In Perspective: Diminishing returns
I’m not going to say that targeted/personalized advertising is pointless, but I am wondering if the results will be worth the investment.
Consider recommendation engines. They can be made to work well, but they cannot be improved past a certain point for reasons that have nothing to do with the recommendation process.
I’ve seen almost all the big science fiction blockbusters. I’ve navigated my own way through a lot of the second-tier stuff, and using automated recommendations I’ve found a handful of things I otherwise might not have known to look for, and a much (much) smaller handful of things I didn’t know existed.
Repeat with “thrillers” and “action” and “horror.” After that, every time any viewer goes back to the well, there’s only so much left to suggest. No matter how sophisticated your slice-and-dice process, ultimately you’re left with 50 paths to “Surf Nazis Must Die.” The process works, but only to a point.
Personalized advertising is all about recommendations of what any given consumer is going to want to see. Nobody wants apartment dwellers to live through ads for aluminum siding or lawnmowers. But there are only so many advertisers, selling only so many different products. And on the viewers’ side, no matter how relevant any given ad is, there is only so much of any given product than any one consumer can buy.
Oh, but if someone buys a car, you know they might want to buy a separate sound system! Send ads for car stereos. Okay, now the car buyer bought a car stereo. Now what? You can only go so far with that sort of thing before hitting a wall.
Viewers say they want more relevant ads. Advertisers say they want more relevant ads. Here’s the thing about people: they say they want something, and then when they get it? They realize they didn’t want it that much after all. Each consumer is going to end up overwhelmed by a small handful of advertisers. Advertisers are going to love being able to definitively link an ad to a sale, but there’s only so much you can increase sales with targeted ads; individuals are not going buy more Palmolive / F-150 trucks / Cheetos / Ginsu knives than they need.
The only way to increase sales after that is through – can you believe it? – non-personalized, shotgun advertising.