Now in the middle of Clickmaniac, I think most teams have discovered just how important ad targeting is. Ad targeting is the secret to achieving a high Click-through Rate (the ratio of clicks to total impressions). It comes as no surprise then that more and more attention is being paid to how audiences are selected and targeted. Just a few weeks ago, facebook added a new feature allowing marketers to target Hispanic users [1]. If go to create your own ad, select the broad targeting option, and you will see an "Ethnic" tab. Currently, "Hispanic" is the only option within this tab, and it's not entirely clear how facebook is identifying who is Hispanic. What's interesting to note is that, unlike most other ways that facebook ads are targeted, a user doesn't supply his or her own "Hispanic status." Rather, facebook must somehow calculate this based on a user's profile.
As anyone who has created a facebook ad has seen, the site allows ad-creators to target users based on location, age, interests, education, and connections (to the page being advertised) (with more ethnicity options possibly to follow). Another way that advertisers select their audiences is through behavioral targeting. Behavioral targeting is when a company keeps track of a unique user's online behavior, like what searches they make and what links they click on, and then uses that information (or profile) to target ads [2]. This technique works very well; behaviorally targeted ads can be more than twice as effective as non-targeted ads [3]. Target is one company that has invested a lot of time and effort into behavioral targeting technology. By tracking customer's purchases, their statisticians were able to discover patterns that indicated the likelihood a given customer was pregnant [4]. They could then send coupons and ads for baby supplies to specific people. In one case, Target figured out that a high school girl was pregnant before her father did [4, page 7].
Finally, we can see how pervasive ad targeting has become by the fact that it is starting to leave the digital sphere. In London, a new ad-system is being used on the city side walks. The display system uses facial-recognition technology to display different versions of an ad to men and women [5]. While currently only showing up on one street, the new ad-system hints at how widespread ad-targeting could become in the near future.
Sources:
[1] http://www.clickz.com/clickz/news/2153352/facebooks-self-serve-ads-target-hispanics
[2] http://en.wikipedia.org/wiki/Behavioral_targeting
[3] http://www.bizreport.com/2010/03/nai_behaviorally-targeted_online_ads_twice_as_effective.html
[4] http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?_r=3&pagewanted=1&hp
[5] http://www.pcmag.com/article2/0,2817,2400473,00.asp
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It is interesting how statistics and learning techniques can be used in better targeting. The "pregnant diagnosis" and facial recognition is amazing...
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