Best Practice
Products
Personalised advertising: The pros and cons
29. June 2021
Anyone who places advertisements on the Internet, on social media & Co. hopes for good results - whether new leads, up-selling opportunities or the sale of products. Personalized advertising is an efficient way. But does it really work?
Personalised advertising operates on the basis of the behaviour of people on the Internet – what are their preferences? What are they interested in? Which products do they look at, which ones do they buy – and most importantly, which ones do they not? It is based on data collected from different places. This includes browser, cookie, social media and tracking data, which can be demographic or transactional, among other things.
Data as a basis for personalized advertising
The different data are then used as the basis for personalised advertising – they are processed and analysed automatically. Ads are then defined and adapted for the different target groups. This is to ensure that only people who are interested in the ads see them. This can increase the conversion rate, since the target group is addressed specifically – at the same time, companies save time and money.
Disadvantages and criticism
What are the disadvantages of personalised advertising? On the one hand, care must be taken to ensure data protection and compliance with the GDPR. However, it should be noted here that this is also true without the use of personalised advertising. Another criticism that often comes up is personalisation – why am I seeing athletic shoe ads when I just talked to my girlfriend about wanting to start running again? Many people then think that smartphones are “eavesdropping”. Of course, these ads do not come from there, but rather from our (search) behaviour. At the same time, some customers also get annoyed when they see ads that don’t interest them at all – such as pregnancy products, even though they’re not pregnant or don’t want to have children. We would like to point out that errors can sometimes occur – even an algorithm is never 100 per cent perfect.
Benefits of personalized advertising
The advantages of personalised advertising for customers are that they receive relevant recommendations, which also strengthens loyalty to the company. An example: a person has problems with dry skin, orders corresponding products from a company and is also registered for the newsletter. If this company has a new product for dry skin, they can target that information at the person perfectly – this not only gives them coordinated information, but also makes them feel advised and valued. Without personalisation, the person would receive a newsletter telling them about an acne product, for example – something they will not buy as they do not have this skin problem. Another advantage for customers: personalised ads can help them make decisions. Think of Amazon inserting the “Customers who viewed this item also viewed” bar under the product the user clicked on.
A conclusion
All in all, personalised advertising offers more advantages than disadvantages – especially because customers are now used to receiving offers tailored to them. It is important to gain people’s trust and to offer them real added value through personalised advertising. Only then will both sides win – companies and customers.
From our INSIGHTS ON AIR podcast (in German):
Theres Baumgartner and Anne Marchal talk about the handling of personal data.
More posts
Blogs
KI
Referenzstories
Services
Blogs
Products
Referenzstories
Services
Referenzstories
Services
Referenzstories
Services
KI
Customer Service
Blogs
Referenzstories
Energy
Blogs
Marketing & Sales
Referenzstories
Finance
Best Practice
Blogs
KI
Blogs
KI
Referenzstories
Energy
Best Practice
Archiv
Blogs
Blogs
Archiv
Blogs
Archiv
Blogs
Products
Referenzstories
Services
Referenzstories
Energy
Referenzstories
Services
Best Practice
Referenzstories
Health
Best Practice
Best Practice
Health
Best Practice
KI
Best Practice
Products
Podcasts
KI
Best Practice
Archiv
Podcasts
Best Practice
Products
Archiv
Podcasts
Best Practice
KI
KI
Marketing & Sales
Marketing & Sales
Products
KI
Products
Entwürfe
KI
KI
Blogs
Products
Referenzstories
Archiv
Best Practice
Referenzstories
Archiv
Best Practice