This post is a result of a random observation that I’ve made over the past couple of weeks. Targeted advertising has proven to be hugely successful both for consumers, advertisers and more importantly for companies like Google that have been the pioneers of the concept. Starting with ‘text’ ads to the current rave about ‘display’ advertising to the future which is ‘location based’ advertising, targeted advertising has revolutionized the whole e-commerce space. Here are a few thoughts on status quo and future directions.

Question # 1: Is ‘targeted’ advertising ‘smart’ advertising?

Answer: Indeed, incredibly smart. Apart from the fact that it is ‘targeted’ as it generates relevant advertisements triggered by the user’s queries here are a few more reasons.

• Aware of the user’s geographic location through the IP address and can micro-target an audience pretty much to a radius of a few kilometers.
• Based on the demographics – Gender, Age, Status etc.,
• Recognize the device from which the query is being fired and return ads accordingly,
• Using the data from services like personal search or clicks and predict the behavior of an individual and serve ads accordingly
• Using data from your social graph for example, if you ‘liked’ a product on facebook or the type of places you’ve checked in on ‘foursquare’ etc.,

Question # 2: Can ‘targeted’ advertising grow even smarter?

Answer: Again, indeed. Consider the following scenarios.

I’ve been observing a deluge of Chrome ads these days …both as video embedded text ads and single block text ads on ‘Youtube’. I like chrome and it is my favorite browser but is Google smart enough not to push these ads onto somebody already using chrome? No, at least not yet. With a growing population of people online using chrome this practice, if not corrected, will only prove increasingly fruitless. This stems a new question. Why can’t Google detect the browser information and trigger ads accordingly? I can imagine a world of opportunities if this happens.  Different browsers have different capabilities and can run applications or services that are aligned to those capabilities etc.,

I’ve also been observing another set of ads that Google has been presenting. The query site:[DOMAIN NAME.COM] triggers an ad for  ‘Google Webmaster Tools’.  But the ad gets triggered only for some domain names.  Quick research seems to reveal that these ads don’t appear for the supposedly chosen few ‘white hat’ or well know websites (though I could be quickly rebuked on that), which is fine. For the rest, the problem is that Google doesn’t seem to be checking whether the domain name used in the query already is using the advertised application or not, in this case Google Webmaster Tools.  Again, this is targeted advertising but definitely not smart enough. Why waste so many impressions when you can save on them by putting a check in place to confirm whether the user is already using Google Webmaster Tools, especially if the user is making the queries logged in ?

Now, I do understand that often these changes are not as easy as I’m proposing them and that there could either be a ton of technical constraints that are acting as bottlenecks or simply the effort v/s outcome tradeoff is not worth it, at least not yet.  But I see incredible potential here especially as the idea of OpenSocial and OAuth become more popular and with so many companies opening up their hoods through the APIs, advertising for these very applications can make use of this development and gain an understanding of what applications a user has already been using and present ads in a more smarter way.