand advertising does work. Otherwise you can't explain the survival of Coca-Cola.
- WalterBright 11y ago
  Coca-Cola makes art that is pleasing to the eye and valuable in its own right. For example, I own a classic Coke machine and think it's quite a beauty. This is commonplace with Coca-Cola equipment and marketing stuff. And who doesn't love the little Santa bottles they make for the holidays?
  - eva1984 11y ago
    No, it is still Ad. No ads are appeasing, because they are, by their nature, distractions and freeloaders, no matter how appealing their disguise might be. I am more than happy to skip all coca-cola ads that shown before movies, even they look OK, but I don't need them. But after all, those ads leave an impression on me, that coca-cola is still there, in a red glassy bottle/can, and people seem happy drinking it. That is the reason I might choose it as my go-to soft drinks other than some unknown small brands. So that is advertising works, laziness.
    - aianus 11y ago
      It's not laziness, it's risk-aversion. They're different. I will put in significantly more effort to go to McDonald's instead of some no-name fast food joint because I know for sure what the price will be and what the food will taste like.
      - TeMPOraL 11y ago
        Speaking of McDonald's, I really learned to appreciate them and if anyone starts whining to me again about "americanization of everything" I'll tell them to go spend a month in southern China. As a westerner, unless you're particularly fond of sweet food and sea food, you'll likely quickly appreciate that there is always a McDonald's, KFC and Starbucks nearby. Being able to buy safe food that you know you'll like is godsend when trying to ease into another culture's cousine.
ssivark 11y ago
For a lot of companies, brand advertising seems to be the only thing that works and targeted advertising almost useless. Eg: Companies like Coca-Cola and Pepsi, which get a significant share of their revenues from people who buy the product once or twice a year, rather than "engaged" users who buy lots. The following is a very interesting read: http://www.ft.com/cms/s/2/cd1722ba-8333-11e5-8e80-1574112844fd.html http://www.ft.com/cms/s/2/cd1722ba-8333-11e5-8e80-1574112844...
- reagency 11y ago
  Who buys Coke only twice per year?
  - djhn 11y ago
    People who never drink soda...except that one time at a restaurant on a holiday, where your sanitary considerations make you ask the waiter for a beverage you know, that beverage being coke or pepsi. I will go for the coke, even though I can't taste the difference in a blind test.
fisherjeff 11y ago
I shop at Amazon quite a bit. They have more information about my purchasing and browsing habits than they could reasonably need, plus the same data on millions of others. On top of that, when I visit their website, they know I'm already there to spend money. Amazon's front page should be the absolute pinnacle of targeted advertising. And yet, if I buy a coffee maker, the front page is covered in coffee makers for weeks. I've never bought anything based on what's on the front page and I'm not sure I've ever even clicked those suggestions. I'm sure targeted advertising can work in the long run, but at the moment the success rate seems so low that it's more often an annoyance than a convenience.
- JoeAltmaier 11y ago
  ...and then you see coffeemakers on Facebook for weeks. Its creepy. And as you suggest, ineffective. Whatever 1st-order ad-prediction algorithm they're using is clearly crap. How hard could it be to write something that predicts your next purchase based on a previous one? That could even be helpful.
- ciaranm 11y ago
  How many consumers have this style of interaction: * buy an item from Amazon (coffee maker or otherwise) * realize the build quality/size is rubbish (which from some of the less well known sellers, it really can be) * return the item using Amazon's generous returns policies (never had one rejected, I've used it many times) * buy a different item in the same category. * repeat? If this type of purchase happens a non-negligible number of times, could that be the reason we see so many 'buy more of X!' style ads?
  - vitd 11y ago
    But wouldn't it make sense to only do that if the return actually happens? It's not like Amazon doesn't know whether or not the item has been returned.
  - fineman 11y ago
    I truly hope so, that means Amazon ad-networks' ads are hurting Amazon. Internalizing the externality of spam and privacy violations. Haven't you ever wish for a 'Punch Advertiser' button during commercials? This would be like hearing they built it themselves. (To be clear, by having someone making $0.03/click sign their customer up for buyer's remorse thus destroying the profit from serving them because those return policies, the customer service time, etc, aren't free.)
GCA10 11y ago
You're both right, but OP is more right. Targeted plumbing ads elicit slightly higher click-through rates and purchases. Let's say 0.12% instead of 0.1% clicks. So in the ad community's eyes, the targeting is "effective." But for 99.88% of people seeing those plumbing ads -- including many folks who have already bought their sinks -- such ads are stupid distractions. The net result: there's a big surge in the use of ad blockers, and the swamp is starting to drain. Another case in point: I now follow Twitter trending reports for Yokohama, even though I live 5,000 miles away and can barely read a few characters of hiragana. It's my primitive hack to disable the trending "service." I'd rather have incomprehensible squiggles on a corner of my screen than a bunch of garbage content that's clamoring for attention, even though it's irrelevant to me.
- Balgair 11y ago
  I mean, that effectively is just an adblocker. Many readers here really get bent out of shape on the use of blockers, and you may be one of them, I don't know. But directing the ads to you from a language you can't even read might as well be an adblocker as your mind can't even absorb the ad by osmosis. Just use uBlock Origin.

jacquesm 11y ago

Does two datapoints help? As far as the success is concerned, the advertising company is hopping from one aggressive technology to another mostly because their techniques work but only for a while and then users tune out. So it may be that WB has a point that is rather stronger than you make it out to be.

morgante 11y ago
> Does two datapoints help? If we're comparing anecdotes, I'll offer the 3 companies I've helped build online advertising campaigns for which had a positive ROI. > hopping from one aggressive technology to another I'd agree with that if the argument was that "this specific ad technology" is going to fail. I totally agree that ex. clickbait headlines are a temporary boom which will disappear soon. But to argue that advertising as an industry is in a bubble, we'd need evidence that the industry is bigger than historically or what it can support. Which there just isn't evidence of (take a look at my other post).
- jacquesm 11y ago
  Online ads are here to stay, there is no doubt - in my mind at least - about that. That said, the industry is in trouble, there seems to be a disconnect between the users and the products advertised hitherto unseen and many in the advertising industry are acutely aware of this. Nobody has found a silver bullet on how to fix this and it is only a matter of time before there will be some reaction to this ever decreasing engagement. Making an ad campaign that has a positive ROI is doable, but if you are that well embedded in the industry then you will quite likely agree with me that it has become quite a bit harder to achieve that today than it was in the past. The solution (performance based advertising) shifts the burden of the effectiveness of a campaign onto the wrong party (the owner of the inventory) which has resulted in a series of start-ups that optimize on behalf of inventory owner. This is all like watching eb-and-flood erode a beach and just like real life erosion there are turning points at which the situation can go from steady state to dynamic quite rapidly and it is anybody's guess what the new steady configuration will be once all the potential for movement has been exhausted. The ad industry is imo not exactly in a bubble as much as that they are more than a little bit worried about why the usual bag of tricks no longer works and how they plan on going back to when conversion rates were still something to be proud of. I don't doubt that this will initially be tackled with a wave of even more invasive advertising, or advertising masquerading as content. The problem is that what was initially an absolute boon for the advertising industry, that you can 'measure' engagement ended up being the exact problem, you can measure engagement, including a steady drop in engagement over time. And so, by making advertising more and more aggressive the industry has made it impossible - or nearly so - to make a non-aggressive campaign because it has to compete with all the aggressive ones for attention (from the users perspective it is a zero sum game, they only have 24 hours in a day and usually something else to do besides watching and engaging with ads, and if they don't then they are not exactly prime material for some demographic to begin with). So now there is a problem, which is that the ad industry can't suddenly stop reporting all these engagement metrics, nor can they pull more technological rabbits out of the hat that spawned all these new tricks because these too will work for a while and then run out. It's not a simple problem.
  - ThomPete 11y ago
    Nothing in marketing is ever going to be a silver bullet. The seconds something is shown as a slight improvement everyone is going to use that as their new strategy until it looses it's effect. The thing to remember about advertising is that at the end of the day it's really about finding ways to be different than it is about anything else. And so when everyone is doing TV ads, start doing online ads, when everyone is doing online ads, start making centent marketing, when everyone is doing content marketing use email and so on. It's an ever moving target. Thats why it's effective when it works.
  - AJ007 11y ago
    I've been running ad campaigns for about 10 years. The market seems to have done a fairly good job of balancing out inventory costs. If a publishers hammers their audience with ads they lose them. In the short term, people throw up their hands, but eventually those users move to greener pastures. There is a damn good reason the most dominant parties in advertising - Google and Facebook - have the tiniest, and most targeted, ads. There has yet to be a point at any time in the past decade where I said, this doesn't work, and shut all of the ad campaigns off. There definitely are issues that exist. There is a problem with mobile app ad quality. There definitely are bot traffic problems. The ad exchanges will be pretty brutal on inexperienced advertisers, but this was the case pre-exchange too. One "bubble" point is I suspect many of the adtech companies involved in exchange inventory may fine themselves on the line for the bot traffic. It will be enough to wipe out the investor equity. This follows based on class actions Google, Yahoo, and others have had to settle in the past and Google especially has always been aggressive about this stuff (although less so in the past two years.) I read the original blog post and the writer doesn't seem to make a very good case outside of things that happen in normal capitalism. Lots of middle men, tools, and supply chains attempting to add value along with investors dumping in a ton of money in an attempt to gain some return -- possibly more than they will ever get back out. Sounds like a healthy marketplace to me. Some ideas are terrible, some are good, some are amazing but will never return their investment. That is ok. The bigger problem is for small publishers and likely medium sized ones too. Ad inventory and the users online has ballooned many times over over the past decade. It also is a problem for traditional media companies like radio stations, newspapers, and television channels. I don't need to extrapolate on that one. Advertisers need to be sophisticated. They had to in the past too but few had access to tools that told them they sucked. I'm not sure that is any more extraordinary than asking a commodity traders purchasing cocoa beans to know what they are looking at and know how to be sure that is really what shows up at port.
amelius 11y ago
Another datapoint here.
arrrg 11y ago
Eh … targeted advertising certainly worked on me. Pretty definitely and pretty much guaranteed better than non-targeted ads. My purchasing decisions tend to be pretty long and drawn out (it will take me months to decide that I want, for example, a camera and then to decide which one I want), but targeted ads have several times caused me to pick up the slack and continue my line of investigation into what to buy. Their aggressiveness is an asset – and they also don’t really annoy me. Comical, sure, but they also remind me: Ah, I wanted to check out those cameras. Obviously it’s a blunt instrument and not a scalpel (we know for to little about how human brains work to make that work – we need the blunt approach), but it’s a different blunt instrument compared to other advertising.
- jacquesm 11y ago
  Oh, they work alright, on a statistical basis. They work better than non-targeted advertising, that's all it takes. After all, you're definitely not the only person who can be influenced this way.

Arnt 11y ago

There was a story on HN the other day about someone who had definitely had success with targeted advertising. A company called Grasshopper, I think. It wasn't the first one. The problem is that although these stories exist, they're so rare. Drops in the ocean. All they say is that highly targeted advertising definitely works for a small part of one per cent of the advertisers. (Which isn't to say that it doesn't work for more. Maybe it does, I wouldn't know.)

morgante 11y ago
Probably the reason you don't see more stories about the effectiveness of advertising is because: (a) On HN, it doesn't match the ideological overtones so it won't be voted up. (b) In general, it's not interesting. Most business owners already know that advertising works and aren't terribly interested in hearing the obvious.
- Arnt 11y ago
  There is a filter on HN, but that doesn't sat much about the unfiltered reality. Another commenter, who seems to know, says combining various targeting techniques typically gives 20-100% improvement over untargeted advertising. I'll trust his numbers. But is 20-100% enough to say "targeting works"?
  - jacquesm 11y ago
    The question then becomes is that 20-100% improvement over untargeted advertising as observed from the advertisers (not the agency or some tech layer in between) point of view also an improvement when compared with the same situation say 5 or 10 years ago. And if it isn't then there still is a problem (but a smaller one, that may or may not be repaired in time). And yes, targeting works. But non-animated banner ads also used to work, and they worked even better than quite a few targeted campaigns do today (hence the shift to performance based advertising rather than CPM and CPC campaigns, they are also much more resilient against fraud but much harder to properly set up).
    - 11y ago

coldtea 11y ago

>Yes, your intuition derived from a single anomalous data point (yourself) is definitely more accurate than the companies which have seen demonstrable success from targeted advertising. "Single anomalous data point"? His description is exactly how targeted advertising works for pretty much everybody. He's not some weirdo outlier -- we're all show the same things we've bought and tangential things to our searches with the stupidest ad AI. He might be wrong that "it doesn't work" (e.g. doesn't pay since it's crude), and probably he is, since so many businesses follow it, but he's totally right in that it's crude and far less effective than its potential effectiveness.

mseebach 11y ago
The outlier is the kitchen faucet, not the person. It's fact that there exists multiple data-driven targeted advertising firms, and their data shows them that it works. That doesn't mean that every single impression works, it means that a high enough (likely very low) percentage of the impressions work. Now we can debate if it ought to work, if it's ethical etc., but let's get the facts straight, it does work.
- coldtea 11y ago
  Works is a pretty low bar. Obviously it makes money for some people. Obviously it's better than no targeted advertisment. The parent described how it's broken and works crudely and bad. That it still works and gets some sales, he probably doesn't doubt.
  - mseebach 11y ago
    What other bar were you hoping for? It's advertising. The fact that it works better than other kinds of advertising is a pretty relevant bar. FWIW, since we're doing anecdata, I just checked my Amazon front page. Many things are irrelevant, a few comical (I recently looked at a 80-book box-set of Penguin classics[1], now it's systematically recommending each individual member of that box-set to me :-/ ) -- and a few are quite relevant and I clicked on them to check it out. 1: http://www.amazon.co.uk/Little-Black-Classics-Box-Penguin/dp/0141398876/ http://www.amazon.co.uk/Little-Black-Classics-Box-Penguin/dp...

dgmdoug 11y ago

I'll weigh in on morgante's side here. What WB discusses is a common misconception. Just because it doesn't appear to work for yourself, doesn't mean that targeting is not worthwhile. It's not really designed for an improved user experience, but to provide an advantage to those running the ad campaigns. The crucial thing that people forget, is that that targeting only has to be a little bit better than random to be worth doing (from the ad operations perspective). Given a large number of ads shown every day, with nominal cost, we've only got to push a fraction of those toward users with a slightly better propensity to interact to increase the interaction rate, and get paid more from the advertiser (presuming a model where the advertiser pays us based upon interactions that we generate). One of the reasons that it is profitable is that the amount we might get paid for an interaction could 50p, £1 or even £10 depending upon the client and media. The cost of showing that ad is a few pence per thousand! So, we can get it wrong many many times, and still show a statistically significant improvement in interaction rates and make a huge dent in profitability for ourselves. I discuss all of this in Chapter 5 of Algorithms of the Intelligent Web. 2nd Ed. https://www.manning.com/books/algorithms-of-the-intelligent-web-second-edition https://www.manning.com/books/algorithms-of-the-intelligent-...

hodwik 11y ago
Targeted ad talking about targeted ads, so meta.
- JustSomeNobody 11y ago
  Exactly. I almost fell out of my chair laughing when I read that last line.
- sanderjd 11y ago
  To complete the circle, dgmdoug should post an analysis of the funnel from HN post to book purchase as proof that targeted ads do work.
  - dgmdoug 11y ago
    I missed a trick it seems. Should have posted a link where I could track conversions. :-/

bad_user 11y ago

I think brand advertising does work. Otherwise you can't explain the survival of Coca-Cola.

WalterBright 11y ago
Coca-Cola makes art that is pleasing to the eye and valuable in its own right. For example, I own a classic Coke machine and think it's quite a beauty. This is commonplace with Coca-Cola equipment and marketing stuff. And who doesn't love the little Santa bottles they make for the holidays?
- eva1984 11y ago
  No, it is still Ad. No ads are appeasing, because they are, by their nature, distractions and freeloaders, no matter how appealing their disguise might be. I am more than happy to skip all coca-cola ads that shown before movies, even they look OK, but I don't need them. But after all, those ads leave an impression on me, that coca-cola is still there, in a red glassy bottle/can, and people seem happy drinking it. That is the reason I might choose it as my go-to soft drinks other than some unknown small brands. So that is advertising works, laziness.
  - aianus 11y ago
    It's not laziness, it's risk-aversion. They're different. I will put in significantly more effort to go to McDonald's instead of some no-name fast food joint because I know for sure what the price will be and what the food will taste like.
    - TeMPOraL 11y ago
      Speaking of McDonald's, I really learned to appreciate them and if anyone starts whining to me again about "americanization of everything" I'll tell them to go spend a month in southern China. As a westerner, unless you're particularly fond of sweet food and sea food, you'll likely quickly appreciate that there is always a McDonald's, KFC and Starbucks nearby. Being able to buy safe food that you know you'll like is godsend when trying to ease into another culture's cousine.

ssivark 11y ago

For a lot of companies, brand advertising seems to be the only thing that works and targeted advertising almost useless. Eg: Companies like Coca-Cola and Pepsi, which get a significant share of their revenues from people who buy the product once or twice a year, rather than "engaged" users who buy lots. The following is a very interesting read: http://www.ft.com/cms/s/2/cd1722ba-8333-11e5-8e80-1574112844fd.html http://www.ft.com/cms/s/2/cd1722ba-8333-11e5-8e80-1574112844...

reagency 11y ago
Who buys Coke only twice per year?
- djhn 11y ago
  People who never drink soda...except that one time at a restaurant on a holiday, where your sanitary considerations make you ask the waiter for a beverage you know, that beverage being coke or pepsi. I will go for the coke, even though I can't taste the difference in a blind test.

fisherjeff 11y ago

I shop at Amazon quite a bit. They have more information about my purchasing and browsing habits than they could reasonably need, plus the same data on millions of others. On top of that, when I visit their website, they know I'm already there to spend money. Amazon's front page should be the absolute pinnacle of targeted advertising. And yet, if I buy a coffee maker, the front page is covered in coffee makers for weeks. I've never bought anything based on what's on the front page and I'm not sure I've ever even clicked those suggestions. I'm sure targeted advertising can work in the long run, but at the moment the success rate seems so low that it's more often an annoyance than a convenience.

JoeAltmaier 11y ago
...and then you see coffeemakers on Facebook for weeks. Its creepy. And as you suggest, ineffective. Whatever 1st-order ad-prediction algorithm they're using is clearly crap. How hard could it be to write something that predicts your next purchase based on a previous one? That could even be helpful.
ciaranm 11y ago
How many consumers have this style of interaction: * buy an item from Amazon (coffee maker or otherwise) * realize the build quality/size is rubbish (which from some of the less well known sellers, it really can be) * return the item using Amazon's generous returns policies (never had one rejected, I've used it many times) * buy a different item in the same category. * repeat? If this type of purchase happens a non-negligible number of times, could that be the reason we see so many 'buy more of X!' style ads?
- vitd 11y ago
  But wouldn't it make sense to only do that if the return actually happens? It's not like Amazon doesn't know whether or not the item has been returned.
- fineman 11y ago
  I truly hope so, that means Amazon ad-networks' ads are hurting Amazon. Internalizing the externality of spam and privacy violations. Haven't you ever wish for a 'Punch Advertiser' button during commercials? This would be like hearing they built it themselves. (To be clear, by having someone making $0.03/click sign their customer up for buyer's remorse thus destroying the profit from serving them because those return policies, the customer service time, etc, aren't free.)

GCA10 11y ago

You're both right, but OP is more right. Targeted plumbing ads elicit slightly higher click-through rates and purchases. Let's say 0.12% instead of 0.1% clicks. So in the ad community's eyes, the targeting is "effective." But for 99.88% of people seeing those plumbing ads -- including many folks who have already bought their sinks -- such ads are stupid distractions. The net result: there's a big surge in the use of ad blockers, and the swamp is starting to drain. Another case in point: I now follow Twitter trending reports for Yokohama, even though I live 5,000 miles away and can barely read a few characters of hiragana. It's my primitive hack to disable the trending "service." I'd rather have incomprehensible squiggles on a corner of my screen than a bunch of garbage content that's clamoring for attention, even though it's irrelevant to me.

Balgair 11y ago
I mean, that effectively is just an adblocker. Many readers here really get bent out of shape on the use of blockers, and you may be one of them, I don't know. But directing the ads to you from a language you can't even read might as well be an adblocker as your mind can't even absorb the ad by osmosis. Just use uBlock Origin.