blinkx, the ad targeting company, took a real pasting when it recently issued a profit warning. It said it was partly down to the damaging blog from a Harvard academic that cast doubt on the veracity of the company’s audience traffic data. It also said it was down to “industry-wide issues of efficiency and effectiveness”, whatever that means.
blinkx claimed to have refuted the claims in the derogatory blog and had recovered most of the value it lost it in that share price hit. But there must still be a bad after-taste for advertisers as the blog was only saying what many were thinking, not about blinkx specifically but about online advertising in general and targeted advertising in particular. Everyone knows not all Internet traffic is human. Everyone knows traffic can be ‘managed’. Everyone knows not all searches are equal. Everyone knows targeted context is sometimes more like a stab in the dark. And everyone knows the current measurement tools ability to tell the difference between the good and the bad of all the above is imperfect at best.
This means advertisers are bound to have doubts, even if they assume there is no hint of manipulation. These doubts centre on what blinkx presumably means by “issues of efficiency and effectiveness.” The old advertising cliché was: “I know I waste half my advertising spend, I just don’t know which half.” Plus ça change.
I’ve written before that the effectiveness of targeted advertising has been oversold, and the result has been a reluctance by advertisers to pay the kind of prices that make it work for service providers. That doesn’t look like changing any time soon.
Worse; even though targeted advertising is a shadow of the sector it was billed to be, is it already wearing out its welcome with consumers? Everyone has the experience of annoying animated ads slowing down your chosen pages as further promotion for a product you already bought follows you around like a needy stalker. Do you want that experience on your TV choices?
The dilemma for TV, as it tries to tie in social media in order to get closer to its audience, is that the collateral damage may be greater than any benefit achieved. With such a new genre as social media it is not surprising its service providers are still experimenting as they try and maximise their return. But it is clear that whenever they cross line – and in particular when they caught out crossing the line – the users make it clear they need to back off. Most recently Facebook had to apologise when it admitted it had been experimenting with manipulating moods by tampering with personal news feeds. Trusted, companionable, communication channel or freaky, dystopian Big Brother? TV and its advertisers may quite reasonably choose not to risk buying in to one but getting the other.