Tell us if this sounds familiar:
You’re thinking about buying a new coffee maker and you do a quick Google search to see what models and brands are a good fit for your needs and budget.
Just a few moments later, you start seeing ads for coffee makers in your Facebook newsfeed, YouTube, or browser.
Online advertising works by using data from your browser to create targeted ads that you are more likely to click on. But, how do Google, Facebook, and other ad networks get information about interns users that allow them to create personalised ads campaigns?
Here’s what you need to know.
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How Targeted Advertising Works
There’s a big misconception that Facebook and Google use your browsing history to tell what ads they should show you, but it’s more complex than just this.
Here’s how the ads network gathers the data they need to deliver highly targeted ads:
Clickstream Data
Clickstream refers to the data collected using a text file also known as a “cookie.” Every time you visit a site, it sends a cookie to your computer to track your movements among its pages and gather information on the links you click and your browsing habits. For example, if a user’s clickstream includes a lot of parenting sites, then the user may get ads for parenting webinars, books, or even babies’ clothes, strollers, or other products.
There are two types of cookies: first-party cookies, which are sent by the site you are actually browsing, and third-party cookies, used by advertising companies to collect data on the target audience of their clients.
Search Data
More often than not, you are telling the internet what you are interested in. One study found that 92% of adults use search engines like Google or Yahoo to look for information.
The search engines then analyse the keywords users are using and their search habits to display relevant, targeted advertising alongside organic search results. Companies that want to advertise on the search engines bid on keywords and Google decides which ads to show based on the highest bid as well as other factors such as ad copy, landing page relevance, and so on. It’s a complex and effective system that has turned Google into a powerhouse when it comes to online advertising.
Purchase Data
Picture this: you go to a fashion website, add a glamorous and expensive pair of shoes to your cart, but then leave without completing the transaction. You want to think about it for a bit longer before making the investment. Then, you hop on Facebook and notice ads for the exact product you have in your cart.
As mentioned above, online stores use cookies to keep track of users’ activity – what you click on, what you buy, what you don’t buy, and so on. They then use the information about the past purchase to create personalised ads.
Profile Data
When you create a profile on social networks like Facebook or Instagram, you are asked to give all sorts of information, such as your name, age, nationality, religion, political views, interests, and so on. So, if you listed fishing as one of your passions on these social networks, then you can expect ads about fishing products.
Do You Want to Create Better Ads?
Understanding how online advertising works and how the internet delivers targeted ads to online users is the first step in creating campaigns that will generate results.
If you need help with your online advertising efforts, then the team at Australian Internet Advertising is eager to put your business in front of the right audience.
Check our extensive list of services here.
