Friday, September 30, 2011

What the Online Ad Business Could Learn from Netflix, Amazon and Pandora

Remember 2008? It was the year of the ad network and with it came the arrival of targeted banners. Lots of them. Suddenly, it seemed not a single media plan failed to include behavioral, demographic and contextually targeted banners.  

Marketers welcomed this new targeting, but what about consumers? Online banners stalked them around the internet like desperate salesmen. Sure, these banners made a sale or two, but what were consumers getting out of this targeting? It's a reasonable question to ask, after all, it was their own data being used.  

Banner Blindness
The answer is nothing. Banners that used consumer data didn't benefit the consumer at all.  As a result, the industry inadvertently conditioned people to ignore banners, perpetuating the banner blindness phenomenon. Yet at the same time, other industries proved they could apply what they knew about consumers to create awesome services. Netflix, Pandora, Amazon – companies that people love and trust - observe all of their users' actions and sculpt their service based upon them. This relationship is mutually beneficial:  users continuously offer personal data in exchange for improved experience and as a result become loyal customers.

This type of mutually beneficial arrangement could be applied to display advertising.    

As long as consumer data is used to deliver value, consumers are willing to play ball or in display advertising parlance, “engage”.  The problem for banner ads, like those listed in my last post, was that they offered no value and worse, seemed to be spying on me.

For a long time, advertisers had an excuse: logistical issues like bandwidth and connection speed meant that banner technology just wasn’t good enough to give consumers value. But, the proliferation of rich media combined with larger ad units like AOL’s Portrait Unit have changed the game. It’s time for display advertising to shift gears and start using consumer data to improve, not disrupt the webpage experience.

Saturday, September 24, 2011

You've Got Spam

For as long as there has been online advertising, there's been the promise of laser like precision in the delivery of online banners.  Instead of excitement, the technology that would finally make "right time, right place" a reality was cast in a threatening light.  Sure enough, its clumsy debut was alarming.  I remember when I first caught Gmail, like a snooping mailman, peeking at my emails.  It was creepy when the couch I saw on West Elm's website started following me around the internet.  By far the most disturbing moment was the day when Specific Media, without any irony, hit me with banners that touted its company's superior ad targeting technology.  Was it possible that Specific Media knew that I was a digital media buyer?  I wouldn't put it past them, Specific Media is the same company who invented the pop-up ad.

The clumsy arrival of targeting created a paradox.  As an industry professional, I paid close attention to the targeted banners in the hopes they would outperform and make my clients happy.  So when Specific Media seemed to figure out that I was a media buyer, a part of me nodded knowingly. On the other hand, it aroused some serious paranoia.  What else did advertisers know about me?  In 2009, the government took notice and urged the online advertising industry to self-regulate its use of targeting.  

Today, not much has changed.  Over the years, targeted ads have indeed outperformed and brands have begun to capitalize and show positive ROIs. As a result, selling consumer data is big business.  But, this booming marketplace of buying and selling consumer data still largely takes place without consumers’ consent, so privacy issues persist.  Some start-ups have tackled this problem and tried to give consumers more control over their data. Still, the industry needs to do more in order to preclude a profound consumer backlash.

What’s the creepiest way an advertiser has targeted you?  

See More:  What the Online Ad Business Could Learn from Netflix, Amazon and Pandora