Will Rogers once said, "Advertising is the art of convincing people to spend money they don't have for something they don't need." According to Will, advertising is inherently deceptive, most profitable when it hoodwinks people into paying more for something than they should.
Another view is that consumers lack information and advertising can provide information. In this view, the opportunity for deception only exists because of missing information about reputations and alternatives. If advertisements are relevant enough to inform consumers, then opportunities for deception fade.
Ultimately, whether deception or relevance is more profitable to advertisements may depend on margins versus conversion rates. Deceptive advertising tends to have high profit on each sale, but usually very low conversions. Useful advertisements will yield much tighter margins, but have a much higher volume of conversions.
One extreme example is e-mail spam, horribly deceptive advertisements with awful conversions. And the data there may give us some hope. One of the worst forms of deceptive advertising, e-mail spam, appears to be a barely profitable enterprise despite its ubiquity. This may suggest that deception does not inherently maximize profits.
Another example is search advertising. By targeting advertising closely to search keywords and intent, companies like Google have not only made search advertising very lucrative, but also relevant and useful to searchers. In search, ads are highly targeted, rarely deceptive, only occasionally annoying, and often helpful.
But most other forms of advertising remain irrelevant and annoying. The most common technique we see still is broadly blasting ads across all eyeballs. It would be good to make advertising more helpful, relevant, and useful to people. Is it possible?
For a few years now, I have worked on personalized advertising. Personalized advertising tries to make advertising more useful and relevant to people by targeting ads to individual interests and needs.
Especially recently, I have been struggling with a moral question. Let's say we build more personalization techniques and tools that allow advertisers and publishers to understand people's interests and individually target ads. How will our tools be used? Will they be used to provide better information to people about useful products and services? Or will they be used for deeper and trickier forms of deception?
For me, it is an ethical issue that cuts deep. If personalized advertising will not be used to benefit people, to improve the usefulness of advertising, then I want no part of it. It seems clear that personalization can make ads more relevant, but I fear it also could be possible to use deep knowledge of individual interests to target deceptions. Which will advertisers do? Which will be more profitable?
I am hopeful that we can improve advertising, that advertising will be most profitable for most advertisers when it is useful and relevant. I am hopeful that any deceptions will be marginalized by a flood of more useful alternatives. I remain hopeful that advertising can move toward a helpful information stream and away from the art that Will Rogers deplored.
But, to be quite honest, I sometimes have doubts about the answer, which is why I bring it up for discussion here. What do you think? Is advertising an industry fundamentally fueled by deception? Or is advertising better understood as a stream of information that, if well directed, can help people?