You could say that in the age of Big Data, advertising is downsizing. Some online ads, at least, are using social media sites and personalization data to target very narrow audiences—even individuals-- for better marketing results. That’s one finding of new research presented by Catherine Tucker, MIT Sloan Professor of Marketing, at the recent MIT CDB conference on Big Data.
Speaking about her latest studies of social advertising, Tucker said that "with people spending 20 percent of their time online on Social Networks, online advertising needs to adapt to this new environment." In particular, ads are increasingly being displayed only to a social network, say on Facebook, on the theory that Friends are interested in similar things. Even without a formal endorsement, the ad appears to have support from the social network.
To find out how effective these ads are, Tucker ran a/b tests with a million viewers and found that social ads attract nearly twice as many clicks and conversations as non-targeted ads [see chart]. The biggest impact was targeting ads only to a social network, she said.
She cautioned that the advertising not be too overt in mentioning friendship because “intrusion gets pushback” or viewers go elsewhere. For more details on her presentation, view the slides here.
Tucker is the Mark Hyman Jr. Career Development Professor and Associate Professor (with tenure) of Marketing at MIT Sloan. Her research examines how technology allows firms to use digital data to improve their operations and marketing and in the challenges this poses for regulations designed to promote innovation. She has particular expertise in online advertising, digital health, social media and electronic privacy.
Here are some vidoe clips from Tucker's presentation at the MIT CDB Big Data event.