Targeted Ads

Have you ever been online and seen an ad that seems a little familiar? Maybe you were shopping for shoes, and you later saw a DSW ad. Or maybe you googled “baseball hat” and continued seeing ads for Dick’s Sporting Goods.

You might have noticed the the banner at the top of this ad that says “Ad Choice.” Companies are notorious for picking up on consumer habits and tailoring ads to their preferences.

But have you considered how these ads affects us? Or if they even work?

image source: ipdigit.eu

An article titled “Targeted Ads Don’t Just Make You More Likely to Buy- They Can Change How You Think About Yourself” published by the Harvard Business Review examines the effects of targeted ads on consumers. The article found that ads that relate to an individual could influence the way they perceive themselves. “This targeting may change how consumers see themselves and make them feel like they already have traits implied by the ads. This suggests that brands with strong personalities might particularly benefit from behavioral targeting” (“Targeted Ads”). For example, if a consumer noticed a more sophisticated targeted ad, that individual may feel more sophisticated and might be willing to purchase more expensive, sophisticated goods after seeing that ad (“Targeted Ads”). By focusing the psyche of the consumer, companies are able to change consumers’ ideas of themselves and gain profits.

However, there are some downsides to targeted ads.

For one, it’s more expensive to track consumer preferences. Plus, there's the chance that the ad won't even relate to an individual. The Harvard Business Review mentions that “James Douglas, executive director of social-media agency Society, said case studies show that companies can receive a bigger sales increase if they reach a more significant portion of a platform’s overall audience” (“Targeted Ads”). With that being said, it doesn't make much sense to me that companies still use targeted ads when broader ads seem to appeal to a greater audience.
Personally, I don't really feel like targeted ads relate to goods or brands I'm interested in. There may be some psychology behind them, but overall I'd say there's not really that much of a difference between an advertisement with an "Ad Choice"banner and one without one.