On the way up to Bellingham to present to the Bellingham Angel Group (who I must note were really well organized and friendly to boot) Mike Crill of Atlas Accelerator and I had a very interesting discussion about Facebook, Google, and advertising. Specifically, the idea that by sharing more information with a company that they can then send you "ads that interest you."
Sounds great on the surface. Let's dive a little deeper...
Put one way, advertising is the process of convincing people that they want to buy what you're selling. Merriam-Webster defines advertising as "calling something to the attention of the public" but I think that's a little too simplistic. You not just saying, "Hey, here's our stuff and you can buy it if you want."
Nope, you're trying to convince people that your product is better, that yours is cheaper, that they really want... no strike that... that they really need yours.
As the folks on the receiving end of this we try like hell to filter it all out. We don't want to hear the messages. Not just because they are irrelevant to us, but often because they are both relevant and persuasive. I've got more than enough junk that sounded like a good idea at the time thankyouverymuch.
So the advertisers try to convince you to buy something, and you try your best to ignore them. In this way advertising looks a lot like a classic measures-countermeasures game. But right now the advertisers have imperfect or incomplete information about you.
Advertisers come up with something, you learn to ignore it (e.g. dancing banner ads), they come up with something new, you learn to avoid it... and so on.
Saying that we want more relevant advertising based on our likes, dislikes, culture, background, blah-blah-blah is kinda like saying, "here are the keys to my brain, come on in and make yourselves at home and my wallet is on the coffee table."
We don't want more relevant advertising. We want less advertising altogether and more authentic communication. The advertiser wants me to buy their product. The authentic communicator wants to help me solve my problem no matter what (if any) thing I buy. For a good introduction authentic communications read any of Joshua Porter's excellent posts touching on the Cluetrain Manifesto).
For this reason alone I think that Facebook and others that hope to capitalize on our personal information by targeting advertising based on our profiles (even if they keep the details of our information from the companies doing the advertising) are doomed in the long run.
We just won't sit still for it. We will evolve new defenses and the game will start all over again.
I agree that there are lots of reason targeted advertising isn't likely to do much better than blinky banner ads (most significantly the point you made about how we learn to ignore ads, eventually). I'm also finding that because I don't share my entirety online, it's difficult for companies to target me correctly- they;ve sent my friends who are whining in their statuses about other peoples' engagements ads for diamond rings, and so on. Oh, and girls get tons of diet ads. I get the feeling that doesn't carry over to the male population. It's a little irritating, much like the blinky banners... but I've learned to ignore it pretty well too.
Using more of your personal information to figure out which ad to show you is the advertisers way of trying to figure out what your needs are. So, I see it as better than untargeted advertising, but your personal information (that you provide to facebook, or whatever) is not perfect in predicting your needs. This is why Google is doing so well. Usually when you need something, you go and seek it out. One common thing people do, is run a general internet search. Google being the best search engine out there is the one most people use. So, search engines are in the best position to serve you ads based on your needs currently. Maybe there will be another better way, but I don't know exactly what that is yet.
I think this emphasis on targeted advertising is a short-term move for Facebook. They need revenues to pay for their expansion, and improved ad targeting is their lowest hanging fruit. They are trying, at least, to come up with a more conversational model of advertising in Pages and Beacon but they must realize that it will take them years to get that right and have the revenues scale. Beacon, or some future version of the idea, has real potential to filter advertisers messages so that my attention is not bought or sold, but earned (through mine and my friends actions). Layering razor sharp targeting on top of this pool of trusted data would not just be palatable for their users but desirable. Advertising that is perfectly relevant, timely, and trusted isn't advertising anymore: it's information.
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