Luigi Muscat Filletti

May 31, 2021

4 min read

How Targeted Ads Affect Consumer Behaviour

Psst… it’s Big Data

Photo by Ricardo Arce on Unsplash

So, in our last blog post we mentioned 5 ways how Big Data is improving content marketing, and how analytic technology is actually helping today’s marketers to better tailor content to their audience and achieve higher conversion rates through Big Data.

Now, we flip the coin and take a look at the consumer side of things, and how targeted ads are welcomed (or unwelcomed) by users.

Let’s explore.

As we know, Big Data has been allowing marketers to adopt behavioural marketing tactics for quite a while, in oppose to more traditional demographic and geographic approaches. At first, this was met with scepticism. Questions were (and are still) being asked about user privacy, with some even calling out behavioural marketing for being creepy.

Interestingly, however, new research has come to show that behavioural marketing, in the form of targeted ads, is actually not only welcomed by users, but also changes the way they perceive themselves, for the better.

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Targeted ads reinforce consumers’ self-perceptions.

In fact, it was proven that when consumers see an ad that they feel has been targeted especially to them, they tend to adjust their self-perception to match the implied label of that ad, as they recognise that ad to be a reflection of their characteristics (Summers et al., 2016). By means of example, an ad for a high-end watch is labelled as sophisticated and fashionable. Through Big Data, this ad is targeted to consumers whose online activity and interests fall under these labels. When the targeted consumers view this ad, they welcome it and additionally, acknowledged themselves as sophisticated and fashionable individuals. In a nutshell, the ad they view works to confirm a social label that they would have perviously recognised or assigned to themselves (Oetting, 2021). As a result, consumers try to live up to that label and gain greater interest in the brand whose ad has targeted them.

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Consumers will likely not accept ads that are not in line to their values and personality.

On the other hand, the same study found that if consumers are shown an ad that does not satisfy any of their perceived social labels, then the ad had no impact on their willingness to convert. The example used in the study was to display an ad for hot chocolate that was labbeled as either for the indoors or the outdoors. The study stated that “these results indicate that receiving an ad accurately targeted for someone who does not like outdoor activities can lead the consumer to feel even less like they like outdoor activities.” This comes to show that targeted content to people with opposing interests is likely not to work at all, and does not increase chances for higher conversion rates. This very shift in how they perceive themselves acts to strengthen the chances of them converting to a purchase, which, for today’s marketers, means significant opportunity.

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Note for businesses: this means that it’s a good practice to communicate brand values and personalities across targeted advertising content - doing so multiplies the chances of consumers feeling a heightened sense of relevance and familiarity to the product. In turn, this makes them more likely to resonate with that brand and head to purchase.

It’s important to maintain transparency.

Consumers are more likely to welcome targeted ads when they know that they have been behaviourally targeted. A good practice for marketers is to include an AdChoices icon on their content which gives consumers control over how information about their interests is used for relevant advertising (Digital Advertising Alliance, 2021). This helps establish better trust between the brand and the consumer, and works to verify to consumers that their data is being used to tailor advertising content to them.

To close off, we’re clearly seeing how Big Data is influencing consumer culture and buying behaviour. As this technology continues to be used for targeted ads, we’re also eager to see how this takes its affect on post-purchase behaviour and brand loyalty too. After all, data’s always one step ahead.

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Follow this blog to be a part of this journey into the realm of Big Data and content marketing. See you in the next!

This blog is a project for Study Unit DGA3008, University of Malta.