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> The fact that their "post-sales targeting" can overwhelm other advertisers who are just doing "market expansion" targeting doesn't tell you much at all It sh

> The fact that their "post-sales targeting" can overwhelm other advertisers who are just doing "market expansion" targeting doesn't tell you much at all It shows me that the simplistic method of "advertise to people who have already bought our product" performs vastly better than any of the other sophisticated targeting that advertisers like to tout. To clarify -- I'm not talking about the proportion of an individual company's budget -- I'm talking about the proportion of the overall market for that product. Every time that someone is shown an ad, that ad is the result of a bidding war. If a large proportion of those ads are retargeted that means the market has decided that the vast majority of advertisers are less confident about their targeting systems then they are about a simplistic, vaguely annoying heuristic. We can make an assumption about the market as a whole because we believe that the market is at least somewhat efficient. If advanced, targeted advertising that used tons of demographic data and personal information was competitive with these naive targeting techniques, then a higher proportion of those ads would outbid retargeted ads on any given page. > doesn't tell you much at all I also want to broaden out a little bit here. In the OP's article, the main complaint being made is not that advertising has zero ROI (although the author is critical of the effectiveness as well). The criticism is that the ads provide no benefit to the user, that they're annoying and reductionist, and that they fail to live up to the promises of companies like Facebook that claim targeted ads connect people to new products that they'll love. Independent of whether or not we can be critical of the effectiveness of ads for companies, the proportion of retargeted ads also tells us that advertisers broadly, as a market, are incapable of delivering on their promises to consumers and are incapable of building a system that is mutually beneficial to both companies and consumers. See also some of the authors criticism of recommendation algorithms, which fall into the same boat. Who cares if Netflix's recommendation algorithm increases clicks? Consumers don't sign up for Netflix out of charity, they want a system that serves their interests, not just the company's. For advertisers to try and make the case that access to private data is good for consumers, they need to have something to show that's better than this.

tshaddox 5y ago
> It shows me that the simplistic method of "advertise to people who have already bought our product" performs vastly better than any of the other sophisticated targeting that advertisers like to tout. Well, yes, it performs better, but only to people who have already bought the product. It's not surprising that this would perform better than whatever sophisticated ML-based targeting system they use over the general population. > If a large proportion of those ads are retargeted that means the market has decided that the vast majority of advertisers are less confident about their targeting systems then they are about a simplistic, vaguely annoying heuristic. Again, this isn't surprising, and I don't think it leads to the conclusion you're making. I think you're getting tripped up because you're not considering the denominator here. There's nothing odd about the fact that a single ad impression shown to a recent purchaser of your product would perform better than a single ad impression shown to someone who has never heard of your product (but perhaps is targeted using something more sophisticated based on their Internet traffic). It's also not odd that the ad publisher would pay a lot more for the former impression than the latter impression (and thus recent purchasers would see a lot of the former type). What's important to note is that the ad publisher is most likely showing orders of magnitude more impressions of the latter type than of the former.
- danShumway 5y ago
  > It's not surprising I'm not sure we're disagreeing? It's not surprising, but it does show that the sophisticated ML-based targeting system is less effective then promised. That doesn't really need to be a shocking conclusion, but it does generally support what the author says in the linked article. We seem to be agreeing on that point, it's not surprising that retargets outperform any sophisticated model, and the only reason it's worth bringing up is that all of this data collection has been sold to consumers based on the idea that it was going to be a wildly effective revolution in how products got sold, and that pervasive data collection was the only way that revolution could work. I still want to loop back around to the idea that advertising is itself sold to consumers as a social benefit. A non-surprising outcome that shows lots of people terribly targeted ads but manages to increase ROI is still not delivering on that consumer promise, and it's not clear why consumers should be willing to give up their private data to support that kind of a system. > What's important to note is that the ad publisher is most likely showing orders of magnitude more impressions of the latter type than of the former. For each individual publisher, sure, I guess... but again, I'm talking about the market overall. If the majority of ads that most people are seeing are retargets, then that says something about the market. The denominator is all of the ads being seen across the entire market, not the ads that each individual company is showing. I'm having a really hard time following your math. I actually got curious enough about this that I threw together a couple of programmed simulations, and maybe I'm modeling the system wrong, but I can't get the math the work out in your favor for any of them. If the average company is only sending out 10% retargets, then across the entire market the average consumer should only see 10% retargets. There could be a lot of variance, but it can't be a common experience -- it has to eventually even out when you look at the market overall. In other words, if there are actually orders of magnitude more ads going out to new users who are unfamiliar with the products being advertised, then some users should be getting all of these ads for new products. So if everyone in the room notices retargets to this degree (and in my experience this is an extremely common sentiment among people when you talk to them about ads) -- then where are the orders of magnitude of other impressions going? Who is seeing them? Those ads can't be going into the void, there should be some people jumping into these conversations saying "I rarely get retargets, most of my ads are for new things." Unless you want to try and make the point that it's all just a Baader–Meinhof phenomenon and we don't have a lot of retargeted ads in the first place. But I think that's a very different argument than "keep the denominator in mind." On the note of Baader-Meinhof phenomenons, I do want to again keep referring back to a consumer point-of-view in this conversation, because the article is specifically about the consumer experience and whether these ad targeting systems have any benefit for consumers. It's worth noting that a system where consumers only see 10% of their ads as constant retargets for things they already have bought might still be too repetitive for them. I think it's hard to get away from the fact that complaining about retargets is extremely common, so independent of everything else, we know the system is targeting those people too much simply because they notice it and dislike it. It may increase ROI for the company, but (again) the question is why consumers should consent to give up their privacy for systems that seem to be annoying them. ROI is not a good enough reason for me to give up my privacy, this isn't a charity. And you don't need >50% retargets to hit that threshold of annoyance where the system can be judged bad, it just needs to be a big enough percentage that consumers notice it and get irritated about it.

tshaddox 5y ago

> It shows me that the simplistic method of "advertise to people who have already bought our product" performs vastly better than any of the other sophisticated targeting that advertisers like to tout. Well, yes, it performs better, but only to people who have already bought the product. It's not surprising that this would perform better than whatever sophisticated ML-based targeting system they use over the general population. > If a large proportion of those ads are retargeted that means the market has decided that the vast majority of advertisers are less confident about their targeting systems then they are about a simplistic, vaguely annoying heuristic. Again, this isn't surprising, and I don't think it leads to the conclusion you're making. I think you're getting tripped up because you're not considering the denominator here. There's nothing odd about the fact that a single ad impression shown to a recent purchaser of your product would perform better than a single ad impression shown to someone who has never heard of your product (but perhaps is targeted using something more sophisticated based on their Internet traffic). It's also not odd that the ad publisher would pay a lot more for the former impression than the latter impression (and thus recent purchasers would see a lot of the former type). What's important to note is that the ad publisher is most likely showing orders of magnitude more impressions of the latter type than of the former.

danShumway 5y ago
> It's not surprising I'm not sure we're disagreeing? It's not surprising, but it does show that the sophisticated ML-based targeting system is less effective then promised. That doesn't really need to be a shocking conclusion, but it does generally support what the author says in the linked article. We seem to be agreeing on that point, it's not surprising that retargets outperform any sophisticated model, and the only reason it's worth bringing up is that all of this data collection has been sold to consumers based on the idea that it was going to be a wildly effective revolution in how products got sold, and that pervasive data collection was the only way that revolution could work. I still want to loop back around to the idea that advertising is itself sold to consumers as a social benefit. A non-surprising outcome that shows lots of people terribly targeted ads but manages to increase ROI is still not delivering on that consumer promise, and it's not clear why consumers should be willing to give up their private data to support that kind of a system. > What's important to note is that the ad publisher is most likely showing orders of magnitude more impressions of the latter type than of the former. For each individual publisher, sure, I guess... but again, I'm talking about the market overall. If the majority of ads that most people are seeing are retargets, then that says something about the market. The denominator is all of the ads being seen across the entire market, not the ads that each individual company is showing. I'm having a really hard time following your math. I actually got curious enough about this that I threw together a couple of programmed simulations, and maybe I'm modeling the system wrong, but I can't get the math the work out in your favor for any of them. If the average company is only sending out 10% retargets, then across the entire market the average consumer should only see 10% retargets. There could be a lot of variance, but it can't be a common experience -- it has to eventually even out when you look at the market overall. In other words, if there are actually orders of magnitude more ads going out to new users who are unfamiliar with the products being advertised, then some users should be getting all of these ads for new products. So if everyone in the room notices retargets to this degree (and in my experience this is an extremely common sentiment among people when you talk to them about ads) -- then where are the orders of magnitude of other impressions going? Who is seeing them? Those ads can't be going into the void, there should be some people jumping into these conversations saying "I rarely get retargets, most of my ads are for new things." Unless you want to try and make the point that it's all just a Baader–Meinhof phenomenon and we don't have a lot of retargeted ads in the first place. But I think that's a very different argument than "keep the denominator in mind." On the note of Baader-Meinhof phenomenons, I do want to again keep referring back to a consumer point-of-view in this conversation, because the article is specifically about the consumer experience and whether these ad targeting systems have any benefit for consumers. It's worth noting that a system where consumers only see 10% of their ads as constant retargets for things they already have bought might still be too repetitive for them. I think it's hard to get away from the fact that complaining about retargets is extremely common, so independent of everything else, we know the system is targeting those people too much simply because they notice it and dislike it. It may increase ROI for the company, but (again) the question is why consumers should consent to give up their privacy for systems that seem to be annoying them. ROI is not a good enough reason for me to give up my privacy, this isn't a charity. And you don't need >50% retargets to hit that threshold of annoyance where the system can be judged bad, it just needs to be a big enough percentage that consumers notice it and get irritated about it.