From an economic point of view, improvements in ad-targeting technology seem as though they’re pretty obviously Pareto-optimal: Everybody benefits. Advertisers get to waste fewer of their ad dollars putting messages in front of people they don’t want to reach, publishers get to charge more money, and consumers get to see only things which are germane and relevant to them.
So why is it that many people hate ad-targeting, and hate being served targeted ads?
Part of the reason, I think, is just that targeted ads are better at getting our attention than nontargeted ads — but they’re still an unwelcome distraction from whatever it is we’re wanting to read. Most of us have become pretty good at unconsciously ignoring advertising, especially online. (Often I find myself looking hard for a big special report on a website, because it’s presented on the home page in much the same way as an ad might be, and so I ignore it, in much the same way as it’s easy to miss the big letters spelling out continent names on a world map.) Every time there’s an improvement in targeted advertising, it cuts through that wall and annoys us anew before we slowly learn to ignore it over time.
But more generally and more interestingly I wonder whether what we’re seeing here is what you might call the uncanny valley of advertising.
Every so often, we get glimpses of the holy grail of advertising: the point at which the advertising message is so perfectly crafted and targeted for the consumer that the consumer doesn’t want to ignore it at all, and prefers it to most media output. (One common slogan found in advertising circles is "every company is a media company.")
American Express has been working this seam for a while, with its custom-publishing unit. Another example is Red Bull, which produces more extreme-sport content than any dedicated TV-production company.
And of course we’re all used to traditional mass-market advertising, which is barely targeted at all: the 30-second spots in popular sitcoms, say, or the Netflix pop-up ads we have to clear out every so often to unclutter our browser windows.
The former is better than the latter — but in between things get weird. Especially when the targeting is done by keyword-recognition algorithms or cookies placed on your computer by robots that track you across the internet.
You look for a pair of socks online, and then for weeks afterwards you see ads for socks popping up in the most unlikely websites. You mention Palm Springs in an status update, and suddenly ads for weekend getaways in Palm Springs start appearing in your webmail client. Or more distressingly and creepily, after sending a difficult and highly personal e-mail to a close friend, you start seeing ads for abortion-service providers.
We all naturally anthropomorphize computers at the best of times, so it’s impossible not to feel, in these cases, that we’re being spied on, and that our most private activities are really not private at all. But I think the emphasis on privacy, in these debates, is misplaced.
It’s not like some individual human being out there knows something about me personally that I’d rather they didn’t. And a computer or an algorithm, of course, can’t really know anything at all.
But we feel spied on and invaded, because we don’t think of activities like online shopping or social networking or e-mailing as things we do in public: In fact, we would never want to do them in a very public way.
Eventually, advertisers will be able to get much smarter than they are right now, and the ad-serving algorithms will stop being dumb things based on keyword searches, and will start being able to construct a much more well-rounded idea of who we are and what kind of advertising we’re likely to be interested in. At that point, when the ads we see are targeted to us based on much more than the content of our e-mails or the goods that we shop for online, they probably won’t feel nearly as creepy or intrusive as they do now.
But for the time being, a lot of people are going to continue to get freaked out by these ads, and are going to think that the answer is greater "online privacy." I’m not really convinced that’s the problem at all.
