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Do Micro-Targeted Online Ads Work?

subprime attention crisis coverA lot of digital advertising is based on the idea that firms like Google and Facebook have data that allows them to microtarget advertising. These two companies now dominate advertising media. But do they really work? On the one hand, you might expect that advertisers can (and should) be tracking the success of their online advertising. Unlike John Wanamaker, a retailing pioneer who is supposed to have said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” today’s marketing managers are supposed to know what works and what doesn’t. They can see which ads bring click-throughs that result in sales. They can track those new customers over time and see if they continue to buy and how profitable they are. In theory.

In a new book, Subprime Attention Crisis, former Google employee Tim Hwang argues that theory is overblown. I have not yet read the book — it is on my Amazon wish list. That said, I did read a pretty good review of the book in Wired, “Ad Tech Could Be the Next Tech Bubble” (October 5, 2020). There I read, that Hwang’s book makes the case that “Microtargeting is far less accurate, and far less persuasive, than it is made out to be…” Most ads are never seen because of ad blockers or poor placement. Many are only clicked on by ad fraud.

I do need to read the book. As noted above, advertisers should be tracking this stuff themselves. But it does give me reason to pause.

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