Cookies, the tiny bits of data sent from a website and stored in a user’s web browser is at the core of the digital advertisement industry.
The way it works is this: Every time you visit a website, your web-browser sends the cookie information back to the server, notifying them of your browsing patterns. This information is then used by advertising networks connected to the website to display targeted advertisements to you.
Facebook ads created by cookies
Next time you are on CNN.com and see an advertisement for the latest Acura MDX, don’t be surprised. It’s because earlier in the day you may have been searching on Google for luxury cars and clicked on an Acura Website.
Once on that website, your Web browsing pattern was transmitted to the Publisher (CNN in this case) via your cookies. And that’s what resulted in the ad!
Over the last few months, privacy concerns have become a hot topic everywhere, from the boardroom to the living room. Nearly a fourth (22.7%) of people have blocked cookies on their browsers.
Additionally, the explosive growth of Mobile devices has adversely affected the viability of cookies, since there are no third-party cookies on mobile devices.
And according to reports, both Google and Microsoft are currently working their own alternative solutions, which could span multiple devices and would not need a third-party cookie to target ads.
Brands are getting in on the act too
I recently read that Internet radio company Pandora started mining customer data to better target ads as a replacement to using cookie.
Pandora began analyzing their own database of registered users to identify audience segments for their advertisers. Early results indicate their methods are at least 10% more accurate than cookie-based segmenting.
And while their approach presents an interesting opportunity, it has a few limitations.
First of all, the information captured in internal databases is limited to only the information explicitly provided by users.
More importantly, it doesn’t provide enough insights about users’ interests and behavior outside of the system.
Is social data a better way?
Former Chief Scientist of Amazon Andreas Weigend says, “Social data is the new oil.”
I think he is spot on with his comment. In the past 5 years we’ve seen the incredible power of social data in powering:
- news media
- digital media strategies
- business intelligence
- public relations
- market research
- and more
What’s surprising to me, though, is how little all this data has been used to improve targeting of advertisements.
Two of the most popular social networks, Facebook and Twitter, have their own advertisement networks, which leverage data from their user profiles to target ads on their own platform.
But with popularity of social login (52% of internet users use social login), major publishers now have access to rich user information that can be used for real-time website personalization and targeting of advertisement.
Cookies suffer from a few major technical limitations:
- They don’t span multiple machines.
- They aren’t permanent.
- And they don’t work on mobile devices.
Social data, on the other hand, can be used as a unique identifier (Twitter, Facebook, Foursquare, etc.) that works across all platforms and can be permanently associated with a user.
For example a person checking out the latest sports car news and reading the NY Times can be inferred to be an affluent male executive, but the person may actually be a female undergraduate student writing a report on sports car!
One of the biggest benefits of social data is a more accurate picture of a user that goes beyond just browsing patterns, leveraging actual insights about interests and behavioral patterns.
Let’s take the example of a regular Twitter user named Jennifer, who tweets on average four times a day about things she is doing on a daily basis. Some sample posts might be:
- Argh! late for work again, need to get the kids ready for school early.
- Wow what an amazing article on Genetic disadvantage by @Gladwell http://newyorker.com/somelink.
- Jon Stewart last night was spot on about the healthcare #obamacare
- The wait at the BMW service centre is extra long today.
- I’m at Wellness Spa (Main st, Chicago) w/4 others http://4sq.com/link [with pic]
- Flying out to SFO for the conference, limited internet access
- Anyone having issues with the Verizon service today??
- Christmas shopping for the boys: nintendo or iPad? #firstworldproblems.
What looks like seemingly disparate public posts about someone’s life can, in fact, yield an amazingly accurate image of her.
These eight tweets tell me that Jennifer is a female business executive from Chicago, married with kids, drives a BMW, is interested in American politics, a Verizon customer and is in the market to buy an electronics product (tablet or a portable gaming console) as a Christmas gift.
Pretty good, huh?
So what’s this got to do with you?
In December 2013, Twitter announced tailored audiences, which allows advertisers to define groups of existing and potential customers and connect with them on Twitter.
With this, brands can now serve up highly targeted messages to the right audience at the right time.
Imagine if a large electronics store was using this feature. They could present Jennifer with a display ad unit about the hottest tablet computer for the holidays and with a link to nearest store in Chicago.
That’s the potential. That’s the future!
Now think about how, as a consumer, you’re constantly bombarded with advertisements from brands on TV, print and digital channels about products that you don’t need and brands that you don’t care about.
How refreshing would it be to only see ads that are relevant to you? Not just generic marketing messages from large brands, but helpful links that you can personally relate to and act on!
Consumers don’t like ads that aren’t relevant
Historically, advertisements have always been associated with some kind of an interruption in a process (while watching a TV show, reading a magazine or browsing a website).
But if the advertisements start becoming tailored to your personal need, you’re not going to block them out. Instead, you’ll start interacting with them.
Imagine what this would mean to the bottom line of the brands!
It’s time to leverage the new oil!
Over the next few years we are going to see social data being leveraged by the entire ad network ecosystem to bypass the obvious limitations of cookies and show highly targeted and relevant advertisements to consumers.
I truly believe social data is the new oil and, once companies start mining this rich data stream, both consumers and advertisers will come out as winners.
Don’t get left behind. It’s time to start exploring the riches of social data in your own marketing.
Read other Crazy Egg articles by Tapajyoti Das