Targeted Ads: the Pros and Cons of Using it for Your Business

Targeted ads, also known as behavioral marketing, are a controversial new trend in pay per click advertising.  As is usual with outbound marketing techniques, this technique is controversial with consumers.

In a recent study by Pew Research as a part of their Internet and American Life survey, researchers discovered 68% of consumers polled viewed these ads negatively, compared to 28% who stated they were ok with the advertisements.  Within these groups, the older an American and the more money he or she makes, the less ok that person is with targeted ads.  In contrast, the younger generation 18-29 approves of these ads at a rate of 59%.

Dependent upon your target customer, the target demographic, age group, and income level, targeted ads could make less sense or it could make more sense.

The Positives Associated With Targeted Ads

According to a 2009 Network Advertising Initiative study, targeted ads made increased sense for advertisers for a number of reasons:

  • Targeted ads received 2.7 times more revenue than generic network ads
  • Pay per click targeted campaigns cost 13 cents per click instead of 72 cents.
  • Twice as many users converted into buyers with targeted ads.
  • Brand related searches cost $1.69 for targeted ads and $15.65 per search for wider ad placement.
  • Targeted ads allow businesses to eliminate “wasted” advertisers to consumers outside of their targeted user.
  • Businesses can better determine user purchase drivers and purchase preferences instead of relying upon generic purchase trends among wide groups of people.  Therefore, the user is treated more as an individual.
  • Your firm may determine that the customers seeking your business are not the ones your firm is seeking out.  This valuable information can be used to expand your marketing efforts to reach this key customer.

The Cons Associated With Targeted Ads

In comparison to the budget friendly benefits associated with targeted ads, the following cons may outweigh the benefits, depending on your business’ values:

  • You may alienate customers who do not wish to receive ad reminders that they once entered a query that could have been potentially embarrassing for them.
  • Customers may believe your firm does not value their privacy rights.
  • You may inspire users (as high as 76% of Pew’s respondents) to clear their browsing history or opt into privacy settings, decreasing your potential target audience.
  •  Customers fear they will be stuck in a filter bubble and lose access to relevant content.

The Basics

Personalization and the targeting of ads is a decision every company is going to want to make for themselves.  Dependent upon your core goods and services, it may or may not be appropriate to use this technique.  But for law firms trying to find an audience, this could be a cost effective way to expand marketing efforts.  While some customers will detest it, and they probably always will detest advertising, this appears to be an opportunity you can’t miss.