Updated: Nov 8
Author: Joanna Kedzior
Date of publication: 12/04/2022
Historically, the concept of marketing revolved around reaching as many people as possible with advertisements. Just a couple of decades ago, a company could reach large numbers of a nation’s population by advertising their product on one of the few existing TV channels at primetime hours. Most people also consumed their news through the radio and newspaper, hence those two mediums also were a popular choice for advertising your products.
Through the advent of smartphones and social media, the advertising landscape has changed drastically. Physical newspapers have been transformed into websites, and TV channels have been transformed into streaming services or social media platforms. This enables marketers to reach consumers almost any time of the day, anywhere in the world. Not only are consumers more reachable - through different tools, but also marketers can target their target groups more effectively than through conventional marketing.
As you have probably noticed when surfing on Google or different social media, several advertisements pop up sporadically in the feed between different content. Many times, it also seems that the advertisement is directed towards you. It resembles different things you searched for in Google or talked about with friends. In some instances, it even resembles things you thought about without even communicating it. Is this a convenience, or does Google, Facebook, and Instagram eavesdrop on us through our digital devices?
Online Marketing - User’s side and Seller’s side
To better understand how this works, you can see it as two sides of digital marketing. The first side is between the consumer and the smartphone. Upon using an application or a program for the first time, the application provider might ask you for permission to use your microphone, camera, and actual location. Whilst it sounds like an obvious violation of integrity, these permissions are actually necessary in order to use the application. To be able to video call through WhatsApp or Facebook Messenger, the application needs access to the microphone and camera. To use certain streaming services, the app needs to know where you currently reside since certain countries don’t have access to this specific content. When surfing online through internet browsers, the browser often asks you to accept cookies. This implies that you will have a smoother internet experience since it stores small packages of data that don’t need to be downloaded every time you enter a website that you have already visited. However, at the same time, it collects information about you that you might not want to share, and it’s hard to track what data the website has collected about you. Actually, large sites like Google and Facebook secretly track some of your searches and pages visited to keep a profile of you. Why is that in their interest?
The other side of digital marketing is the relationship between the marketer and the smartphone. Due to the large extent of pages, devices, and content on the internet, certain technologies have evolved for effective marketing. The most prominent technologies are Google Ads and Search Engine Optimization. SEO is a technique for making a company’s content or website visible without paying for advertisements, also known as organic traffic. As the name suggests, SEO is about optimizing the information on the website to best fit the queries of internet users interested in utilizing the selling company’s services. The search engine assesses if the description and information provided on a specific website matches what the user is searching for. If the query matches the content, the site has a higher chance of being the first suggested link presented to the user. Top-ranked sites have a higher probability of being visited by the user. Hence, as a company you want to have the most optimized web page compared to your competitors. By identifying common search strings and analyzing different consumer behaviors, the company can increase the traffic to its website by adjusting its content to match consumer patterns.
Targeted marketing through Google Ads
Rather than organic traffic, Google Ads is a targeting online marketing tool where you have to pay to get a higher rank. For each click on a promoted ad, the advertiser pays a certain amount of money, thus it’s called PPC (Pay-per-Click) Marketing. Marketers can target their users by deciding which user groups they want to expose to the ad - it’s possible to segment users into different age categories, different geographical groups, or through interests (like sport and music). Advertisements promoted through Google Ads can show up in two ways:
related to a query in a search engine where the ad will overrank similar advertisements,
in Google-partnered sites and apps where it will show up amongst other content (for example you usually find such ads on newspaper websites online).
In the first of those cases, the ad shows up related to a user query, hence you can argue that the ad is very relevant for the user.
In the second case, ads show up even though the user did not intend to look for the ad. Surprisingly often, those ads seem to somehow be relevant to you and reflect products or services you recently talked about or were looking for. The algorithm, through which Google calculates what ad should show up for which user, evokes questions of integrity. Large websites like Google, Facebook, and YouTube collect a lot of information about you, for example, your name, your residence, and your search history. By analyzing this information, those websites can make qualified guesses about what type of person you are.
This implies that they can tailor ads to better fit who you are, hence providing a targeting tool for companies to utilize. For example, if you queried “running shoes” in Google, Google might profile you as a sportsperson. If you have also queried “nutritious food”, Google can add this information to your profile, combine it with your query about running shoes and calculate that you seem to want to lose weight. Hence, there is a chance that advertisements trying to sell you weight loss pills or personal training sessions will appear. While most information is not sensitive on a personal level, there is information that most people want to keep private. For instance, a person might search for different illnesses due to symptoms they feel, the information we usually don’t want to share with anyone.
Data collection - unethical or good service?
It’s very hard to control what information different actors have about you, and in some instances what information is shared with other actors. For example, Facebook and Cambridge Analytica were involved in a scandal in connection to the US Presidential Election in 2016. More specifically, Cambridge Analytica gained data from Facebook and sold it to one of the election teams who could exploit it to influence voters. This sparked a lot of questions on how collecting data about our online personalities can face consequences in the real world if companies sell this information to other actors without notifying the user. In Europe, this led to the introduction of the General Data Protection Regulation (GDPR) in 2018, which forces companies to ensure that data collected is stored privately and not shared with actors that should not have access to the information. Breaching this regulation generates enormous fees for the companies involved in such a breach.
Indeed there are concerns about privacy with regard to targeted marketing, but actually, users enjoy getting ads that match their preferences. The searching cost for a user decreases to a large portion thanks to targeted ads. Also, thanks to the profiling of the user, the algorithm can find ads that are useful for the user without the user being aware of the product beforehand. Moreover, brands can increase their brand awareness and reputation by targeting a customer with such an ad. And in order to be able to create such an ad, the promoting company needs to have insights into the user’s profile.
Targeted online marketing provides benefits for both companies and consumers. By exploiting advanced algorithms, companies can pinpoint what user group they want to show their promotion to. Further, by giving away certain information about yourself, a consumer can decrease his searching cost as advertisements have a higher probability to match your profile. However, it’s also a question of integrity and ethical standards, since we can’t control which information is provided to the companies and we don’t know who has access to this information. Hence, in order to keep customers happy with the ads they see, it’s important for companies to not misuse the personal information. It’s also important to be transparent with the customer about what information the company has collected. Otherwise, the customers might see them as unreliable and have bad associations with the company, leading to a negative reputation instead of increasing profits.