What If Google And Facebook Admitted That All This Ad Targeting Really Doesn't Work That Well?

from the the-data-obsession dept

You may have heard the famous line from early department store magnate John Wanamaker that “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Over the past decade or so, various companies have argued that their ability to provide a ton of data, combined with whatever algorithmic magic they could throw at their platforms, could lead to a magical mythical world in which there were perfectly targeted advertisements. And, of course, in the past few years there have been literally just two places where advertisers believe they can get perfectly targeted advertisements that don’t waste half (or more) of their ad spend: Google and Facebook.

The end result of this thinking is that Google and Facebook need to engage in what people refer to as “surveillance capitalism,” collecting a ton of data on everyone, building a huge profile about every user, and snooping on basically everything everyone does all day. This is why people have been getting more and more annoyed about the privacy trade-offs over the past few years (though, not so annoyed that they’ve stopped using these platforms in any significant way — though, that could happen). It also has resulted in advertisers assuming that they must put the bulk of their ad dollars into those two platforms on the assumption that the money is better spent there. Indeed, the most recent IAB report on this noted that while the internet ad market continues to rise, 90% of the growth went to Facebook and Google (together the two companies represent about 58% of the total market share for online ads, but 90% of the growth in 2017).

Advertisers have been completely sucked into the belief that if you want to get results for your ads, you simply have to throw money at those two giants, and they’ll mix some magic pixie dust with all the data they’ve collected, and voila: perfectly targeted advertising. Everyone get so focused on magic words like “big data” and “artificial intelligence” and “machine learning” that they rarely ask the larger question: does any of it actually matter?

As more and more questions are raised about the data practices of Facebook and Google, it seems worth questioning whether or not they actually need to be collecting all this data, and how much of a loss it actually is if they don’t. Just recently, Facebook announced that — as part of a settlement with the ACLU — it was drastically changing how it handles certain ads: specifically that it would no longer allow such granular targeting for housing, employment, or credit ads — all three of which were seen in the past as leading to discriminatory outcomes.

If such targeting really was important and useful, you’d think that this would have resulted in Facebook’s stock price cratering. Instead, it went up.

The little secret behind all of this that very few people want to admit is that, in most cases super-targeted ads are crap. They don’t perform well. That’s because even if you’re putting the ad in front of the right demographic, most of the time they don’t care or don’t want to see whatever it is that you’re pushing. Or, it shows an ad for something you already have (or the ever popular laugher: something you just bought and don’t need to buy again).

Unfortunately, most advertisers don’t quite realize this yet, and Google and Facebook are in no rush to tell anyone (though, frankly, they should be more upfront about all of this). Some are realizing this through other means. It didn’t get that much attention, but back in January it was reported that, because of the GDPR, the NY Times stopped using behavioral targeting for ads… and found its revenue went up. The Times is doing much more basic targeting now: just contextual and geographical.

And, if anyone should know this, it should be Google. For much of Google’s existence, its big secret sauce was not deep knowledge about the people seeing the ads: it was just matching them against their search terms. That is, just a bit of simple contextual information, rather than tying it to a giant portfolio of data about you. It’s really just over the last decade that Google really focused hard on building data profiles on everyone and “customizing” everything. There may be some advantages to some of those customizations — and there are certain useful things that come with the data — but better targeted advertisements… don’t really seem to be among them.

Frankly, if Facebook and Google want to get regulators off their backs, they might start by coming to terms with this basic fact themselves and choosing to stop collecting so much data on everyone. Recognizing that they can still build incredibly powerful ad-driven businesses without so much data would be a big step forward. Right now, unfortunately, it seems that everyone remains bought into the myth that they need this data, that their business models are dependent on this data, and that this data is actually useful in the advertising context. Bursting that myth might mean that advertisers aren’t quite as enamored with Google and Facebook over the long haul (though, they’d still spend a ton of money with them), but it might lead to a better overall experience for users, and a hell of a lot less regulatory pressure.

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Companies: facebook, google

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Comments on “What If Google And Facebook Admitted That All This Ad Targeting Really Doesn't Work That Well?”

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45 Comments
Anonymous Coward says:

Re: Re: Re:

These companies took the ad revenue while the advertizers were salivating all over themselves, but those who’s data was being sold unknowingly felt like they had been molested and the smaller websites who were busy forming the internet and now what is left of it lost those advertizing revenues. In stepped those (first search engine) haha and spying became even more lucrative. Its such a pity many are beside themselves in disbelief. The internet came and went before it ever really got started because of a few truly sick and greedy dickheads.

Anonymous Coward says:

Re: Re: Re:

There’s some incentive: the threat of users leaving in disgust, increasing interest for government regulation, and lawsuits, to name a few examples.
This reply is indicative of everything wrong with the issue. Let’s break them down:

"Users leaving in disgust": right, as if this were ever to be true. Not only are users not leaving, where would they go to avoid such tactics? Even Techdirt uses targeted ads. It’s literally inescapable unless the website stops using ads.

"government regulation": This is never the regulation people think it will be. Every "attempt" at "regulating" a business has always resulted in worse ways for the business to find other means.
The simple fact AT&T was deliberately broken up as a federally regulated monopoly has lead directly to the issues of ISPs today.

Let this sink in for a very, very long time.

"Lawsuits": LMAO. The term "rose-colored glasses" is applicable.

"to name a few examples:" Nope, this covers them all. There are no other options left.

The reality of the situation is advertising focuses on the few who are affected by it, which can result in increased sales.

For the rest of us: we use adblockers because we know ads don’t work and they’re fucking annoying as hell.

What’s really disheartening are those companies whining about ad revenue losses as being the same as business losses.

If a company is sustaining itself on ad revenue and is not an advertising company, it is not a company.

The truth hurts.

Anonymous Coward says:

Re: Re: Re: Re:

""Users leaving in disgust": right, as if this were ever to be true."

  • AOL is still alive, you’re still using it right?

"It’s literally inescapable unless the website stops using ads."

  • Disable javascript … escape enabled

" Every "attempt" at "regulating" a business has always resulted in worse ways for the business to find other means."

  • I have tried to parse this, but there are too many possibilities. Let me guess, you think business is self regulating and would never do anything wrong.

"The simple fact AT&T was deliberately broken up as a federally regulated monopoly has lead directly to the issues of ISPs today."

  • Bunk. The problems to which you refer existed for some time prior to the telephone.

"The reality of the situation is advertising focuses on the few who are affected by it, which can result in increased sales."

  • The reality of the situation is advertising is all lies swallowed by the gullible.

Are you a fellow graduate of the school of silly business?

Thad (profile) says:

Re: Re: Re: Re:

"Users leaving in disgust": right, as if this were ever to be true. Not only are users not leaving,

https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribers-worldwide/

https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

where would they go to avoid such tactics?

This is a reasonable question. If subscribers are leaving Facebook and going to Instagram (as seems to be the case), that’s not really a loss for Facebook.

Even Techdirt uses targeted ads. It’s literally inescapable unless the website stops using ads.

Nonsense. Adblockers and tracking blockers exist. While this does create an arms-race situation, sometimes a feature becomes so odious that browsers disable it outright — remember popups? And we’re seeing the same thing happen with autoplay videos. There is a risk — not a certainty, but a risk — that browsers will start blocking certain types of tracking ads. Obviously Google Chrome isn’t going to block Google ads, but it’s begun to set parameters for what constitutes an "acceptable" type of ad.

"government regulation": This is never the regulation people think it will be. Every "attempt" at "regulating" a business has always resulted in worse ways for the business to find other means.

That doesn’t mean Facebook doesn’t see government regulation as a threat.

The simple fact AT&T was deliberately broken up as a federally regulated monopoly has lead directly to the issues of ISPs today.

No, AT&T being broken up isn’t what led (BTW, lead is a metal) to the ISP issues of today; AT&T being allowed to merge back together is.

"Lawsuits": LMAO. The term "rose-colored glasses" is applicable.

"LMAO"? How the fuck old are you?

"to name a few examples:" Nope, this covers them all. There are no other options left.

…did you read the article? The entire article is about another example of reasons why Google and Facebook might wish to abandon targeted ads: because they don’t work.

Federico (profile) says:

Re: Monetisation boycotts and targeting

Apart from GDPR, I think a significant push against behavioral advertising might come from the ever-increasing amount of advertisers which wish to "boytcott" some websites, YouTube channels, you name it. Unilever has decided to switch to whitelisting:
https://www.reuters.com/article/us-unilever-advertising/unilever-to-pick-trusted-publishers-for-digital-advertising-idUSKCN1R900B

Maybe pretty soon we’ll be back to what is essentially the old world of display advertising, where you select some (kinds of) venues where to put your ads rather than attempt to chase specific demographics all over the internet.

Mason Wheeler says:

Not only does "all this ad targeting really not work that well," it’s actually actively counterproductive. Any discussion about targeted advertising should include the principles laid out in the 2013 article Targeted Advertising Considered Harmful, which delves into the psychological reasons why when a person notices they’re being targeted by a "relevant" ad, they become less inclined, rather than more, to follow it.

Rocky says:

Re: How about....

If I run across an intrusive ad or just plain stupid ad, I add the brand to my do-not-buy-list plus blackhole the domain serving up the ad.

It’s getting a bit long at this point which means some type of wares where a bit problematical to get hold of for a while, but I’ve switched to buy stuff from local brands as much as I can at this point anyway since there are more and more of them popping up. The price is a bit higher, but so is the quality.

It’s my way to say f*ck you to the big brands.

Gary (profile) says:

Targets

the targeted adverts I see the most of are on Facebook, and I see things advertised because they are already in my Amazon shopping cart.
Creepy.
Oddly on-point – those are certainly things I’m interested in.
But completely misses the point – they are already in my cart waiting for an order, it’s a moot point and an useless ad.

Anonymous Anonymous Coward (profile) says:

What to advertise and to whom

The thing that has always gotten me about targeted advertising is how they think they know what I am about to buy, or am interested in buying. I might do a search for something that I am interested in, but have no intention of buying. I might research a field that has nothing to do with any possibility of any future purchases. They might conclude that I am looking up information about…say clouds, that I am not going to try to buy a cloud, but instead assume I want a weather station. I don’t.

So with all the data they dig up on someone, there is still some set of assumptions being made that don’t necessarily correlate to someones buying behavior. Even trying to use machine learning or artificial intelligence to overcome the deficiencies of those assumptions by better targeting the differences between what they thought I would buy and what I did buy isn’t going to help them predict the future of what I might be interested in buying, simply because tastes and interests change. Then I might have bought it off line and they have no idea about that purchase. I don’t use store cards and tend to spend cash.

Then there are economic factors as well. Today I might be able to afford an economy car, while dreaming about some super car. In the future, though, I might be able to afford something in between. So what do they target me with, and how do they justify their efforts when I actually go an buy a used car?

The advertising buying businesses might be better off bolstering their brand names broadly, rather than advertising products to individuals. Perhaps if Mr. Wanamaker went about telling the world how and why his store was different and better than his top five competitors, he might have seen a different value perspective from his advertising dollar, as apposed to advertising certain products on sale. Maybe he did just that, but still felt his advertising program lacked the punch he desired.

That leaves us with advertisers having to understand that even when their ads are seen, they may not have the desired impact for a variety of reasons, and accept that trying to target individuals might be just as wasteful. Then, add in the feeling that targeted individuals get when they realize that someone has been poking around in their lives, and use their disgust to go a different direction.

Zgaidin (profile) says:

Re: What to advertise and to whom

There are times and ways in which targeted ads make at least some sense (even if they are creepy). If I know that you just bought a bunch of diapers, and that based on specifically which diapers you bought I can reasonably assume you have a six month old – I can reasonably target you ads for bottles, bottle nipples, teething toys, children’s books and videos, baby food, etc all based on a single purchase.

That, as you note, is a far cry from reasonable ad targeting based on your web search history. Targeted ads make way more sense based on things linked to purchase history (things you’ve proven you’re willing to spend money on) than interest history, and you can build reliable models about that sort of thing. For example, if I run a business that sells auto wax and car-washing accessories and the like, I initially target my adds at people who just bought a new car. Over time, it turns out, my ads are way more successful when targeted at people who bought new sports or luxury vehicles than economy cars or family SUVs, so I tweak my ad strategy to only target them. That’s smart business, but sending you adds for auto wax because you googled images of an Aston Martin is insane. That’s probably well more than half my money wasted.

TFG says:

Advertisements are rather unpersuasive to me. It seems like a fair few advertisements present themselves as trying to convince me to purchase the thing even when I may not have otherwise though I need or want the thing.

The only time I will purchase the thing is when I have decided I need or want to purchase the thing beforehand. Advertisements may help to make me aware that it is available at a place, and may help convince me to get it from a specific provider, but they’ve never convinced me to purchase the thing in the first place.

For me, simply making sure that the fact that you sell it is easily located is the way to get my business – I won’t be buying your stuff unless I’ve first decided I want it. So data collection, targeted ads, etc. etc. etc. – they definitely aren’t worthwhile where I’m concerned.

ECA (profile) says:

Ad targets...

The programs are interesting, but Just as bad as Snail mail..
But abit of gardening supplies and end up on a list for Every gardening book in he world??

Fun isnt it..

Yo buy a repair part oin the net and Then you get adverts for that SAME part and every part for anything that USED that part..

IT AINT EASY..

the most Fun Iv had is looking for Clothing..Anyone seen the latest prices?? TRY to find linen and cotton clothing.. WOW the prices for something so cheap, is STUPID..
Goto a store..try to find the Cotton shorts(be careful, this stuff is REALLY bad quality, wont last 1 year).. you wont Find much if any..its all 50/50, 65/35 or all synthetic and costs $20-30 for what you CAN find, with Adverts all over it..
TRY to find the old cotton Gyn shorts we used in school… Iv not seen a good quality pair in years..
(good quality= Hold up to light and NOT see thru it BETWEEN the threads..(look at bed sheets, Close up,as the best way to see quality)

Anonymous Coward says:

Well, just like much other heavy or bulk surveillance, they think the data could be more useful in the future, after everyone is long resigned to it and people have lived their entire lives knowing nothing different. The extreme longitudinal data collection and further development of both machine learning and use cases make this something so attractive that it violates the cultural rules of business most often projecting mostly to the next quarter at the most.

michael (profile) says:

Depends on the business, I guess

"in most cases super-targeted ads are crap. They don’t perform well."

It would be great to see some actual evidence of this, particularly from an ROI standpoint.

I wouldn’t expect Google ads to do that well, particularly on a national level. But I own a local business, and our Facebook ads are extremely lucrative. For like $5 I can put a super-targeted event ad in front of several thousand people (with no other advertising), and expect a turnout of several dozen to several hundred, depending on the event.

madasahatter (profile) says:

Forgetting something

Targeted advertising ignores one key reason to advertise – brand awareness. In a mass market, customers need to know you exist and generally what you sell. If they are unaware of your product, they will not look for it or buy it. Now if you have a product that tends to appeal to a specific demographic it does make sense to advertise where that demographic will congregate. But I am talking about relatively broad demographics, such as males between 20 – 35.

The consistent problem with highly targeted advertising is context, what is the person’s motivation for the product choices and purchases they made. The narrower the focus the more critical extremely precise information becomes; information that is not that easy to get. Broad demographics, such as the example above, will not require the precision and detail to be effective.

Ninja (profile) says:

When you let the tracking reign free the ads get downright creepy sometimes. In any case, this ad hammering seems to be saturating people to the point it’s starting to have the opposite effect. When I’m using a site or app that does too much advertising or it’s too invasive I find myself memorizing the companies to avoid them like the plague.

On a side note I’m actively avoiding companies that either call me directly or send unwanted message. So yay for advertisement I guess?

bobob says:

I think the article has a mistaken idea of what ads are for. I used to believe that ads were to sell products (in that naive sense) until I worked in college selling stereo equipment. The owner was the best salesman I have ever met, bar none. I mentioned that the commercials he ran on TV (small college town) were rather annoying and wouldn’t convince me to buy anything.

He agreed that th ads were rather annoying, but pointed out that the purpose of the ad was to put the name of the store into people’s heads so that wen they did decide to buy something, they would be familiar with the name of the store as a place to start looking. Ads don’t sell products. The just make sure that the company name/brand/products are something you’ve heard of before.

Anonymous Coward says:

Re: Re:

You have a point but for some reason Hulu thinks I speak spanish. I have no idea what the ads are trying to sell let alone who is trying to get their brand in my head. Rarely, does Google throw an applicable ad my way that I would even consider the advertiser. I guess my interests are so random they are throwing off the AI.

GERALD L ROBINSON (profile) says:

AS targeting

Something not mentioned is that as targeting is counter productive for the advertiser. Before targeted ads I went to a website from an ad because they had a product or service I did not know about ~once in two weeks. Sense targeting started I haven’t done this for a targeted ad. I bought a lot of gear from B&H as I used to own a video company, I don’t find their targeted ads anything but annoying as I subscribe to their news letter! I’m cases where folks do business with a business additional ads for that business are at best redundant and at worst annoy customers.

Anonymous Coward says:

A lot of people say they ignore ad,s or dont like them,
ads are aimed at shopkeeperss , supermarkets , suppliers ,retailers ,wholesalers .Not just at the consumer .
product x thats advertised on tv, is more likely to end up
on your local supermarket shelf.
Then one thats never advertised on tv or in general interest high selling magazines .
Theres dozens of android phones, samsung can charge a premium over brand x phone because they spend millions on
advertising and they make deals with phone companys .
IF people see 20 products in a shop they tend to
buy a brand they know if they can afford it,
rather than just the cheapest item.
Yes its true lots of ads may be ignored or have no effect
on the viewer .
I thing websites could aim ads at the consumer or reader of
certain articles ,eg people who use pcmag or theverge may be
more likely to buy advanced tech services, or products .
Maybe google has info on millions of users as they have the no1
email app and browser ,chrome .
and they will use the data even though it ,s no more effective than ad,s based on the website they displayed on.
EG kotaku.com a gaming website probably has an audience mostly under 40 ,
maybe 60 per cent male, 40 per cent female .

Al says:

google jews and co

The jews are behind all this, it’s the jews of course

Zuckeberg, facebook: jews, google: jews, corrupt bankers: jews, lobbies: jews again and again, soros jew, the media, the fake news outlets, and Hollywood, CNN and all the other fake news outlets: jews of course!

They are the one behind the fake financial crisis to grab power, the false flags, the fake news, the fake terrorist attacks, the fake “migrations’, tey are the ones who created isis, the wars, pushing islamic hordes and the scum of the third world onto our lands.

To rule they must divide, create chaos and permanent crisis, so they can continue to manipulate us and make us fight each other when we should fight them and their muslim allies.

Hitler didn’t want to get rid of them for nothing.

Anonymous Coward says:

Re: google jews and co

People with Jewish backgrounds are over-represented in the ruling class and the intelligentsia because they tend to be more educated than others.

But have a look at BRW rich lists, and the boards of F500 companies, and who the world leaders in academia are.

If your simple-minded neo-nazi rants were accurate then these lists would almost exclusively be made up of Jews.

If you have a problem with the Israeli government’s behaviour or policies then talk about that specifically.

If you have a problem with a particular business leader or politician then talk about them specifically.

At the moment you just come across as a an angry, ignorant, bitter nobody with nothing valuable to contribute. Exactly the kind of pathetic, malleable fools that monsters like Hitler exploit in order to grab power.

Scary Devil Monastery (profile) says:

Re: Re: google jews and co

"If your simple-minded neo-nazi rants were accurate then these lists would almost exclusively be made up of Jews."

It’s somehow telling that reading just ten lines from a neo-nazi about this "jewish conspiracy" gives the impression that if I want to be wealthy, untouchable by law, able to mind control entire governments, time travel to doctor evidence and, for all i know, become faster than a speeding bullet, more powerful than a locomotive and able to leap tall buildings in a single bound…then all I need to do is convert to judaism. All those jewish people walking around like common folk rather than fly under their own power must just be playing the long game, surely.
/sarcasm tag for anyone actually in need of it. Which basically means Baghdad Bob/Blue/Bobmail/Jhon/sockpuppet #5/etc.

It must truly suck to be a white supremacist and KNOW, beyond any doubt just how inferior their birth ethnicity and creed makes them, looking at the propaganda they trot out all the time.
/no sarcasm tag, at all.

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