Don’t Discount The Power of Targeted Advertising Online

Look, I’m online a lot.    I buy a TON of stuff online – mostly from Amazon.com ($AMZN – no positions).   Like most of you, I think I’m “immune” to internet advertising:  I don’t even “see” the ads that are served to me – not because I have a Firefox add-on that actually strips them out (I don’t), but because they are contextually meaningless to me and I, like many/most people, naturally ignore them.

But you probably know that advertising is getting smarter, more obtrusive, more targeted, and most importantly, more INTERESTING for the user: in the sense that someday soon you are actually going to want the products that are being advertised to you.    I noticed a while ago that when I search for soccer shoes on Amazon, or Zappos, or Soccer.com, I then end up seeing advertisements for the very shoes I was looking for – later in the day on other completely random websites.   This isn’t magic mind reading, of course, there are cookies that track my browsing behavior and then the ads are served based on what they have deduced I am looking for.

Yesterday I actually ended up clicking on an ad and buying a new pair of boots.  Now, this sale wasn’t entirely organic, in that the advertisement was from a site that I was already familiar with and have purchased from previously -  Backcountry.com – but the specific boots that they served me in the ad were not the exact ones that I’d been looking for online recently.  This isn’t the ad that I clicked on, but it’s one I saw today that is similar:

I am not sure who the winner in this “we’re going to find out exactly what you want, and make a fortune selling you targeted ads to capitalize on what we know” business – I’ll leave that to you to hypothesize about in the comments.  I would guess that companies like $FB could be leaders in this sort of “preference data mining” – to coin a phrase, if that’s not already a phrase…

-KD

related: Electronic Scores Rank Consumers By Potential Value

disclosure: at the time I hit “publish” on this post, I had a long trading position in $FB, unrelated to the thesis I enunciated above.

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