You don’t need to look far to come up with an example of how targeted advertising works. While reading a story in an online publication, you may have noticed an ad proclaiming discounts on kitchenware at the bottom of your screen, or you could have been scrolling through your Instagram timeline when a similar ad interrupted your flow of posts. It occurs to you that you were shopping around for a set of cheap kitchen knives just yesterday.
How did they know to pop ads about the very thing you were searching for? Targeted advertising is the short answer. Facebook used its data about you and your online shopping history to filter ads and present only those you would most likely be interested in. When digital marketing agencies in New York or any other part of the world proposes social media ads to their clients, this is the capability they are hoping to tap into.
However, you need to be aware of several risks associated with targeted advertising as you engage with your agency.
The U.S. authorities have put in place several legislative acts to curb discrimination, such as the Fair Housing Act. This act aims to ensure landlords and real estate agents offer their products and services without religious, family, or racial bias.
In the quest to target affluent potential homeowners, the algorithm that determines who sees what ads may leave out a certain ethnic minority, leading to a perception of bias; for this reason, some social platforms and search engines have been accused of discriminatory targeting.
To be fair, Facebook and Google may not be aware that their algorithms are perpetuating such biases when creating them. But it would be a severe risk for your brand image to be associated with discriminatory advertising practices.
In addition to potentially falling foul of anti-discrimination laws, targeted advertising also introduces the risk of being perceived as engaging in unethical business practices. Recruitment agencies, for instance, can be seen as reserving specific jobs for certain genders or ethnic groups when they use the Facebook algorithm to send their ads to specific niches.
Betting firms targeting low-income youths risk being accused of siphoning money away from the poor to boost the coffers of the already rich. They can be seen as encouraging a culture of idleness among young people. Instead of spending their day searching for the best odds on betting websites, they should be on the hunt for real jobs or furthering their education.
Some conservative communities may take issue with contraceptive advertisements targeted at young men and women. Arms vendors who target their ads to neighborhoods with a history of attacks will be accused of promoting a culture of violence and endangering lives. This may feel a little unfair, considering that your intention is simply to place your products in front of people who are more likely to buy them. And the fact that you paid more to ensure your messaging reached the right audience.
Before you go live with an ad campaign, you need to be sure that it will not come with politically harmful connotations. This is why it is important to have an experienced agency on board that can help you navigate the targeted advertising minefield without inviting public backlash.
The Wrong Target
Zeroing in on a particular target audience means that you could be sacrificing sales to other market segments. So when deciding on a target, you need to be sure that it offers you the best potential return on your investment. This is why any agent worth their salt will insist on backing your choice of target audience with mounds of solid data before spending a dime on advertising.
But even with intense research, you may realize with time that another segment offers better potential for revenue than the one you have chosen. In this case, you should be flexible enough to change tact and redirect your message to the new audience.
Take a Step Back First
Targeted advertising comes with a number of risks. In addition to creating a potential PR disaster, you could find that you have poured precious advertising dollars down the drain by focusing on the wrong market segment.
You can mitigate these risks by conducting thorough research on your target audience before you embark on your campaign. Also, take the time to find out how targeted campaigns have worked or failed for your competitors in the past and learn from their results or mistakes.