Thursday, January 13, 2011

Targeted ads - are we going too far?

I read more and more the debate about targeted ads and if it is bad for us and should the government put some controls on.

I say targeted ads are not bade in contrary they are good, but I believe the government should put some controlling on.

First why i think targeted ads are good. My opinion might be driven that I work in the advertisement business.

If the ads are completely targeted, means the brands can display ads specialist to my buying habits or interests then the worst what can happen is that all ads I see are somehow interesting for me and I finally don't see anymore ads for leg shaving cream, lipsticks are other products i have no use and interests in. I would even not see sex ads anymore, if the publisher does it right. Because the publisher website would know I am a man, don't buy any beauty products for my wife and don't click on sex ads.
In the best scenario I would see much less ad placements. If you are asking why, I will explain. We have today on a page in average 6 ads but only because the click rate is so low (in average under 0.1%). The brands need to deliver millions of impressions in order to get 1000 clicks and only 3% of the clicks will (in best scenario) drive to a direct buy. Millions of impressions to generate 30 buys is pretty bad. Now a website has only a limited page views and the more ad placement the more impressions the more they can sell. Right now the CPM (cost per thousand impressions) is for this reason only a few dollars in best case.
Now if a publisher can deliver 80% optimized ads, the Consumer would click more likely and more likely buy offered products. The click rate might go up to 10%, this is an improvement of 10,000%. And then 10% (300% improvement) will buy the product. The advertiser would only need to buy 10,000 impressions instead of 1,000,000 to get same results. As an effect the publisher can raise the CPM from maybe $2 to $200 to keep the brands cost the same (of course $200 would not happen so fast but maybe $80).
By having such high click rate and such high CPM the brands would not buy millions of impressions anymore otherwise their budget would go up. The conversion rate can't go unlimited high because the consumer has as well a budget limit. Therefore it is very unlikely a publisher would sell so much inventory like today. As a result some or half of the ad placements would go away.

At the end if a publisher is able to optimize ads to perfect targeting then we would see much less ad placements than before which at the end we all want. We don't want to have on a website more ads than content.

But why I think should the Government be involved?
I trust most of the brands, they even would not get many times detailed user information. They would tell their agency who they want to target where and the agency would build the ads for them. The publisher will then (or their ad operation company) target the ads as good they can with info they had stored about their web users.
Now there are companies out there i don't trust and don't like, but their ads would disappear on my screen because I never click on them.

But i don't trust many publishers or websites owner in general. Let us take an example like Facebook. They know all about us, who can ensure that they don't sell info about me to dubious companies? One day I might come home and 10 carpet cleaners are standing in my front yard only because my Facebook profile says that i like to vacuum but my vacuum cleaner did break last week.

I don't trust people working for FB, how do i know that they don't scan my data and find out that my wife likes men with long hair and muscles. And they did read that we had fight. Suddenly a FB employee or friend of them is hitting on my wife.

The problem is really not the targeted ads, the problem is that companies are able to store too much information about us which we might or might not be aware of. In a certain degree I don't care if they do, as long I feel comfortable that nobody (even FB) can read my information without my acknowledge.

I can't rely on what a company is saying. But if the government is regulating it, then at least if there is a problem I have the right to fight and will win. Therefore the chances are lower that somebody uses my information to do unsocial things with them.

Face it. If a person is in danger to go to jail for 5 years and has to pay up to $100,000 fine, the chances are much lower that somebody tries it, then when the only risk is to lose the job.

Same for companies, if they have to pay millions of dollar and are in risk to lose their business, the CEO has to go to jail, then not many companies would misuse our information.

The only way to get there, is to have it regulated by the government. The government of course can regulate more. They could for example force web browser companies to enable easy to use functions for the consumer to block data collection. It should be even by default on, and the user can choose to switch it off.

Right now it is a pain of the butt to do so, and TBH google chrome has anonymous browsing but guess, it is owned by google, and who knows if it is really anonymous or only for the rest of world but google.

Bottom line, i would like to see for myself more ads tailored to me, but i am afraid, if the government does not react, that too many people know too much about me without i even know.

Really bad is it with our mobile devices. They have all a unique identifier and usually a cell phone is only used by one person. The collection of data gets even further because it knows your location and is all the time with you. this is the reason why Apple got trouble with iAds and this is good so.

- Posted using BlogPress from my iPad.
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