The Benefits of Targeted Advertising

Politics 2.0 February 05, 2008

I don't mind targeted advertising. I mind being shown ads that I don't care about - and that's the way it's been for years. The fact that the Internet has become more social, allowing us to specify personal information about ourselves for public display and algorithmic analysis means that sometime in the future we can expect that during our time online, we will only be shown ads relevant to our lives.

The only way we've been able to use free applications online is through advertising and the concept of "let someone else pay for me in hopes that I'll buy something from them." Well, the likelihood is that I probably won't buy something from whoever's paying from me. In fact, I almost never find myself clicking on the various advertisements I see. Why? I'm not interested. They're not targeted enough.

But let's face it, we buy stuff. So what factors go into the decision of what to purchase? Obviously we have word of mouth from friends who recommend products to us. Additionally we use our previous purchases as a baseline to rate future ones. Thirdly we generally can recognize a need for something in our lives and then start the search to fill the void. For example, when I decided I wanted new speakers for my projection system, I started browsing around online, starting from a Google search and progressing from site to site.

I like clothes shopping - but only from particular stores. Show me advertisements of new shipments from these stores and I'm definitely likely to click the ad to learn more. Show me advertisements on new Apple products and I'll probably click as well. But how would you extract this information from my personal profile without me explicitly saying what kinds of advertisements I want to see? Sometimes I don't even know - something random will be recommended and it turns out to be a great product that I buy. It doesn't happen often, but that's the point - being able to analyze my purchase history and my personal profile to figure out what kinds of products I'm likely to buy next.

I'm all for people recommending things to buy, but it only makes sense and is valuable if it's relevant to my life. I know there are plenty of companies out there trying to create this kind of algorithm right now and I look forward to seeing what gets created. Until then, no, I do not want to save 15% or more by switching car insurance companies.

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