Have you ever searched for something online, only to then see ads for that very product popping up everywhere? Or have you had conversations with friends about wanting something, and then seen an ad for it? It can seem like ads know exactly what we want, even before we realize it ourselves.
The truth is, advertisers have gotten very sophisticated at predicting what we might be interested in buying. There are a few main techniques they use to figure out our personal interests and target ads specifically to us:
Tracking website and app usage
When you visit websites and use apps, there are several ways your activity can be tracked:
- Cookies – Small text files placed on your device by websites to identify your browser and track usage.
- Web beacons – Invisible tags on web pages that allow sites to monitor who visits.
- Device identifiers – Unique numbers assigned to mobile devices that can be used for ad targeting.
- IP address – Your device’s numeric address on the internet can sometimes be used to identify your location.
By combining data from these sources, advertisers build up a profile of the types of sites you like to visit and the content you view. They know what you’re interested in based on the pages you spend time on.
Tracking across devices
It’s not just your activity on one device that gets tracked. Advertisers have developed methods of identifying you across all your devices and combining that data:
- Cross-device tracking – Using info like login accounts, device IDs, and other markers to identify a user across multiple devices.
- Probabilistic matching – Analyzing patterns of usage, location, and more to determine devices likely belong to the same user.
- Deterministic matching – Connecting devices based on definite signals, like logging into the same account on different devices.
That means your browsing on your laptop, phone, tablet, and more can all be tied back to you. Giving advertisers an even more complete picture of who you are and what you like.
Location tracking
Mobile devices make it easy to know your location at all times. Apps can access your location data in a few ways:
- GPS – Precisely pinpoints location using satellite data.
- WiFi – Spots nearby WiFi networks to estimate location.
- Bluetooth – Uses Bluetooth beacons in stores to track if you’re nearby.
- Cell Tower – Triangulates location based on proximity to cell towers.
Location reveals a lot about you – where you live, shops you visit, restaurants you eat at, and more. Advertisers use location to promote nearby businesses, deliver ads relevant to frequently visited spots, and infer your interests based on the places you go.
Buying data from data brokers
Advertisers don’t just rely on tracking you themselves. An entire industry exists of data broker companies that sell marketers access to consumer data:
- Data brokers – Companies like Acxiom, Epsilon, and Experian that collect vast amounts of data on consumers from public records, store loyalty cards, surveys, and more.
- Partner networks – Ad tech companies like LiveRamp and Oracle that help brokers match their offline data to online profiles.
- Data exchanges – Ad exchanges like BlueKai and Drawbridge that allow real-time trading of consumer data segments between brokers, advertisers, and publishers.
Data brokers make it possible for advertisers to simply buy access to specific consumer interest segments. For example, an athletic apparel brand could pay to target users matched with “fitness enthusiast” or “outdoor adventurer” data segments.
Building detailed profiles
Combining all these sources – website activity, cross-device tracking, location, and third-party data – allows advertisers to assemble very detailed profiles of you as a consumer. This can include:
- Basic info – Age, gender, location, etc.
- Lifestyle – Interests, hobbies, political leanings, health concerns, etc.
- Shopping habits – Brands you like, types of products you buy, price ranges, etc.
- Media preferences – Shows you watch, publications you read, genres you engage with, etc.
These rich advertiser profiles, which are constantly updated in real-time, enable extremely customized and relevant ad targeting.
Analyzing you algorithmically
In addition to collecting data about you, advertisers also use complex algorithms to analyze and infer your preferences:
- Lookalike modeling – Identifies new potential customers that share common attributes with existing customers who already bought the product.
- Collaborative filtering – Determines what you might like based on patterns of interest correlation among many users.
- Artificial intelligence – Advanced machine learning draws non-obvious conclusions about consumers’ preferences and likely interests.
The outputs of these algorithms allow advertisers to predict preferences you may not even know you have yourself. Giving them yet another source of insight to personalize ads.
Putting it all together
To assemble the right audience for an ad campaign, advertisers combine everything together:
- First-party data – The advertiser’s own data on customers and their attributes.
- Second-party data – Data shared between partners, often through data exchanges.
- Third-party data – Data bought from external data brokers and aggregators.
- Algorithms – To refine audiences and find lookalike segments.
All this rich data gets filtered into the ultimate targeted audience. So when you see an ad that seems to know exactly what you want, it’s because advertisers have worked hard to understand you and connect you with relevant messages.
Can I opt out?
If this level of ad targeting creeps you out, there are some steps you can take to opt out of tracking and personalized ads:
- Adjust cookie settings – Block third-party cookies in your browser or use private/incognito browsing.
- Opt out of tracking – Visit sites like optoutprescreen.com and adchoices.com to remove yourself from data collection.
- Use privacy tools – Install browser extensions like Privacy Badger and Ghostery to prevent tracking.
- Go anonymous – Use a VPN, Tor browser, or anonymity network like The Onion Router to hide your identity.
Keep in mind, though, that staying completely invisible online takes some work. Our activities generate data as a matter of course that advertisers are eager to access. While you may be able to limit the extent of personalized ads, expect to still see some relevant to your demographic.
The future of relevant ads
Far from slowing down, expect ad targeting to keep getting creepier as technology advances:
- More connected devices – Home assistants, smart TVs, and IoT expand the surfaces where you can be tracked.
- Biometrics and behavior – Voice recognition, facial analysis, and emotion detection to gauge reactions.
- Removing anonymity – Tying online activity to real-world identities via biometrics and other signals.
- Sophisticated analysis – AI will find ever more subtle and predictive signals in consumer behavior data.
While this hyper-personalized future will certainly make ads more relevant, it also raises privacy concerns. You may enjoy spot-on product recommendations, but should advertisers have such intimate knowledge of your identity and inner self? There are complex trade-offs involved in balancing convenience, relevance and privacy. As individuals and societies, we must think carefully about how much we choose to share with the algorithms.
Conclusions
In summary:
- Advertisers track website usage, devices, location and purchase third-party data to understand consumer interests.
- Profiles are built by combining many sources of data into a detailed picture of preferences and habits.
- Algorithms analyze the data to find hidden patterns and make predictions about consumers.
- All this data gets used to assemble targeted ad audiences based on relevance to each person.
- Consumers can opt out of tracking, but staying fully anonymous online takes effort.
- Ads will likely continue to get more personalized as technology evolves.
So next time you see an ad that really catches your eye, know that behind the scenes advertisers devoted significant resources to learn all about you. The depth of today’s ad targeting can certainly feel creepy at times. But it also means you as a consumer are seeing messages you’re more likely to actually find useful. It’s a trade-off we’ll continue navigating for years to come.