Digital marketing is a vast universe of data. Every click, like, search or purchase is recorded and analysed by powerful Machine-Learning algorithms to deliver a personalised advertisement for each user. But how do those algorithms decide when and where you should see your tailored ad to make you behave in a way that a team of marketers want? The answer is simple: Through continuous testing.
Powerful Machine-Learning algorithms helped to make a leapfrog in online advertising thanks to the almost unlimited processing power of cloud computing. The digital world is overwhelmed by the ads, and users’ attention is a rare good. Therefore, in the digital industry, any way to bring additional visits or purchases to the advertiser’s site is rewarded by allocating the marketing budget among numerous marketing channels.
Developments in Artificial Intelligence and high competition in digital advertisement have led to the unprecedented scale of testing the optimal way of showing advertising content. It is a universe in which advertisers and users (consumers) communicate by expressing different reactions to the presented ads. Same as human beings, algorithms learn fastest from their own mistakes. Therefore, sometimes you may find ads shown to you pointless or irrelevant, but you should be aware that your reaction to them is evaluated, and you will influence the ads presented to other users. Surprisingly, you may have a more substantial influence on the marketing campaign than a team of experienced marketers.
Usage of browsing history or activity in social media to deliver personalised ads is perceived by some internet users as a privacy threat, but personalisation also has plenty of advantages. The main one is that a user receives information that could help them find the desired product quickly or be informed when its price is reduced. Finally, it should be remembered that you can always check why an advertising company decided to show you a particular ad or simply opt out of personalised ads.
Here is an example from Google Ads how to do it: Opt out of seeing personalised ads
References:
Personalize Marketing for Customers … or else, https://jeffreyfermin.medium.com/personalize-marketing-for-customers-or-else-ec764cdb0f7a
5 Examples Of Personalization In Social Media Marketing, https://www.socialpilot.co/blog/personalization-in-social-media-marketing
How to Use Machine Learning to Improve Your Digital Marketing, https://neilpatel.com/blog/machine-learning/
Thank you for the interesting read Marcin!
I was especially interested by the fact that even uninteresting or pointless advertising can serve a benefit to marketing departments. I personally did not think of it from a “testing” approach, but rather viewed unrelated or un-interesting ads as as a waste of time for both the company showing me the ad and I. So this is an interesting perspective! I wonder what you personally think about personalised advertising. Do you feel that the benefits and convenience of customised information clearly outweigh the privacy concerns? Will we always have to sacrifice one or the other?
– Aurora
Dear Aurora, From the customer perspective, personalised ads sometimes may seem irritating or even cause a feeling of being constantly tracked. However, from the e-commerce perspective, personalisation helped significantly improve Return On Ad Spend, a chance for small businesses with limited marketing budgets to expand their operations. Interestingly, I’ve mentioned privacy issues which are now one of the key features that will shape the future of online advertising. In my opinion, data privacy should have higher importance than ads performance. (Marcin)