Don Marti

Wed 23 May 2012 08:47:06 AM PDT

Perfectly targeted advertising would be perfectly worthless

Another angle on the targeted advertising problem.

First of all, I could target you to sell a product or service with 100% accuracy. Just walk up to your house and offer to clean your gutters.

Naturally, you probably wouldn't take me up on it, because you'd probably think I was just casing your house for a burglary, but you get the idea. People get in your face and try to sell you stuff all the time. And, because you have no context or a signal of the value they can provide, you tell them no thank you. (You are polite, aren't you?)

The more targeted that advertising gets, the less well it carries out its essential role of sending a signal, and the more it's like an unknown guy on the porch mumbling about if you want to buy something. (More detail on this subject: Ad targeting: better is worse?)

Which brings us to a must-read article by Michael Wolff, on Technology Review. "At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media."

Exactly. The more targeted that advertising is, the less effective that it is. Internet technology can be more efficient at targeting, but the closer it gets to perfectly tracking users, the less profitable it has to become.

The profits are in advertising that informs, entertains, or creates a spectacle—because that's what sends a signal. Targeting is a dead end. Maybe "Do Not Track" will save online advertising from itself.