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.