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The point of ad targeting isn't to generate relevant ads. It's so the advertising platform can put you in a more expensive targeting cohort, increasing the reve
by ThrustVectoring 8y ago
The point of ad targeting isn't to generate relevant ads. It's so the advertising platform can put you in a more expensive targeting cohort, increasing the revenue from serving the ad. The "optimal" bid for serving you an ad to your cohort is proportional to the product of expected relevance and the revenue per conversion.
If a programming placement firm makes $100 per lead (after various filter steps) on your targeting info, and a witty t-shirt makes $10, your cohort has to convert ten times as often on t-shirts to match the recruiting firm's ad bids.
- zozbot123 8y agoThis seems fallacious. The whole reason for that "more expensive targeting cohort" becoming available after tracking is its increased relevance. Otherwise, everyone would be getting the $100 ad in the first place-- the $10 ad would simply be uncompetitive!
- ThrustVectoring 8y agoI'm not saying relevance is meaningless. I'm saying it's scaled by the profitability of a conversion as well. This business logic works on traditional non-targeted ads as well, like on broadcast TV. For example, do you remember seeing ads along the lines of "if you or a loved one has been diagnosed with mesothelioma, call the law offices of such and so"? Mesothelioma affects less than 30 people per million. Why run an ad that so few people care about? Because the payoff is so high for reaching the people that do care, and the higher the payoff, the less people have to care for the ad campaign to be worthwhile.