Are the advertisements on your phone or TV streaming services personalized? If you have cut the cord but still watch TV, you’ve probably noticed that the commercials you see are getting better, more personalized, and eerily accurate in predicting what you want to buy. These targeted advertisements are known as addressable ads. And the industry is already worth billions of dollars.
An advertisement revolution
We already receive great advertisements through social media platforms. The internet’s many algorithms constantly monitor our online activity. Cookies harness all that information and sell it to advertisers. Using that information and some AI machine learning, advertisers then create targeted ads based on our likes.
Admittedly, the advertisements we see today are great at knowing what we want. Even if you come from a different culture, addressable ads consider that when defining your interests. If you’re bilingual, you may have noticed ads in English and the other language(s) you speak. Somewhat more eerily, you might have noticed ads will also adapt based on your location. Aside from the future of advertising, addressable ads bring up many concerns over online privacy and the value of user data.
Ads are adapting to streaming
As more people decide to join cable cutters and rely exclusively on streaming services, addressable ads will continue to appear. Ads showing personalized offers for products or content you’re interested in, instead of generic advertisements, is definitely an improvement. However, the situation begs the question of where this is all headed. Some companies allegedly want to end internet cookies in the next few years. Google’s been trying for a while now. That would be a disaster for addressable ads since cookies are how they acquire information on our interests.
How do they work?
So how do addressable ads work? First, online cookies collect data from users’ online activity. According to a recent NordVPN study, social media sites have up to 160 cookies to collect data. The same study found the average website uses 48 data trackers to gather user information. Companies collect information about viewers, such as age, gender, interests, and more. Using machine learning, companies create customer profiles for specific advertisements to target. Algorithms then use that information to deliver addressed ads to users on sites we visit.
The future of advertisement
More likely than not, addressable ads are the future of advertising. Still, the will-they/won’t-they dance around tech companies getting rid of cookies will define a lot. As more countries worldwide scramble to improve online privacy, targeted ads could see a setback. The trend in online privacy is allowing users to opt out of sharing their data with the websites they visit. The UK and European Union already have opt-out measures on most sites. California’s recent online privacy law appeared to follow suit.
So, while addressable ads are clearly the future of marketing, the way they work could soon change. It seems, eventually, we may be able to choose whether we receive personalized ads or not. How addressable ads will survive if cookies are eliminated is a question for another time; in the meantime, they’ll likely be around for the foreseeable future.
- @diego-ferragut contributed to this article.
