Targeted Advertising

Targeted advertising is a subset of advertising that focuses on reaching customers based on characteristics that line up with the product an advertiser is selling. These characteristics can be demographic: targeting race, gender, age, income, education, and/or employment; psychographic: targeting values, interests, personality, lifestyle, and/or opinions; or behavioral: targeting recent searches, purchases, clicked ads, or other online actions. Advertisers can use these characteristics through tracking consumers' behavior and data.

Advertisers are falling out of favor with untargeted ads such as billboards, print, and radio ads. Due to cheaper cost and higher return on investment, they have turned to more "relevant" targeted advertising. Targeted advertising falls heavily into the purview of surveillance capitalism and is one of the main drivers of the commodification of consumer data. The main draw is the elimination of wasted advertisements. The main agents are tracking based advertisements to advertise based on historical demographic and behavioral data that align with product demographics, and contextual advertisements, which involve matching product demographics to the content of the advertisement's host.

History

Surveillance Capitalism - surveillance capitalism -

Methodology

Using consumer data, online advertisers seek to define a profile for each user and deliver advertisements that suit their interests, particularly to counter the decline in clickthrough rate on online advertisements. These profiles are compiled and advertisements are delivered through three main methods: contextual targeting, re-marketing, and behavioral targeting.

Contextual Targeting

Contextual targeting aims to reach consumers by matching ads to the context of their locations, and ignores the profile of the user viewing the ad. For example, a car maintenance service running ads on a car blog or magazine, under the premise that viewers of this site own cars and would use their service; or a pet store running ads on a pet adoption clinic's website, under the premise that viewers of this site own pets or are soon to own pets. This method operates based on assumptions about user demographics based on the pages they visit.

Re-Marketing

Re-marketing is the lowest level strategy for using behavior tracking to make advertising choices. Advertisers target consumers who show very specific interest in a product or service, such as a user who started a credit card application then didn't finish it, or a user who habitually purchases a given product. These consumers can then be issued "re-marketing" ads, that exploit narrow signals by advertising for those products in which consumers have already shown particular interest.

Behavioral Targeting

Behavioral targeting is the most pervasive and persistent method for targeted advertising. On any given page, it selects a "related" ad from a much larger catalog that could be shown to a consumer. "Relatedness" is based on the interest profile of the consumer, and computed by the advertising network (a company that connect advertisers to hosts). This method is more invasive than contextual targeting or remarketing, as it presents ads relative to long-term online behavior, rather than the current behavior or one instance of previous behavior. This data is additionally collected over a long period of time, and has been a source of controversy for users seeing ads related to them, but unrelated to the page they on which they see the ad.

Mediums

Targeted advertising sees a wide reach from physical to digital media, and presents itself anywhere that different consumer interests lead to different consumer behaviors. Different mediums lend themselves to different methods of advertising, but the practice lends itself to any information medium.

Magazines

Historically, targeted advertisements contained within magazines have been contextual. Fashion magazines see fashion ads and sports magazines see sports ads. These contextual targeting patterns prevail into modern times, but are changed in relation to the advent of the internet. Magazines have seen a decrease in the efficacy of each advertisement in terms or revenue returned for each print ad. However, they have come to see consumers as more valuable when they know them to be multimodal in their engagement habits. This is to mean that even the opportunity to advertise to one reader in both a print and digital medium makes that consumer and related ad worth more.

Radio

Even as far back as the 1990s, radio broadcasters saw the high targeting potential in radio based advertising. Broadcasting advertisements again fall under the purview of contextual advertising, with context tied to the content of a given station or program. Targeting included demographics, geographical placement, interests, and even psychological make-up. Not only the content of a program, but also its timing and location affect advertising choices. Other choice advantages to advertisers included low cost, high frequency, and high creativity. At their advent, the cost per consumer reached was a dramatic improvement over print advertising costs. Today, radio and TV are on par for cost per consumer, but radio sees an advantage in repetition per purchase. Given similar budget a radio ad can run over 10 times more frequently than a TV or print advertisement. Radio additionally gave advertisers the opportunity to revolutionize the field. Audio stimuli in advertisements allowed writers to add emotional components to their work and make more memorable, impactful pieces.

Television

Moving on to television advertising, TV advertisers hoped to take advantage of benefits of targeted advertising to become competitive with the internet's advantages in cost and specificity. TV advertisements had already enjoyed advantages including similar cost per capita to radio ads, easy reusability, and another option for emotionally and visually memorable advertisements. In competition with other advertising media, cable networks took advantage of user data to air advertisements specific to zip codes, neighborhoods, or even individual homes. The data compiled for TV ads can stretch beyond an internet footprint, and may include information about party affiliations, past voting history, marital status, or criminal records. In some cases targeted TV ads cost over three times what non-targeted ads cost, but their introduction has undone some of the economic loss to streaming competitors.

Internet Service Providers

Internet service providers (ISPs) play a large role in the surveillance capitalism aspect of advertising. They collect immense amounts of data from users and households nation-wide, and often can feed that information to parent companies or subsidiaries to drive targeted marketing decisions. Collected data include Device Specification, Service usage information, Browsing information, and Location data. Device specifications tell the ISP about the types of devices on each network, which can yield demographic information on users in a household. Service usage information includes bandwidth usage by device and by time of day, which can help advertisers with time based targeting. Browsing information includes where information is being sent and received from which devices. All of these categories provide advertisers dense information with which to categorize consumers.

Search Engines

Search engines allow advertisers to reach users through their interactions with just the search engine interface of the web. Google's own ad support says advertisers can reach consumers based on who consumers are, their interests, active search habits, or past searches or interactions with ads. These advertising techniques fit behavioral targeting and re-marketing via search engines. Additionally, techniques like AdWords -- which match advertisements to key search terms -- fill the role of contextual targeting, giving search engines access to all vectors for targeting their ads. Researchers for the 2009 World Wide Web conference found behavioral targeting to be massively effective in advertising surrounding search engines, for over sixfold click-through rate (interaction with an ad) improvements.

Streaming Services

Video and TV streaming services (e.g. YouTube, Hulu, HBOMax) serving as advertising hosts gives advertisers another avenue to serve their product to consumers, and, like search engines, hold a wealth of knowledge on the consumers that they serve ads to. During the Coronavirus pandemic of 2020, TV/Video streaming services saw unprecedented growth. As these platforms' popularity continues to grow, advertisers are drawn to them for more consumer reach. Through ISPs and their own collection efforts, advertisers benefit from browsing data, watch history, demographic, and geographic information to understand a user from multiple angles.

Advantages and Disadvantages

https://dl.acm.org/doi/pdf/10.1145/2187836.2187852

Advantages

Advertisers

https://www.sciencedirect.com/science/article/pii/S0969698918307744

Disadvantages

Consumers

https://www.tandfonline.com/doi/full/10.1080/17530350.2019.1574866

Controversy

Discrimination

Targeted advertisements have shown the capability to discriminate against the viewing user. In one example instance, ads related to housing, employment,and financial services have been found to target people of certain races. Advertisements as such violate anti-discrimination laws in the US.

(not a lot of writing but here's some good sources if u want!)

http://proceedings.mlr.press/v81/speicher18a/speicher18a.pdf

http://proceedings.mlr.press/v81/datta18a/datta18a.pdf

https://heinonline.org/HOL/LandingPage?handle=hein.journals/stlulj63&div=9&id=&page=

https://heinonline.org/HOL/LandingPage?handle=hein.journals/berkjemp40&div=5&id=&page=