Advertising in the age of Facebook

We still have newspapers in India today although it is a dying breed in the several parts of the world where on-line news consumed through mobile devices has become the preferred way to update oneself of developments in the world.  And it is only a matter of time before the same phenomenon catches up in India too. One way of looking at this transition to the on-line world is to view it as a natural consequence to the networking of computers, the emergence of the Internet and the rise of the mobile device – that is, looking at this change as a change in media and in presentation format rather than anything else. True, the browser, and the rise of HTML make for a glitzy and breath taking user interface that allows streaming multi-media to transform your world. You no longer read the news alone – you also see it in still photos, watch it in HD motion, hear it and interact with it. True, our world and our habits stand transformed forever.

But there is a difference about the way that news is distributed to the reader (viewer or listener) that is often unnoticed and mostly ignored.  The Internet, like the newspaper and the TV and other mass media are broadcast mediums. They allow news generated at one point to be broadcast and delivered to entire populations who may happen upon the printed or the on-line page or be watching the the television screen at the right time. Advertisers love this because it presents an opportunity to direct an advertising message to a very wide swath of humanity in one single instance. How else can you reach so many people at the same time with the same message?

However, intrinsic to this method of advertising was the awareness that a large number of people who read or saw the advertisement would take no action on it at all, simply because it was an inappropriate message.  For example, how important would a TV commercial for a fast bike be to an aging grandmother? Or what are the chances that struggling youth would be fascinated by the qualities of a pension product? So it is, that in the advertising world, it is with a shrug of inevitability that advertisers accept the small yields (the number of people who respond to their advertising) that their ads return. They try to determine the demographic of the population that is likely to see their advertisement through proxies like classification of the audience for that medium’s content (who is likely to  watch Star Movies?), the time of day it is broadcast (who is likely to be watching TV at 2pm in the afternoon?), ratings (how many people below 35 buy the Times of India?), etc.  This heightens the advertiser’s chances of reaching the right audience, but it is not perfect.

This used to be true for the on-line world too. One advertised on Rediff.com simply because it was the most popular Indian portal once upon a time. You advertised on the Hindu on-line because you wanted to reach out to non-resident South Indians living in the Gulf and South-East Asia. But it was a generalization, nevertheless, that relied on the presence of a dominant demographic for every website.

Then the cookie-era dawned on the Internet and browsers began saving information about what you did, or searched for, or purchased from a particular website. This information was saved on your computer with the intent that when you visited the website again, the software would recognize you and be able to offer you superior services by knowing about your preferences.  That is why your will notice that the more you visit a website, you begin to get the feeling the website already knows you and is able to read your mind. Take Amazon’s preference engine for example that generates lists of books that you may like to read. Sometimes, it is uncanny how closely they resemble the books you really care about and wish to buy.

This is all very well for the customer because he or she is being better served now by virtue of being recognized. This technology had the advertisers drooling, because such intimate knowledge of the customer is what they had always wanted. How could this information be used to target customers more precisely?

Re-targeting is a term used in on-line advertising to describe how user preferences that were exhibited when they visit a website are used to target them again for new advertisements based on this awareness of their preferences. It is accomplished by technology that goes by the arcane term ‘pixel integration’.  A single pixel (invisible to the human eye) that is embedded on independent sites (say, a news portal) allows the information that resides in user cookies on their computers to become available to advertisers. So, in one blinding instant, your behavior at a retailer’s on-line store becomes fodder for an advertiser. If you had turned back at the last instant without making that purchase of an airline ticket to Goa, you might find yourself magically barraged by advertisements for air-tickets to Goa, everywhere you go on-line. And if you did make that purchase, those advertisements might change to what you can do or buy in Goa. Magical, yes. Appropriate and useful, yes. Ethical, I am not so sure.

I do not want to turn this post into a technology discussion on on-line advertising. And so, here is the bottom line. Unlike other broadcast mediums of the past, the Internet now has this amazingly powerful means to train a laser on you and to track your movements on-line. This allows advertisers to use very personal information to advertise to you. So, despite it being a broadcast medium, advertisers can use the same medium to advertise different things to different people – the pension product to the aging executive and sporty bikes for the young and rich – simultaneously. In this age of Facebook, where users share more personal information than ever before, on-line, the advertiser finally has that deep knowledge about you and the magical power to target their advertising exactly where they want it. No more, the hit and miss advertising of the past.

It is almost like that famous picture of Uncle Sam (the US government) with top-hat and cane, pointing at you. Only this time, it is the advertiser who is doing the pointing. And there is nowhere to hide!

 

 

 

About Vijaya Raghavan

Vijaya Raghavan has been a part of the technology industry in India for the last 25 years. He was part of the initial teams at Texas Instruments and IBM India and has worked on CAD systems for VLSI Engineering and on applications for Windows, OS/2 and Unix. In a management capacity, he has built and led engineering teams working on object-relational systems, text search, e-commerce systems, network security and various other Internet applications. He is the co-author of an engineering patent in network analysis. His corporate career apart, he has been an entrepreneur in Internet retail in which he successfully built and ran an online book-store for some time. He now consults on new technologies and as an out-sourced CTO to corporations that require advice in the acquisition and management of new capabilities.
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2 Responses to Advertising in the age of Facebook

  1. Sujith Philip says:

    Good analysis :)

  2. Sumith Satheesan says:

    I do presentations on Internet Security, and usually give example of GOOGLE using cookies to learn your trend and accordingly give you advertisements on your subsequent Search. Nice to see the whole thing explained in such a great detail and in the right context.
    I use this example to explain how Google uses it for giving good surfing experience, and how such Surfing Trend of an entire network can be misused for User targeted hac
    ks.

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