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Why do contextual ads fail?

Mike Elgan | Oct. 7, 2014
Companies like Google, Facebook and Amazon violate our privacy in order to show us relevant ads. So why do their ads miss the mark?

The real problem with this scenario is that is we're paying for contextual ads and content with our personal data, but we're not getting what we pay for.

That's true of most supposedly contextual advertising. And it's true of most personalized content.

I crowdsourced some questions about contextual advertising and contextual content on Google+. It was an unscientific survey, of course. But several strong consensuses formed that perfectly matched my own observations.

The strongest consensus was that Facebook advertising is off target and almost completely irrelevant.

The question is: Why? Facebook has a database of our explicitly stated interests, which many users fill out voluntarily. Facebook sees what we post about. It knows who we interact with. It counts our likes, monitors our comments and even follows us around the Web. Yet, while the degree of personal data collection is extreme, the advertising seems totally random.

What is Facebook doing with all that personal data?

When I go to Facebook, I never see an ad that demonstrates the company's intimate knowledge of me and what products I might want to buy.

Google search sometimes gets it right, as do a few other Google services. But those experiences are rare. More often, the ads miss the mark. When I go to YouTube, I see ads for cars (which I'm not in the market for and have no interest in). Google's privacy policy lets it take what it learns about me via one Google product and use that information to serve up ads on another Google venue.

Advertising on Google Search and in Google Ads on Amazon and other websites mostly seems to promote things that I've looked at or already purchased. For example, if I buy a wallet, I see hundreds of ads for wallets for months afterward -- the one thing I definitely don't need.

But seeing that I was shopping for a wallet, then serving up ads based on that behavior is hardly sophisticated contextual advertising. Where does the endless list of personal data and signals go? Google and Amazon both know what I read, what TV and movies I like, where I live, how old I am, my gender, my interests, my professional interactions, and so much more. What are they doing with that information? It's clearly not doing me any good on the advertising front.

And it's not just advertising, but content, too. Google and Facebook algorithmically filter what you see in your Circle Streams or News Feed, respectively. They show you some of what your family and friends post, but not all of it. We're supposed to trust their algorithms to show us what we want, based on our personal data and activity. Yet in both cases, they fail miserably.


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