Thursday, February 10, 2011

I see bubbles

We're humans, by nature short-termist and usually not capable of learning from history.

There was a time when advertising was a blanket phenomenon - you broadcast your message on television, the radio or in print media and hoped that it was seen by as many people as possible. If they were people who had an interest in you message, so much the better.

Then along came direct marketing as a way of showing your message only to those who might be interested. Inevitably, through various shortcomings including poor data quality, it wasn't long before direct marketing got a bad reputation - "junk mail" and so on.

And now we have the Internet. Yet, despite its opportunities, we seem to have regressed back to the blanket coverage approach prominent before direct marketing.

When somebody hits your page they tell you a remarkable amount about themselves: where they are, the language of their browser and operating system, how they reached your page and so on. Unless their system is infected with a virus, you shouldn't know any more amount them as individuals. But what is also known is the contents of the page being viewed and where it is hosted.

How is this information being used by the Internet advertising giants? In a non-scientific but pretty revealing study, I analysed over a period of some weeks those advertisements being shown on the various pages that I visited. What I found was:

- 35.6% of advertisements were in the language of the website and suitable for somebody living in the country where the site was being hosted, but not for me. Adverts for German school reunion sites or the American Girl Guides association are just not correctly targetted.

- 38.8% were in Dutch (the language of the country in which I reside, though not the language of my browser or operating system) and were aimed in the same scatter gun way as broadcast adverts are - adverts for holidays, electricity companies and so on.

- 19.4% were those deliberately misleading or downright criminal adverts asking you to count how many bouncing balls you see, or informing you that you are today's lucky 1 millionth visitor. If I won prizes on each of these clicks I'd have a GDP larger than China's.

- Shockingly, as least to me, only 4.4% were relevant to the contents of the website being viewed - baby clothing adverts on baby name sites, for example. Almost as many were the antithesis of what should have been shown - adverts for Thai brides by post sites on a site listing baby names is putting carts before horses!

- 0%: the percentage of advertisements I was tempted to click on.

And then the language of the adverts:

- 49.6% were in Dutch
- 44% were in the language of the website
- 4.7% were in English (on non-English language sites)
- 1.6% were in the language of the country where the site was hosted.

If nobody clicks on the adverts then no payment need be made, so companies and criminals don't feel bound to think of the consequences of the current scatter gun approach. Short-term thinking. It does, though, have negative consequences. In the hope of getting enough click throughs to get a decent return, many webmasters are placing so much advertising on their sites that it has become difficult to locate the content. And we, the users, are becoming less and less inclined to look at, let alone click, on the adverts.


So much for the web. But how about social communities where people have provided information and where even the simplest of data mining techniques could improve the relevance of advertising? How about that doyenne of the Internet: Facebook?

I am very careful and specific in my use of Facebook, which makes my profile a good test of their targetted advertising. They know my age, gender, the university I went to, that I speak English, Dutch and French (in that order) and that I and 95% of my "friends" play squash, and that almost every communication I have on that site is about squash.

That being the case I would expect Facebook to show me adverts in English, possible for sports equipment or similar. What I actually get:

- 71.4% of adverts in Dutch - they're looking again at my location, not my profile
- 26.8% in English
- 1.8% in German (eh? Did I say I speak German?? I don't.)
- 0% in French

- 0% relevant advertisements
- 100% irrelevant advertisements.

It is no surprise that Facebook ad performance is abysmal.

How many billions was Facebook deemed to be worth?

Are they mad?

I see bubbles.

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