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I've long assumed that the benefits of mega-targeting are overstated: we've all seen the ultra-targeted ads for say, TVs right after we bought a TV. Unobtrusive

I've long assumed that the benefits of mega-targeting are overstated: we've all seen the ultra-targeted ads for say, TVs right after we bought a TV. Unobtrusive targeting based on the content of where the ad appears feels like it should capture much of the value without all the data collection. Maybe I'm wrong and the targeting really does work that well that it should displace practically all other forms of advertising, but it just feels like a situation where it's to nobody's benefit within the ad buying/selling system to really take a hard look at whether this is worth it.

danaris 5y ago
I don't have a link right now, but I recall seeing at least one study within the past few months that showed just that: that despite the increased intrusiveness of data collection and ad tracking and targeting, conversion rates have not increased appreciably over simple context-based ad placements like we had a decade or so ago.
- ipaddr 5y ago
  Those are two different datapoints. The assumption being if they went back to context ads we would have rates similiar to 2005. The consumer has changed and is smarter than the group of who joined aol and discovered the internet. Clickthrough rates have been falling since so it doesn't compare well. People will pay more to target fewer because it costs them less to get sales.
  - danaris 5y ago
    How much have clickthrough rates been falling because people know advertisers are maliciously trying to siphon their data and ruin their browsing experience for a few more cents?
legitster 5y ago
Some of it is really effective! Being able to push an ad on LinkedIn to, like, only HR people at Fortune 500 companies is absolute gold. And saves a lot of people from looking at poorly targeted garbage messages. The problem is that the markets are so danged efficient. Because everyone can so efficiently target the right people, you get exactly what you pay for. So you can blow a lot of money to find out that your message isn't right. Ironically, the amount of targeting data available makes it harder to justify A/B testing just because of the cost involved anymore.
- mdoms 5y ago
  I'm sure it feels good to highly target your ads, but I'm more interested in actual data.
JJMcJ 5y ago
> right after I really don't understand the point of that. It's not like breakfast cereal. I'm not going to buy another TV because I just bought one.
- Traster 5y ago
  The ad network tracks what you've been looking at but obviously can't actually access your purchases. So all the ad network knows is you've shown intent to buy a tv, not that you've bought a tv.
  - mi100hael 5y ago
    In this case, the ad network would presumably not know or else they wouldn't keep showing you ads. But it's worth noting that ad networks are more interconnected than most people realize. You can go to Facebook and see the "off-Facebook activity" they have received about you from partners, many of which are retailers. I imagine purchase-history is part of what's shared if you make purchases with those retailers using a email/phone number that's also associated with your Facebook account. https://www.facebook.com/off_facebook_activity https://www.facebook.com/off_facebook_activity
- nickff 5y ago
  There are a few reasons why this re-targeting makes sense. First, I would bet that multiple stores 'know' you searched for a television, while only one 'knows' you purchased one. The stores that don't know you already made a purchase will keep advertising in the hopes that you choose them, and the one you bought from may not have implemented a feature to 'de-target' you, because their conversion rate is low enough that it doesn't cost them much to keep targeting you. Also, you may return the first one in favor of another, 'better' model; or you may be purchasing for other people or business use.
gowld 5y ago
You're conflating true positives with false positives. A conversion outweighs a lot of non-conversions.
asdff 5y ago
I think the issue is that we've actually moved away from targeted ads somehow. These ads aren't targeted ads, they are a best guess what you might want to buy. A targeted ad to me is something like an ad for some niche interest piece of gear on a website or magazine for that specific niche interest. 100% of your ad dollars in this case go to throwing an ad in front of what is guarenteed to be your customer base. When pampers tries to sell me diapers because I am of that age where people tend to have kids, that falls flat because they only guess that I am their customer base, rather than targeting that base explicitly like banner advertisement on a new parents forum.
- zerocrates 5y ago
  Yeah I mean this is the thing. The ad market is dominated by the players who have a bunch of info about users/visitors and do user-specific targeting with that data. My understanding is that the payment rates for "targeted" ads in the sense of "place them on this site/article because it's a relevant topic" have plummeted. Further, the extreme trackability of actual ad engagement I think has devalued the sense of value in just "your ad in front of eyeballs": I don't know that an ad you don't click on but that causes you to buy through other channels later really gets valued (though with the amount of tracking that happens maybe people are actually capturing this too). The other thing that doesn't necessarily get tracked would be "your ad is so annoying/invasive/battery-draining/spookily-targeted that it actually turns people off from buying": they're just non-converted impressions same as any other. (There's also clearly a large component of "very few people really get turned off by ads, if they noticed you even out of annoyance that's good on balance" which might be true, I don't know.) We'd have seen a shift in ad dollars regardless just owing to how much time people spend online and on mobile devices especially, but how much of the shift is driven just by the availability of the metrics? Again, the metrics are one of these things that's good for both theoretically-opposing "sides" of the ad market: the ad networks can obviously pitch them to marketing, and marketing can in turn use them to justify the ad budget.

danaris 5y ago

I don't have a link right now, but I recall seeing at least one study within the past few months that showed just that: that despite the increased intrusiveness of data collection and ad tracking and targeting, conversion rates have not increased appreciably over simple context-based ad placements like we had a decade or so ago.

ipaddr 5y ago
Those are two different datapoints. The assumption being if they went back to context ads we would have rates similiar to 2005. The consumer has changed and is smarter than the group of who joined aol and discovered the internet. Clickthrough rates have been falling since so it doesn't compare well. People will pay more to target fewer because it costs them less to get sales.
- danaris 5y ago
  How much have clickthrough rates been falling because people know advertisers are maliciously trying to siphon their data and ruin their browsing experience for a few more cents?

legitster 5y ago

Some of it is really effective! Being able to push an ad on LinkedIn to, like, only HR people at Fortune 500 companies is absolute gold. And saves a lot of people from looking at poorly targeted garbage messages. The problem is that the markets are so danged efficient. Because everyone can so efficiently target the right people, you get exactly what you pay for. So you can blow a lot of money to find out that your message isn't right. Ironically, the amount of targeting data available makes it harder to justify A/B testing just because of the cost involved anymore.

mdoms 5y ago
I'm sure it feels good to highly target your ads, but I'm more interested in actual data.

JJMcJ 5y ago

> right after I really don't understand the point of that. It's not like breakfast cereal. I'm not going to buy another TV because I just bought one.

Traster 5y ago
The ad network tracks what you've been looking at but obviously can't actually access your purchases. So all the ad network knows is you've shown intent to buy a tv, not that you've bought a tv.
- mi100hael 5y ago
  In this case, the ad network would presumably not know or else they wouldn't keep showing you ads. But it's worth noting that ad networks are more interconnected than most people realize. You can go to Facebook and see the "off-Facebook activity" they have received about you from partners, many of which are retailers. I imagine purchase-history is part of what's shared if you make purchases with those retailers using a email/phone number that's also associated with your Facebook account. https://www.facebook.com/off_facebook_activity https://www.facebook.com/off_facebook_activity
nickff 5y ago
There are a few reasons why this re-targeting makes sense. First, I would bet that multiple stores 'know' you searched for a television, while only one 'knows' you purchased one. The stores that don't know you already made a purchase will keep advertising in the hopes that you choose them, and the one you bought from may not have implemented a feature to 'de-target' you, because their conversion rate is low enough that it doesn't cost them much to keep targeting you. Also, you may return the first one in favor of another, 'better' model; or you may be purchasing for other people or business use.

gowld 5y ago

You're conflating true positives with false positives. A conversion outweighs a lot of non-conversions.

asdff 5y ago

I think the issue is that we've actually moved away from targeted ads somehow. These ads aren't targeted ads, they are a best guess what you might want to buy. A targeted ad to me is something like an ad for some niche interest piece of gear on a website or magazine for that specific niche interest. 100% of your ad dollars in this case go to throwing an ad in front of what is guarenteed to be your customer base. When pampers tries to sell me diapers because I am of that age where people tend to have kids, that falls flat because they only guess that I am their customer base, rather than targeting that base explicitly like banner advertisement on a new parents forum.

zerocrates 5y ago
Yeah I mean this is the thing. The ad market is dominated by the players who have a bunch of info about users/visitors and do user-specific targeting with that data. My understanding is that the payment rates for "targeted" ads in the sense of "place them on this site/article because it's a relevant topic" have plummeted. Further, the extreme trackability of actual ad engagement I think has devalued the sense of value in just "your ad in front of eyeballs": I don't know that an ad you don't click on but that causes you to buy through other channels later really gets valued (though with the amount of tracking that happens maybe people are actually capturing this too). The other thing that doesn't necessarily get tracked would be "your ad is so annoying/invasive/battery-draining/spookily-targeted that it actually turns people off from buying": they're just non-converted impressions same as any other. (There's also clearly a large component of "very few people really get turned off by ads, if they noticed you even out of annoyance that's good on balance" which might be true, I don't know.) We'd have seen a shift in ad dollars regardless just owing to how much time people spend online and on mobile devices especially, but how much of the shift is driven just by the availability of the metrics? Again, the metrics are one of these things that's good for both theoretically-opposing "sides" of the ad market: the ad networks can obviously pitch them to marketing, and marketing can in turn use them to justify the ad budget.