Cloudvertising: Social Media and Online Ad Targeting

By cloudvertising, I don’t mean logos in the sky. Rather, I mean social media  completely changing how online ads are targeted. In a word, users are going to target advertisers, not vice versa.

It’s no secret that CPMs and CTRs aren’t what they used to be. And while part of this is banner blindness, and part of it is the economy, I think the biggest contributor is the habits of end-users plus basic human psychology.

You see, the nature of the web is that it gives us on-demand content, so we end up not noticing the content we’re not looking for. But more importantly, we distrust online ads because they run counter to the experience that draws us online in the first place. I go online to get what I want when I want it, and I never really want advertising. As Douglas Haddow put it:

“Unlike the television viewer, the Internet user has been conditioned to distrust online advertising from the beginning, due to its association with viruses and overall desktop dysfunction.”

And this is even truer with social media, where users log-on to interact with other users, and where a lot of the content consumed is user-generated — by their personal network.

Right now, there aren’t many options for targeting ads. You target them according to either a user’s search query, keywords on a page, or based on what you think a site’s audience might be. All of these methods share the assumption that third-party content can be used to accurately target a user. And the problem with such an assumption is that third-party content doesn’t say anything about the audience; it can only tell you about the publisher.

And publishers have a different mandate than advertisers. Their mandate is to keep their audience happy, and advertising doesn’t do that. But as long as they keep getting page views, they can sell ad space and stay in business.

The result is that ad spots sell for less than they could because advertisers never know when an impression or click is going to be a dud. So the only way to sell that space is to price it at a low enough rate that it offsets the advertiser’s uncertainty. The result is that publishers make less money than they could, and advertisers get fewer results.

This is where cloudvertising comes in. Cloudvertising is an extension of cloud computing, and social media is a big part of what makes up the cloud. What social media contributes to the cloud is data — data about users, by users.

And rather than leaving advertiser to guess what demographic might be interested in their product and who it is they actually end up targeting, this user-generated-data can used to turn things around and let users target them.

You see, user activity “in the cloud” all comes down to user-generated-content: they’re uploading and sharing content continuously, whether it’s vacation slides, bookmarks, or conversations. And this content tells us more about a user than any demographic analysis. It tells us about their actual interests and even what happens to be on their mind.

So user-generated-content becomes user-generated-data, and that data is much more personalized than any other data-set available. Cloudvertising is about indexing and mining all this user-generated-data, and then using that data to target users with ads that will actually appeal to them, and then convert. In other words, it would be an extension of cloud computing.

So what would a cloudvertising platform do, exactly?

Well, it would do four important things:

• First, it would support all popular online ad models (CPM, CPC, and CPA)
• Second, it would be integrated with social media APIs (Tweet this, Digg this, etc.)
• Third, it would refer back to all your social networking content (wall posts, tweets, etc.), indexed it, determine your interests, and profile you.
• Then, it would show you ads that you might actually (1) be interested in and (2) act on.

If there happens to be no CPM advertisers in the system that fit your profile it might show you a CPA offer that appeals to you. So the advertiser doesn’t squander an impression, and the publisher still has a chance of making a commission from an ad that has a high likelihood of converting.

The root problem facing publishers isn’t so much falling ad revenues, but that ad technology hasn’t yet caught up with content technology. Once it does, both publishers and advertisers will be better off because there’ll be less uncertainty, fewer inefficiencies, and market ad rates will actually reflect full potential value of the ad space.

The resources for a new ad technology are there: they’re social media and all the user-generated-data produced through it. It’s really just a matter of time before one of the big guys, like Google or Facebook, rolls out something like it. Such technology may be the life preserver many publishers today need to stay afloat.

The question is with the advent of such new technology will overcome the filters the target audience has developed or whether human psyche will simply adapt more advanced forms of banner blindness?

About CT Moore

A Staff Editor here at Revenews.com, CT Moore has over 5 years experience leveraging search and social media to help brands meet their business goals online. By day, he provides SEO and social content strategy to both SMBs and enterprise level companies. CT is also an accomplished blogger, podcaster, and conference speaker who educates groups and companies about how they can leverage digital media. You can find CT on Twitter @gypsybandito.

Website: http://www.gypsybandito.com

Twitter: gypsybandito