Targeted ads are coming to mainstream media
This year’s Super Bowl will again showcase creative mass advertising, but the key industry trend is in digital ads targeted to individuals. And it’s quickly expanding into streaming services, smart TVs and other devices, says Mike Yao, a professor of digital media at Illinois. Yao also heads the Charles H. Sandage Department of Advertising at Illinois, which will be hosting a Chicago symposium next month on the future of advertising. He discussed the implications and concerns with News Bureau social sciences editor Craig Chamberlain.
Advertising has gone through a transformation that many of us may not fully appreciate. What has changed and why?
What is changing rapidly, particularly in the last five years, is the way in which ads are delivered from the media. In the age of the ubiquitous internet and smart mobile devices, many people do not consume media content at a designated place in a predictable manner. Instead, they stream and binge programs on demand, on multiple platforms and devices, at a time and place of their choice, and do not like to be interrupted by commercial breaks.
If the rise of mass media ushered in a golden era of advertising by allowing advertisers to know in advance the type of viewer who is going to watch what, when, where and how, then today’s highly individualized and fragmented digital media experience forces them to reimagine advertising in a completely different context.
Super Bowl TV viewership in 2019, for example, was the lowest in 11 years. The 98.2 million who watched was a 5% decrease from the year before, which was a 7% decrease from the year before that. On the surface, these numbers might seem worrisome. However, according to Nielsen data, the amount of time that American adults spend interacting with media reached a staggering 11 hours per day on average in 2019, the highest in history. The decrease in Super Bowl TV viewership may be a concern for the NFL or the networks, but it’s certainly not a problem for the advertising and media industries as a whole. There is no net loss in consumer attention.
For nearly a century, advertisers had to rely on the few established mass media channels to reach large groups of targeted consumers. The power has now shifted, however, from the media – the supplier of advertising space – to the advertisers.
So what lies ahead?
In the age of digital and technology-mediated communication, the mission of advertisers is to deliver the right message, to the right individual, at the right moment, on the right platform, via the right device, in the right context, at the right scale. To accomplish this goal, advertisers must rely on advanced computing technologies and voluminous data to accurately predict what might capture an individual consumer’s attention, at a moment’s notice, based on who the person is, what they are doing, what they have done in the past, where they are at the moment – and then deliver the most relevant advertisement to that individual.
This process must also be automated by computer algorithms and artificial intelligence so that it can be performed for each individual consumer every time they visit a webpage, open a mobile app, stream a video or pass a location. This is what programmatic or computational advertising tries to do.
It was made possible by technological breakthroughs in big-data analytics, artificial intelligence and mobile computing, and its application has rapidly expanded to other platforms and devices. According to eMarketer, programmatic advertising is now the primary method of buying digital media in the U.S. Zenith recently forecasted that programmatic ad spending next year will reach $98 billion, amounting to 68% of the global digital media ad spend.
What are the mileposts to be aware of?
2020 will be a pivotal year in programmatic advertising because of a titanic shift coming in TV, from broadcast and cable to streaming. Tech giants have recently ramped up their entertainment and media businesses; major media content providers and legacy TV networks have launched their own streaming services; and cable TV and internet service providers will unveil similar products in the next few months.
Unlike with broadcast and cable TV, streaming media could allow media companies to record and track precisely who watched what, when and where across all devices and locations. This data can be combined with other types of consumer and marketing data to deliver individually targeted TV commercials in real time. The migration of programmatic advertising from online display to mainstream media is near completion.
What should be our concerns?
As noted, in order to deliver individually targeted ads in real time, advertisers need to know who the targeted person is, where they are, what they are viewing, what they are doing, and even what they are likely thinking about. The more data they can collect about a person and the environment in which they situate, the more accurately they can predict this person’s next action.
Digital computing technologies also allow advertisers to record and track granular details about the devices people carry, the apps they have on their mobile phones, how often they visit a particular website, what articles they have read in the past 24 hours, what ads they have seen, what products they bought and who they talked to on social media. In other words, total surveillance.
Previous research has shown most survey respondents reporting high levels of concern about privacy in the context of targeted advertising, but few fully understanding how it might work. As such, their concerns are based on vague and sometimes misinformed notions about personal data collection, regulations and technologies.
Another risk associated with targeted advertising is the issue of fairness and equality. In the past, an ad may appear in niche and specialized space, but it’s still visible to all. Today, an individually targeted digital ad may literally have an audience of one. How do I know whether the price I am shown in an ad is the same as the one shown to others? What if a targeted rental or job ad were specifically targeted to reach only certain individuals, but not all? Where do we draw the line between predicting what one might or might not like and manipulating what one can actually see?
Given the sums spent on advertising by political candidates, what additional concerns does all this raise in an election year?
My biggest worry is that the highly divisive political culture we are seeing today will only get worse. The information filter bubbles and opinion echo chambers created by social media have made it very difficult for voters to be exposed to truthful and objective information during the last few election cycles. Although voters today get political information from different media outlets based on their own political views, at least they have the choice to switch channels from time to time and get a sense what the other side is seeing. I worry that they soon may not even get this choice if every piece of media content delivered to each individual is targeted.
—Craig Chamberlain, Social Sciences Editor, University of Illinois News Bureau