With mobile advertising becoming the norm – and growing at over 150% a year, all seems happy in the world of windswept, personalized, sticky messaging. There is, however, a great deal riding on the success of targeted advertising. Facebook’s IPO valuation relies almost exclusively on their sponsored stories approach to advertising, which means that we are about to put a bet of $100 billion on Facebook getting it right. In the documents that a company has to file before it can go through the IPO process, is one that asks for a list of things that could kill your business. Facebook said the whole thing would die if they didn’t get the advertising and/or its community left.
The risk is big because we are still experimenting and we do not know what human beings will want or put up with. We are fickle. Pundits ponder daily on whether display ads are alive or dead, and the same goes for ‘pay per click’ models.
Take this example.
In the normal course of events, someone whose life is focused on one thing, say horse riding and horse care, discovers that she will need to buy a couple of party dresses for a series of one-off events. Her on-line research goes from horse feed to long black dresses. Having done the research and gone back to the horse feed research, she is now followed through her regular sites by adverts for dresses. This is not only spooky and irritating it is also completely irrelevant to her.
The problem, of course, is that the engine that picked up the research into dresses, said ‘Ah, a likely customer’ and sold the opportunity. It did not, could not, say ‘Hmm, probably a ‘one-off’, let’s try a dress ad, or shoe ad in a week’s time and if it is ignored, we’ll go back to special offers on horse feed, which she doesn’t even notice we put in front of her any more’.
The line between delight and despair, love and hate is a very thin one. Facebook and the advertising industry needs to get this one right.