Why the Future of Online Advertising Is About Identity

Rohit,

I read your column with great interest and I agreed with most of it. Demographics are indeed dead, and marketers are certainly looking for better targeting opportunities. I also believe that for advertising to be effective, the target audience – particularly those under 30 - will have to engage with it. And prospects will only engage with marketing if they feel that they identify with it.

But therein lies the paradox. We will engage with marketing with which we identify, but we do not want the same marketers to identify us. For this reason, marketers venturing in social media are walking a fine line between remaining relevant and being intrusive.

So how can a marketer succeed in such a world? The answer lies in taking a step back and understanding that in building long-term relationships with clients, less intrusive and aggressive marketing tactics will result in better results in the long-run.

To take an example from your article, we can differentiate between the 15-year-old teenager seeking rollerblades for himself and his grandmother looking to buy him rollerblades by considering their browsing habits and targeting them accordingly. The 15-year-old would probably be reading reviews to determine the hottest rollerblades to ask Grandma to get, and articles about cool tricks to do with rollerblades. His grandmother, on the other hand, would probably be looking at price comparisons and safety records. Their respective behavior would enable an intelligent behavioral targeting system to serve relevant ads to both the 15-year-old and his grandmother without serving the 15-year-old an ad which would say “43% of 9^th graders in Such and Such High School have purchased Brand X Rollerblades, including your best friends Bill, Mike and Dan!”

As an industry, I think we need to embrace new and better ad targeting opportunities while enabling targeted audiences to feel that they identify with our advertising messages without making them feel that we’re big brother identifying their every move.

Thanks,

Meir Zohar

eXelate

Maybe Google and Facebook - who have access to the information - are taking the initiative of mixing identity with the advertising. But it would make sense for giants as Amazon to start moving in that direction too.

They started to target advertising a long time ago ("customers who bought this item also liked this one", etc) but what if they could have access to some social network? Let it be Facebook (who has approx. 73M registered users), or MySpace (over 250M!).

Having an application that could bring you Amazon to your Facebook could be in the future. Not having to browse over millions and millions of articles but to have a special "store" with what it *thinks* you like - based on your profile, friends, recent purchases, etc.

Google started gathering information about users with Orkut (originally created with the U.S. as a target, but Brazil ended up being the top user).

It's a fight for information - as it seems everything these days is about.  But this topic surely is interesting and open to many opinions!

 

 

Three words: Ad. Block. Plus.

...Google it. 

Rohit,

I just have a question and some quick comments.

It makes sense why demographics would not work that well when it comes to online advertising. However, for Google's keyword targeting is not so obvious. You said that it is better but not complete. Has there been some sort of quatitative measurement or indidicator in terms of performance for the keyword targeting ads at all? Perhaps, such a figure can show us how well this kind of target adverstising has been performing with respect to the traditional demographics. If it works well enough for Google, I don't see why they would want to incorporate "identity of searcher".

I just watched a video news article on Reuters: Assessing 'social advertising', and my understanding is that this is more or less based on "Word of Mouth" marketing but can potentially have a greater audience since it's online. It doesn't seem to necessarily relate to targeting identity that would present privacy concerns as such. Facebook had press release : Facebook Unveils Facebook Ads, which they had this to say about protecting user’s privacy: "Facebook has always empowered users to make choices about sharing their data, and with Facebook Ads we are extending that to marketing messages that appear on the site. Facebook users will only see Social Ads to the extent their friends are sharing information with them." What is your view on this?

Cheers.

I don't really see how Facebook's social ads are helping to identify my needs. If a friend of mine purchases something and agrees to endorse an ad on Facebook, that ad is targeting her consumer choices, not mine. Just because someone is in my social network doesn't mean I share his/her tastes. I think this is a major point that everyone is missing when hailing Beacon as a revolutionary project (although few are actually hailing anything). Plus, if the future of online advertising is about identity, and we're going about targeting identity through programs such as Beacon, then the future of online advertising is really about exploitation. The current alternative for people who are opposed to Beacon is to be very wary when making online purchases and/or to delete their Facebook account. But, based on your predictions, it seems we'll have less of a choice in the future. To do this successfully I think Facebook and others need to address serious privacy concerns.

Social advertising would need to address concerns on privacy. There is still no transparency index to suggest that privacy concerns of customers have been addressed. If anything each new medium just seems to add more questions for a customer.

The issue of Social Advertising as a business opportunity may be relevant but the question that should be answered is should a customer reveal their social fabric to a stranger company that has clearly not answered questions on privacy. 

There is a division of opinion whiz experts on the Facebook media opportunity . A sample reference is the post by Charlene Li on "Close encounter with the Facebook Beacon" . She raises enough disconcerting questions on Facebook and partners.  Are we somehow failing our customers by failing to provide the information they need.

Also think of the whole question of CRM and its failure. What is the point of all the data when the value proposition could not be pinpointed for that narrow an audience ?

If social advertising is to work , lessons from the CRM days need to be learnt , plus the privacy aspect and finally the discussion has to keep the customer at the center of the solution. 

In my view there is a lot of ground to cover before i would feel optimistic on social advertising. Your thoughts please!

"It's interesting that such a potentially disruptive idea is coming from somebody other than Google (Nasdaq: GOOG)". Please, Don't tell me that Google should hold the "monopoly of knowledge". They are doing well, but  many others are working to improve the way we use the internet.

I agree that the future of online advertising should include more than a single parameter or keyword. But relying primarily on identity as search criteria  will limit the ads within a given social network AND not everybody has an account on Facebook or Google. We may well be on our way. But, I think we still have a long way to go.

Hi Rohit,

You present a strong case that shows how consumer identity will become a critical element in the future of online advertising. Now that Facebook is relying on "social advertising" as an effective way to target potential customers, I can't imagine Google standing by and letting this happen without a fight.

I know Google, along with Yahoo, are already making moves to turn their Web-based email services into social networks. You can bet that online advertising is driving their plans to do this.

In your view, how do you think Google will respond to Facebook's "social advertising" initiative? Also, won't legal/privacy issues put a damper on all of this?

James