Consider the following hypothetical scenario:
100 people watch a sports broadcast on television. During a timeout, an advertisement appears on the screen. Out of 100, 20 people are really target audience for this advertisement. So what matters to the advertiser? The fact that the viewership of the broadcast is 100 or that the number of target audience it is reaching is 20?
It’s the kind of eyeballs that counts 9 out of 10 times (I say 9 out of 10 times, because there are one-off cases like a Superbowl ad or times square banner ad where you are just trying to build the brand recognition). That’s the secret behind the success of search advertising because here you are reaching the right kind of audience. Advertising that targets one customer at a time based on any criteria, be it mobile phone advertising targeted based on location and time of day to an individual, or advertisement next to a web email based on what conversation a person is in, or search advertising where the audience is really trying to look for something, is more effective than the mass advertising because of the same reason. The advertiser knows that every pair of eyeballs they are reaching to are the ones that matter.
How to find out which audience matter? Couple of ways: first, profile characteristics of the audience and second, activity of the audience. Linking this information to the advertisement can provide right targeting. Let’s look at a couple of examples to make more sense here. On the Internet, if you can find that I am a person living in Seattle (City from IP address: a profile characteristic) and a Jerry Seinfeld fan (I searched for Seinfeld videos: activity), an advertisement selling DVD of Seinfeld sitcom might make more sense to me. Or, on a mobile phone, if you know that I am currently in New York City (mobile signal: a profile characteristic) and texting friends to ask for dinner (text message: activity), an advertisement selling specials at a restaurants in the vicinity will be the most attractive to me.