Are Targeted Ads and Facebook controlling where we spend our money?

I find the concept of socialommerce interesting.  I think we all know when we’re on a website that they can track what we’re doing, such as where we’re clicking and how long we’re on each page.  In my last job at an order management software company I saw these concepts a lot.  In addition to providing a software to help businesses manage their orders, the company also hosted websites.  I learned a lot about e-marketing tools because of this.  Let’s say you go online shopping and you leave the site quickly without putting any items in your cart.  If you entered your email address anywhere or were logged into an account on that site, they can tell you were there and didn’t buy.  The company can send a special coupon to use to attract your attention back to the site.  But let’s say you went online shopping and abandoned your cart.  You can get an email with a different offer that is specific to the item you left behind.  Businesses will also send surveys for feedback from their customers, and most will offer a coupon to thank you for your time and opinion.  The example below is from New York and Company.

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Businesses have so much visibility they no longer should be offering blanket offers because not every coupon or deal is going to influence everyone to buy.  Even in this rough economy, people will spend money when they feel they’re getting a good value.  I did some quick searching and found a study from The Network Advertising Initiative that stated targeted advertising increased revenue 2.7 times as much as non-targeted ads.  Also, it is twice as effective at converting users who click on the ads into buyers.  People will also be more likely to spend money on things their friends give positive reviews on and companies that have a good reputation.  I do agree that we’re at a point where products and special deals find us.  Over the summer I was looking to buy a car.  After my first couple of Google searches and visits to different sites, car ads were all over my Facebook page.  I didn’t like these ads because I knew what I was looking for and what I wanted to test drive.  After I purchased a car the ads were still on my page for weeks.  This makes me wonder how individual specific advertising can be productive for things that the advertiser can’t tell I am no longer in the market for.  Being I already bought a car, continuing the ads for me are useless.  That space could be used to advertise something I might actually spend money on, like the ad on my Facebook page today that’s below.  Birchbox sounds pretty cool, anyone try it?  I have to love asking for feedback on my blog post that talks about how we use social media to see if something is worth investing in!

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Facebook can definitely influence purchases.  This morning one of my friends posted she had a waffle and instantly that’s what I wanted.  I actually did go out to the diner to get one!  Our statuses also allow us to network.  Friends of mine are getting married and posted on their Facebook status that they’re looking for a photographer.  There were many comments that provided names and links to example work done by the photographers.  In this case Facebook did the research for them and instead of finding a photographer, a photographer kind of came to them.

I was surprised to read that there is so much tracking on DVRs.  I don’t know why this shocked me because everything is tracked these days, so why wouldn’t my cable company track what I fast forward and what I’m watching and when?  I wonder how they use this data.  I’d assume some of this has to be used to determine the popularity of a TV show.  As a rule, I DVR everything and watch it later so I can skip the commercials.  In the reading this week Hulu and their limited commercials are mentioned.  The reading states that these 2 minute commercials are more productive than a longer commercial break because people will sit there and pay attention for those two minutes.  When a commercial break is longer people get up and do things or fast forward through them.  I know many people that are getting rid of their cable and just watching TV online.  I wonder how we’ll see either Internet plans or sites change to support this.  It makes me think of cell phones and how wireless plans have changed to accommodate a lot of people no longer keeping a landline.

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Posted on October 20, 2013, in Social Media, Society, Trust. Bookmark the permalink. 10 Comments.

  1. evelynmartens13

    Hi Christine:

    I didn’t realize what you explained about online shopping. I guess I knew that companies can track you if you leave your email, but I didn’t realize I leave a “footprint” even if I leave no identifying information about how to find me and target advertising. Guess I was being naive. I also found that information about DVR’s a little disconcerting, but, on the other hand, if it helps people make programming decisions that I will enjoy, I guess that’s a good thing… I do believe that the Nielson ratings will be obsolete very soon!

    Enjoed your cartoon!

  2. I remember the first few times I used Hulu. I didn’t have cable at the time but loved all of those TV shows on HGTV like “House Hunters.” And there were endless episodes of “House Hunters” on Hulu which made me giddy with joy. Dove was a big sponsor at the time and they used the beginning, middle and end scheme for showing the ads. I don’t think they offered the option at the time to watch all the commercials at one time, but I wish they had. Even though the ads were very short, I got so tired of watching the same Dove commercials over and over again. Why wouldn’t they show different ads from episode to episode? I suppose they didn’t have many sponsors in the beginning and had to go with the few they had available. It makes me actually appreciate product placement in movies, even if it is cheesy. If they didn’t do that, they’d probably start interjecting ads. Oh, wait. They show them before the movie. Isn’t the average time for ads/previews at the movies 15-20 minutes? We can’t get away from them!

    • The repetitive ads used to drive me crazy too! I get that they have brief advertisements, but at least show me a different one instead of repeating the same one. That type of advertising makes me want to boycott the product being advertised because they’ve annoyed me.

      I don’t really go to the movies unless it’s a move I’m super excited about. I can’t handle paying so much on the movie ticket and snacks and still getting bothered by the previews/ads and normally someone in the audience that doesn’t understand how to be quiet and watch the movie. I’d rather wait and watch it in my own home with popcorn that didn’t cost me $10.

  3. evelynmartens13

    I just had to come back and tell Christine this anecdte. In my post, I discussed Hulu and visited the webist to get some info for my post. Now, “out of the blue” (not), I have Hulu pop-up ads showing up every time I open a screen to the internet…

    • It’s really crazy how much information there is about you in the online world, even if you don’t sign up for things. The tracking tools are intense. I wouldn’t have thought it either and it was an eye opening experience to me to find all of that out. In a way it was cool to know, I feel like I have inside information 🙂 but it’s also scary to see how much information is recorded about us.

      This hulu example is a perfect one! Now that you’re thinking about the ads that are presented to you, you’ll notice they’re tailored to what you’re doing online.

      I agree that Nielson ratings may become obsolete. Why poll only the people that have the Nielson boxes when they can use the habits of all the people that own DVRs.

  4. I thought the information about Hulu was interesting too. I do think that the amount of commercials have been creeping up over the years, although they are nowhere near as bad as regular television commercials. I am one of those people who don’t have cable. I haven’t had cable for probably seven years and primarily watch television on Hulu, although I do have an antenna as well (I know, it is a little sad). But because of this, whenever I have the wondrous opportunity to watch real TV, I am just appalled by how much time is wasted on commercials. Hulu is an excellent alternative, especially since you can reject commercials that don’t apply to you (or that you just hate because you have seen them 42 times in a row). I think that is really an improvement in marketing. I do get up and ignore my Hulu commercials, but certainly not to the extent of regular commercial breaks, Qualman is right that having fewer actually improves the chance of the audience actually watching them.

  5. I knew all of this tracking existed but as we sit here and talk about it in a condensed format, it is really kind of scary! I feel as though I have given up on ever having true privacy anymore but I do find myself backing off considerably on what I post to social media in the hopes of keeping some part of my life to myself!

  6. I wasn’t aware of the targeted advertisements and coupons from sites, but that might be enough to motivate me to log in or create a profile on some of my favorite sites. I tend to do a lot of comparison shopping, so this would give me an opportunity to try to save a little additional money. Now I’m wondering which sites utilize the targeted coupons, and if they are any that I shop from.
    I get a kick out of the ads that appear based on cookies. My wife and I share a computer, so it allows us a little insight into each other’s browsing history.

    • You have to love the shared things between married couples. Two of my friends laugh over their Netflix recommended queue because they share an account so the recommendations are all over the place! I think it’s a great idea that now Netflix has created different personas now for the people that do share an account so that they can get recommendations based on their activity.

      After I wrote this post I got a perfect example of targeted advertising. I have two email addresses and I guess I’d placed an order on Wolferman’s site (a company that sells things like muffins for gifts) with both of them. One email address got a coupon that was better than the than the other. I laughed when I saw this because it’s exactly what we’re talking about with companies using your information to offer you different things to entice you to shop.

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