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Advertising Personalisation Digital Advertising

Is the advertising industry chasing the wrong dream in tailored advertising?

By Dan Plant, Head of Strategy

May 9, 2016 | 6 min read

A month ago I spoke at and attended the latest IAB Real Time Advertising conference. For once I was able to watch all of the talks, and it reinforced to me that as far as the media industry is concerned there is one incontrovertible truth that simply isn’t worth questioning: Consumers will like it if all advertising is actively targeted to them and made specifically relevant or tailored to each individual viewing the ad.

We believe this with apparently good reason. According to GfK 49 per cent of respondents agreed with the statement 'Advertising that is tailored to my needs is helpful because I can find the right products and services more quickly'. And according to Qriously (perhaps unsurprisingly) 54 per cent of respondents said they prefer relevant ads to irrelevant ones. (We will ignore for now the 46 per cent of people who prefer irrelevant ads…)

For a long time I also believed this premise. It was almost an article of faith for the first 15 years of my career, but recently (and I’m probably risking the wrath of the industry with this one) I’ve started to doubt. I’m no longer convinced that an advertising ecosystem dominated by personally tailored hyper-targeted advertising will be beneficial for anybody – brands, media owners or consumers. I believe that the continuing momentum towards a world of purely targeted advertising represents a failure of critical thinking in the face of commercial opportunity.

The key piece of evidence that started this journey for me was this piece of research by the University of Pennsylvania – titled 'Americans Reject Tailored Advertising'. In this study it was found that 66 per cent of people do not want advertising that is tailored to their interests. That number increased to 82 per cent when they were informed that it would be tailored based on their previous browsing behaviour.

This statistic is clearly very challenging to the received wisdom that consumers only want to receive personalised relevant advertising and that if we can just get the advertising to be perfectly relevant then people will love it.

Surely these different pieces of research are contradictory and can’t both be right? If 54 per cent of people like relevant ads then how can 82 per cent reject relevant tailored advertising? However I think that we only see this as a contradiction because we have fallen victim to the logical fallacy of 'Illicit or False Conversion', a logical fallacy which can be summed up as 'All X are Y therefore all Y are X' or by way of example 'all lions are cats, therefore all cats are lions'.

In this instance, we have made the false conversion that 'all the ads that consumers like(X) are relevant to them (Y), therefore all ads that are relevant to them(Y) are liked by consumers(X)'. This is not a valid conclusion, but it is an easy mistake to make. Unfortunately that mistake has led to a wide array of false conclusions.

The first illicit conversion has allowed us to make a second logical fallacy.

  • (False) Premise 1: [all] relevant ads are liked by consumers.
  • Premise 2: Targeted/tailored ads make them more relevant to the audience (hypothetically true – although we are still not doing this very well).
  • (False) Conclusion: People like or even want targeted/tailored ads.

I’ve been laboring under this logical fallacy for a number of years now and like the vast majority of our industry I have assumed that our ever-increasing ability to target and tailor advertising to make it more relevant to the end consumer must be a good thing for us all. It has always seemed like a win-win – we don’t 'waste money' advertising to people who don’t want our product and those people don’t waste their time looking at advertising for things they don’t want.

When expressed like this, the argument has undeniable appeal. The initial reaction is that just because the conclusion was based on a fallacy doesn’t mean that the conclusion is false (that itself would be another logical fallacy – an Argument from Fallacy), but that we simply needed more proof. However, the study above from the University of Pennsylvania suggests that not only is the conclusion (that people like tailored ads) based on a fallacious argument, it is also actually false.

This is obviously pretty worrying for an industry that is rushing headlong to programmatic and addressable everything. We have to ask ourselves if we are truly acting in the best interests of our clients, their brands, the media owners and consumers if we continue to push for tighter and tighter targeting and tailoring of advertising communications. If consumers have such a strong reaction to tailored advertising, what is the effect of pressing on ahead regardless? I truly believe that this thought should give us reason to pause and really understand the effect that ad technologies are having on consumers. And that’s all without even mentioning ad blocking once.

To get to grips with this question I believe we need to really understand WHY people might reject tailored advertising and what action we can take to ensure that they don’t switch off completely from all advertising messages. But that’s a topic for part two...

Dan Plant is group strategy director and real-time planning director at MEC

Advertising Personalisation Digital Advertising

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