The recent announcement by P&G that it is discontinuing "precision targeted" advertising on Facebook because it isn't working calls into question the entire strategy behind much online display advertising.
Online display advertising has been sold to us as superior to traditional advertising because it presumes that reaching the perfect individual is more economically advantageous than reaching a broad demographic type.
For the most part, offline advertising is sold on demographics while display advertising is sold on data-driven targeting.
While P&G's experience should not be taken as conclusive proof of anything, it suggests that for big brands the demographics model is more economically efficient than the data-driven model.
Their experience with Fabreze air freshener was cited by The Wall Street Journal as an example of how highly targeted advertising failed.
For Fabreze, P&G targeted people with pets and people with large families. The presumption was that these people would have a significantly higher likelihood to purchase an air freshener than the public at large. Sales stagnated.
Then P&G targeted all adults over 18 -- a very broad swath. And sales picked up.
Presumably P&G had the good sense to use the same creative so they knew what variable they were testing.
If P&G's experience turns out to be projectible -- and it has been reported that other marketers are having similar experiences -- the whole model of online advertising, based on data-driven "precision targeting" and tracking -- and enabled by ad tech -- needs to go right down the toilet. It's a sham.
What a wonderful thing it would be if this turns out to be true.
Imagine an internet without ad tech...
- where the current obnoxious practices are acknowledged to be wasteful and counterproductive
- where you are not being stalked
- where you are not being inundated with ads for stuff you bought 3 months ago
- where you are not slowed down waiting for someone's crappy ad to load
- where your data plan money is not being wasted loading some company's ads
- where people are not opening files on you every time you take an action
- where ads are bought directly from publishers and not run through the black box of unnecessary, creepy networks and middlemen inhaling half your ad budget.
In a rational world? Yes.
In the contemporary world of advertising? Not a fucking chance.