Everybody knows that the Internet is an
amazing invention. Through it, we can connect to friends, learn new
things, be entertained, and all sorts of other things all without
paying a dime. However, we have to remember that everything comes
with a price. And I'm not just talking about ads, everybody expects
to be assaulted by ads when going online, I'm talking about data
mining.
Now, this is not necessarily a bad
thing, in fact, in many cases it is a good thing. We get more
personalized content and importantly it lets publishers get more
information, so they can make more money from their ads, so we can
get more free content. However, to do this, our online information is
thrown about to a wide variety of companies forming the online
advertising pipeline: advertisers, intermediaries, and publishers.
And, although publishers and advertisers are what we see in this
pipeline, what are really interesting are the intermediaries, the
ones getting the right advertisers to the right publishers.
One of the most straightforward ways
they do this is with demographic, geographic, and behavioral
targeting. However, rather than just targeting publishers as in
traditional advertising, they can also target individuals. By
tracking cookies and trading information with the publishers, these
intermediary companies can track your online presence, so even if you
are currently looking up cute cat pictures on the internet, you could
still be getting ads for those heavy metal concert tickets you have
been eying recently.
But, that is just the beginning of what
they can do. Say you are a website and want to target customers who
are likely to buy again, how would you do this? One trick they use is
that when a customer comes to your site, you drop a cookie on them.
Then you send ads their way and see who comes back, creating a
profile of who are likely to come back. Then you just rinse and
repeat until the profile consists only of people likely to come back.
Pretty cool, huh?
However, they don't just match
advertisers with publishers, some also do quality control, making
sure the advertisers and the publishers make their money's worth. By
tracking which users get which ads and how they respond by collating
information among the publishers, it becomes possible for even third
party entities to track ad value.
The combination of these techniques and
many more shows just how complicated, yet amazing this whole industry
is. The fact that so many companies with limited information in this
industry form a distributed market that keeps the whole Internet
going and profitable is, quite frankly, mind-boggling.
Sources:
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