Friday, June 18, 2010

Digital ads might not work if to targeted

Ads targeted at a particular context -- home improvement ads on interior decoration sites, for example -- are a staple of online advertising. It's presumed that the more closely an ad matches a person's interest, the more likely that person is to to click and buy. And yes, the bigger the better.

Avi Goldfarb and Catherine Tucker published a recent academic study that indicates that may not always be the case. The abstract reads:

"We use data from a large-scale field experiment to explore what influences the
effectiveness of online advertising. We find that matching an ad to website content and increasing an ad’s obtrusiveness independently increase purchase intent. However, in combination these two strategies are ineffective. Ads that match both website content and are obtrusive do worse at increasing purchase intent than ads that do only one or the other. This failure appears to be related to privacy concerns:The negative effect of combining targeting with obtrusiveness is strongest for people who refuse to give their income, and for categories where privacy matters most. Our results suggest a possible explanation for the growing bifurcation in internet advertising between highly targeted plain text ads and more visually striking but less targeted ads."

Read the full study here.o