The Problem With Targeting

In Chapter 3 of my book, I wrote:

Last but not least, there is the unspeakable truth in an era in which we have come to idolise Social Media: the New Yorker was much more of a real Social Network and of a Community than Facebook or Twitter ever were or ever will be! The New Yorker was, as Steve Harrison put it, “both an extension of the individual and a place of communion to which they came for their shared experience”.

I closed the Chapter by asking:

Could the fact that we’re missing a common shared vision of the world like the one we had as readers of the NY Times or of The New Yorker be detrimental not only to the fate of our democracies, but to advertising as well?

While looking for a possible answer, I came across an article that goes against the conventional wisdom: not Half of my advertising is wasted, but I don’t know which half, as Wanamaker loved to quip; but rather: The Waste in Advertising Is the Part That Works.

Just like elaborate deer’s antlers or long peacock tails in the animal world (see: The Handicap Principle), lavish, even extravagant ad spending on the part of a company may signal a high-quality, successful brand that is confident consumers will try and buy their quality products over and over again so that they will be able to recoup their investment.

On the other hand, the argument goes, advertising on the web makes it possible for any small company to buy ads and act as if they were a big, confident and successful company.

Do I agree? Only in part: I look at a number of clues in order to make a guess about quality and reliability, and I think lavish ad spending could just as well signal an ego problem, a miscalculation or an attempt to brainwash consumers, for example to sell them products “unsafe at any speed”. Or that a company is selling crap at a premium price and can afford to continue advertising it. Soda, anyone? Or junk food? No, thank you.

Don Marti: The Problem With Targeting

However, I found a second and related argument much more interesting: on the web, low ad prices and targeting have made it unnecessary for a company to have to show their true colours and their confidence in their products to all their potential customers.

Or, as Richard Stacey put it:

The issue with targeting is that after a while, you narrow things down to the point where you stop having a group large enough to constitute an audience and end up with a group of individuals.

With enough slicing and dicing, a company can save money, but could risk ending up looking like the dishonest politician who crafts different speeches for different audiences, to the point that, as Don Marti explains, a consumer could think that:

With good enough targeting, you could be the one poor loser who they’re trying to stick with the last obsolete unit in the warehouse.

Apparently, consumers somehow understand this; they dislike tracking and targeting and dislike it even more the more they understand how it works. And there is no doubt: adoption of ad blocking and tracking protection tools is going and will go up.

So, the very fact that print ads are less targetable, force companies to speak to the whole audience and in doing so help them being perceived as trustworthy instead of sneaky is one of the reasons why ads in newspapers and magazines are more effective than ads on the web and can command a much higher price. I like this counter-intuitive theory a lot.

Plug for my Book

To find out about other ways in which companies are compromising their brands, wasting their marketing money and making fools of themselves, and to try to find an antidote to all this madness, check out: What Happened To Advertising? What Would Gossage Do?

12 Responses

    • Massimo 3 July, 2015 / 07:56

      Thanks for the link. Not sure I understand how he gets his 8% number.

      And the IAB is not the Internet Advertising Bureau, but the Interactive Advertising Bureau. Even though close to nobody “interacts” with any of the ads.

  1. Armando 2 July, 2015 / 11:55

    Scusa, ma sono abituato a leggere i documenti del Fondo Monetario Internazionale, che anche uno stupido capirebbe (infatti sono scritti da cretini, o da persone che si fingono tali).
    Mi sfugge il ragionamento generale.
    Capisco il discorso sui soldi buttati,meno come mai le aziende comprometterebbero il loro brand.

    • Massimo 3 July, 2015 / 07:28

      Che comprometterebbero il loro brand lo intuisci da questo post? Dove? E’ una cosa in cui credo fortemente, ma non mi pare di leggerlo in questo post, neppure fra le righe.

      Secondo me comprometti il tuo brand quando fai uscire le tue pubblicità con il tuo brand o su siti di pessima qualità, oppure anche su siti di buona qualità, ma o con formati estremamente aggressivi, o anche solo “mischiato” ad altri inserzionisti di pessima qualità. Per fare un esempio: se sei BMW, non vuoi o non dovresti volere, secondo me:

      – né pubblicità su un sito di gente che fa o fa finta di fare scoregge sedendosi di fianco a sconosciuti al parco (sì, sì, credimi: esistono sicuramente siti del genere).

      – né pubblicità che si gonfiano, espandono, prendono tutto lo schermo, rendono difficile o impossibile l’uso normale del sito che sto visitando e attirano bestemmie.

      – né pubblicità anche normali come formato e su siti di qualità, se questi siti ospitano anche pubblicità non di qualità o di aziende non di qualità o di servizi borderline.

      Il che vuol dire che gli unici posti in cui farei pubblicità io sono: Adwords, e poi un po’ di pubblicità sul sito blu che ha recintato il web (Facebook), magari per spingere qualche (raro) contenuto, post o video, di qualità; oppure per fare un po’ di retargeting. E basta.

      • Armando 4 July, 2015 / 21:41

        Era implicito nel rimando al libro: “To find out about other ways in which companies are compromising their brands”.
        Comunque, credo che le aziende siano in grado di farsi del male molto più efficacemente in altri modi che attraverso la comunicazione. Anzi, direi che la comunicazione è una branca del marketing quasi innocua.

  2. Armando 5 July, 2015 / 09:39

    Posso chiedere ospitalità e pubblicare questo pezzo? I visitatori potranno continuare a esercitare il loro inglese e impareranno qualcosa di interessante:
    The IMF Debt Sustainability Analysis report on Greece that came out this week has caused a big stir. We now know that the Fund’s analysts confirm what Syriza has been saying ever since they came to power 5 months ago: Greece needs debt relief, lots of it, and fast.
    We also know that Europe tried to silence the report. But what’s most interesting is that this has been going on for months, as per Reuters. Ergo, the IMF has known about the -preliminary- analysis for months, and kept silent, while at the same time ‘negotiating’ with Greece on austerity and bailouts.
    And if you dig a bit deeper still, there’s no avoiding the fact that the IMF hasn’t merely known this for months, it’s known it for years. The Greek Parliamentary Debt Committee reported three weeks ago that it has in its possession an IMF document from 2010(!) that confirms the Fund knew even at that point in time.
    That is to say, it already knew back then that the bailout executed in 2010 would push Greece even further into debt. Which is the exact opposite of what the bailout was supposed to do.
    The 2010 bailout was the one that allowed private French, Dutch and German banks to transfer their liabilities to the Greek public sector, and indirectly to the entire eurozone‘s public sector. There was no debt restructuring in that deal.
    Reuters yesterday reported that “Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and [the IMF] that has been simmering behind closed doors for months.
    But that’s not the whole story. Evidently, there was a major dispute inside the IMF as well. The decision to release the report was apparently taken without even a vote, because it was obvious the Fund’s board members wanted the release. The US played a substantial role in that decision. Why the timing? Hard to tell.
    The big question that arises from this is: what has been Christine Lagarde’s role in this charade? If she has been instrumental is keeping the analysis under wraps, she has done the IMF a lot of reputational damage, and it’s getting hard to see how she could possibly stay on as IMF chief. She has seen to it that the Fund has lost an immense amount of trust in the world. And without trust, the IMF is useless.
    And while we’re at it, ECB chief Mario Draghi, who is also a major Troika negotiator, made a huge mistake this week in -all but- shutting down the Greek banking system, a decision that remains hard to believe to this day. The function of a central bank is to make sure banks are liquid, not to consciously and willingly strangle them.
    How Draghi, after this, could stay on as ECB head is as hard to see as it is to do that for Lagarde’s position. And we should also question the actions and motives of people like Jean-Claude Juncker and Jeroen Dijsselbloem.
    They must also have known about the IMF’s assessment, and still have insisted there be no debt relief on the negotiating table, although the analysis says there cannot be a viable deal without it.
    One can only imagine Varoufakis’ frustration at finding the door shut in his face every single time he has brought up the subject. Because you don’t really need an IMF analysis to see what’s obvious.
    Which is exactly why there is a referendum tomorrow: Alexis Tsipras refused to sign a deal that did not include debt restructuring. It would be comedy if it weren’t so tragic, most of all for the people of Greece.

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