How often have you been looking at something on Amazon, and then immediately afterward you suddenly see ads for the products you were looking at on Facebook? Or go to your favorite coffee shop, grocery store, or even movie theatre, and again suddenly their ads are everywhere you look? It is not random, nor are you the only one. What you are seeing is the result of what is known as targeted advertising, a practice where retailers, social media companies, cell phone providers, and others share information to better market products towards you.
While it is easy to look at this and see it as something to be afraid of or be concerned about, targeted market advertising has had many benefits for consumers and retailers. The benefit for consumers is that instead of being swarmed by ads that they are not interested in or are not relevant to them, they now see ads for things they may need every day or may not know that they need yet. For businesses, the benefit is lower spending in advertising dollars for a better chance of reaching out to those they are trying to connect with. And while there have been privacy concerns and laws coming into place to protect a person’s right to privacy and ensure what data can and cannot be collected, there is much to be learned about targeted advertising.
What Is Targeted Advertising?
Behavioral targeting, interest-based targeting, and consumer interest in targeting are all different names for targeted advertising. But what is it?
In our digital world, it is “one of the most result-driven advertising practices utilized.” Another definition of targeted advertising is “a form of online advertising that focuses on the specific traits, interests, and preferences of a consumer.” Many forms of targeted advertising work by collecting data about a person’s purchasing habits, gender, age, or income level by tracking their activity on the Internet. Tracking is done through cookies. Cookies record what you do, see, and say on web pages or when you visit a search engine or social media site. Providers collect this data and offer them to advertisers.
Advertisers collect this information to ensure that their ads are being seen by those interested in what they are providing. If you are looking for women’s clothing online, it would make sense to see advertisements on women’s clothing and not, say, men’s shoes or barbecues. It allows consumers and businesses to connect over the distance of the Internet and provide better services.
It’s important to understand that targeted advertising is in many ways helping to democratize our digital experience. Advertisers build algorithms that target their ads towards those most likely to want or need their services. This practice saves time for consumers and reduces the amount of unnecessary or undesirable ads people may see.
What Types of Targeted Advertising Are There?
There are many types of targeted advertising both in the digital world and out of home. Some forms of targeted advertising rely on the highly personal information collected from Amazon or other retailers to target you for ads to purchase again. Others use generic demographic information or smartphone ID codes to see who’s paying attention to ads and focus their attention on them.
Here are a few of the more common forms.
Search Engine search based
This type of targeted advertising tracks our search history. The idea behind it is that if a person is looking up something, they are probably interested in items related to it. For example, if you were to plug in a search for designer shoes, you might see ads for Balenciaga’s or Christian Laboutin pumps the next time you scroll through Facebook.
In many cases, these ads can be beneficial, tying interested consumers with what they have been searching for, although there are some items (think toilet seats) that we will not buy consistently. The challenge in targeted marketing is in what data is collected and how the data collected is used. Some of it is useful; the rest is probably not.
Like search engine-based ads, retailer targeted advertisements are search-history-based. What makes them different is that they are not generated from a Google search but instead by your search history and purchasing habits within a retailer’s website or app. If you visit a site and do not purchase anything, afterward, you may see ads on social media prompting you with limited-time offers or other incentives, encouraging you to buy from that site.
Alternatively, Amazon often shares purchasing information across different social media platforms. So if you recently bought a Cuisinart 12-piece knife set on Amazon, you are more likely to see Amazon ads for purchasing kitchen appliances.
This type of targeted advertising uses location data to connect with its desired audience. Content is displayed based on “automated or assumed knowledge of consumers’ location.” Imagine a local watering hole that sends out ads to smartphones or devices located within a 5-mile radius or to those that are searching for pubs within a specific geographical area.
Advertisers can access location data from location-based delivery apps, using a beacon to scan for GPS or WiFi signals within a neighborhood or area, or by pinging cellphone towers.
How Can Targeted Advertising Be Used for OOH Advertising?
Outdoor or out-of-home advertising has the benefit and drawbacks of being out in the real world. To interact with outdoor advertising, people must be physically present. As most forms of targeted advertising rely on our digital habits, it may seem like the two would not mix well, but they can and do.
When we think of targeted advertising and billboards or OOH, the reality is less like Minority Report and more demographic-based. For example, in 2017, a team of researchers released a study on advertising in the London Underground. They collected millions of geotagged Tweets to figure out how people moving through the train stations traveled. Collecting this data allowed them to analyze trends and helped determine better placements for advertisements.
A recent trend in OOH advertising is integrating mobile advertising with traditional outdoor advertising. Whether by embedding scannable QR codes or website links in mobile truck billboards or incorporating impression analytics and data collection in mobile truck advertising campaigns, the digital and outdoor advertising worlds are converging.
An example of this is how we operate here at Movia. We integrate a real-world presence with retargeting and analytics to create value for our clients and ensure that target audiences are reached. Our trucks are on the road between 8-10 hours a day, and routes can vary from downtown to suburban enclaves. Once we have determined the best truck route to reach our clients’ audience, the next part of our strategy comes into play.
Our mobile advertising trucks come equipped with GPS, so our clients can track them as they move along their routes. At the same time, our beacon technology picks up WiFi signals from cellphones within 100 meters, logging these as “impressions” so that we can keep track of how many people have seen the mobile truck ad.
Those that do see the ad are then sent targeted digital ads on their devices. If they choose to click on the ad, that impression is logged for clients as well.
For example, we recently worked with Leatherman on a 5-week campaign in Portland, Oregon. Our mobile truck billboards logged 8.4 million impressions. With only five trucks on the road, we were able to promote their tools and delivered 3500 custom flyers. In the following retargeting campaign, there were 1.4 million further impressions logged from Leatherman’s specific target demographic. We reached out to people already interested in what Leatherman was offering without oversaturating anyone who was not—saving money for our clients and promoting a more positive advertising interaction.
The Good and the Bad of Targeted Advertising
As with all marketing strategies, there are positives and negatives associated with targeted advertising. As we have discussed above, some of the positives include:
- Reaching those who are interested in your products.
- Avoiding market fatigue through oversaturation of advertising.
- Cutting down advertising costs.
- Ensuring that consumers benefit from the advertising as much as our clients do.
Some of the main drawbacks of targeted advertising are the concerns around privacy, the collection of personal data, the storage of that data, and how companies use it.
In previous blogs, we’ve mentioned the Cambridge Analytica scandal of Facebook. There is a fine line between having the ability to reach those who are interested in the product and collecting too much information. Because of these concerns, we are now seeing the rise of Privacy By Design guidelines for data collection and new privacy legislation coming into place in California and the European Union.
As a company, we support the ethical collection of data and only collect non-personally-identifying data.
Targeted Advertising and Privacy By Design
While we will be discussing Privacy By Design and GDRP in-depth in an upcoming blog post, key points are essential to note when it comes to targeted advertising and OOH.
Targeted advertising is about to undergo a massive shift. With the rise of Privacy by Design and new data collection laws coming into place, the advertising industry, and the business world as a whole, will see a more significant push towards developing policies and guidelines that emphasize trust and respect for consumers. As we have mentioned, targeted advertising is a great way to drive business and cut down costs. What is now needed is a holistic approach to data and privacy. As the industry evolves, it becomes more apparent that we need to encourage trust and transparency in our practices.
For out-of-home advertisers, digital billboard companies, and mobile truck advertising companies, we all have a responsibility to communicate openly about what data we collect and why. In most cases, collecting information about health conditions, sexual orientations, or relationship statuses is not necessary to create a successful campaign.
In many cases, less really is more. Being transparent about how data is collected, why, and what it will be used for builds consumer trust. For years, there have been stories about women receiving pregnancy or baby-related ads or coupons before they’ve even told their families because of how advertisers used search history data or behavioral profiling.
The General Data Protection Regulation that has come into force in the European Union grants individuals the right to know how companies collect, store, and use people’s data and allow them greater control over all of these areas. Considered the individual’s right to be forgotten, this means that a lot of the targeted advertising practices that verged on the grey or “creepy” area of data collection may disappear over time. While it can be easy to see laws like this as restrictive, for creative advertisers, this presents an opportunity to reinforce the benefits of targeted advertising done right.