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Facebook Advertising: The Targeted Shotgun Approach

Today it’s safe to say that if you are reading this blog post, you most likely have a Facebook account. If you have checked your news feed recently, you may notice an abundance of advertisements between your friends status updates and photos. In fact, think about your age group, your demographic, your friends, and your recent purchases both in store and online and you’ll probably notice that these ads seem targeted to you.

Facebook has recently been expanding its advertising efforts, giving advertisers more customizability and more reach than ever before. Television ads tend to reach mass quantities of people while Google AdSense ads are highly targeted to the search you are conducting; Facebook, on the other hand, combines the two. Facebook Advertising Strategist Brett Prescott compares Facebook advertising to a shotgun, “[and] you are firing that buckshot knowing where every splinter of that bullet is landing” (Goel). In other words, Facebook ads can target mass quantities of people.

Advertisers can target their audience by geographic location, age, gender, marital status, or any feature you make public on Facebook. The New York Times Vindu Goel mentions how ads can also be targeted based on non-Facebook activities such as web searches, online purchases, and even purchases in store. Data brokerages such as Datalogix collect customer information from email addresses, loyalty cards, and other sources to build each customer a profile that advertisers can use to further target their advertisements on Facebook (Goel). In terms of networks, these data brokers acts as large nodes connecting consumers to advertisers. That means if you tend to purchase vitamins from a pharmacy, do not be surprised if you suddenly get Facebook ads for organic fish oil and health supplements.

The Los Angeles Times reports that these targeted ads are attracting hordes of advertisers to Facebook recently, as Facebook Advertisement Revenue grows 64% in the third quarter of the current financial year. It also reports that mobile advertising revenue is a growing portion of this revenue, accounting for 66% this quarter, showing that the ability to target mass quantities of consumers on-the-go is becoming an increasingly powerful tool.

Google’s advertising bidding system works on the basis of click-through rates and price per click, and the advertiser only pays if a user clicks their link. Meanwhile, Facebook operates on a variety of objectives, ranging from the familiar click, to the page-like, to post engagements such as comments and shares. Advertisers can chose to send their customers to their own website, to their own Facebook page, or to encourage sharing the link so that their friends in their own social network will see their engagement. After choosing their advertising objective, budget constraints, desired target audience, and more, Facebook uses an automated bidding system to fill in advertising slots using advertiser quality scores along with some randomization to decide who participates and wins the auction.

As advertisers recognize the benefits of this targeted shotgun approach to advertising, expect your social and economic networks to be increasingly used to customize the ads you see everywhere.

The ad uses my name and features a shirt with my name printed on it. This shows the extent to which ads can be customized to the user. My name is blocked out in red.

The ad  on my News Feed uses my name and features a shirt with my name printed on it. This shows the extent to which ads can be customized to the user. My name is blocked out in red.

Sources:

http://www.latimes.com/business/la-fi-facebook-earnings-20141028-story.html

http://socialmouths.com/blog/2014/07/31/facebook-ad-bidding/

http://www.nytimes.com/2014/08/03/technology/how-facebook-sold-you-krill-oil.html?_r=0

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