How Does Targeted Advertising Work and Why Should You Introduce It into Your Marketing Strategy?

Everywhere you look, there’s something vying for your attention, from sneakers to meal kits to those weird gadgets you never knew you needed. But have you ever noticed that the online ads you see feel suspiciously relevant? That’s not a coincidence, and it’s not because the internet knows you too well. It’s because of targeted advertising.

Read on to understand what targeted advertising is, how it works, and why it’s an essential tool for boosting your e-commerce revenue.

What is Targeted Advertising?

Targeted advertising is a form of online advertising where ads are customized to appeal to specific groups of people, based on their interests, demographics, browsing behavior, and more. Instead of throwing ads into the vast digital void and hoping something sticks, targeted advertising allows you to hone in on the people who are most likely to buy from you.

Need an example? Here’s one.

You wouldn’t try to sell a fishing rod to someone who’s never been near a body of water, right? (Well, unless you’re really that desperate). With targeted online advertising, you’re only showing your ads to people who are actually interested in what you’re selling. This means better results for your ad spend and fewer people rolling their eyes at irrelevant ads.

How Does Targeted Advertising Work?

Okay, so how does targeted advertising work? It’s not as complex as it sounds. Targeted advertising relies on data – specifically, data about your audience’s online habits.

And no, we’re not talking about some hacker-level invasion of privacy here; this data is usually collected through cookies (the internet kind, not the chocolate chip kind). Websites track what pages people visit, what they click on, and even how long they linger over certain products. Creepy? Maybe. Effective? Absolutely.

The Advantages of Targeted Online Advertising

So, why is targeted advertising such a big deal for e-commerce businesses? In short, it’s because it works. Here are a few reasons why:

Better ROI

Instead of wasting your advertising dollars on people who will never buy from you, targeted ads focus your budget on those who are most likely to convert. Higher relevance means higher click-through rates (CTR) and ultimately, higher sales.

More Personalization

People love feeling like brands “get” them. Targeted advertising gives you the chance to create personalized messages that resonate with your audience. It’s like sending your customers a message saying, Hey, I know what you like, and I’ve got just the thing for you. Spoiler alert: they’ll appreciate that.

Increased Engagement

Generic ads tend to blend into the background like digital wallpaper, but a targeted ad that speaks directly to someone’s interests. That’s more likely to catch their attention, increase engagement, and get them clicking.

Improved Customer Experience

When customers see ads that are actually relevant to their needs, it doesn’t feel like spam – it feels helpful. And in the world of e-commerce, a positive customer experience can be the difference between a one-time buyer and a loyal repeat customer.

Fun Fact: You’re Part of the 5,000

Here’s a little trivia for you. On average, the typical person is exposed to between 4,000 and 10,000 ads per day (yes, per day). But we only really notice a fraction of them. That’s where targeted advertising has the edge – it cuts through the noise and delivers something worth noticing. You don’t want to be part of the forgettable 5,000, do you?