Targeted, Obtrusive Ads Bad For Advertisers

By June 14, 2010

One of the big criticisms of Gmail and Facebook ads is that they’re creepy. If you’re male, single and over 35, you’re going to get a lot of Facebook ads inviting you to Cougar Town, and ads based on the contents of your

email are intrusive and seem to exist simply as “ads for ads sake.” What’s the CPM on Gmail scrapes?

While targeted ads are successful, and obtrusive ads are also successful, the both used together is a bad combination for advertisers, according to a study by Avi Goldfarb, professor of marketing at the University of Toronto, and Catherine Tucker, assistant professor of marketing at MIT (pdf).

“We find that matching an ad to website content and increasing an ad’s obtrusiveness independently increase purchase intent,” Goldfarb and Tucker write. “However, in combination these two strategies are ineffective. Ads that match both website content and are obtrusive do worse at increasing purchase intent than ads that do only one or the other.”

The main reason this combination bothers users is because of privacy concerns. Also, studies published since the 90’s argue that consumers resist targeted advertising because they feel that companies are trying to manipulate them, and a 2009 study shows that consumer awareness of manipulation is even higher online.

The study’s authors estimate that $664 million is spent on ads that are both obtrusive and targeted. They believe that advertisers could cut over 5 percent of their ad spending without affecting overall performance just by cutting these.

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