The article says 4% of revenue, not profit. Big difference.
Here’s another empirical study that shows very small differences between targeted and non-targeted ads, to audiences targeted as introverts/extroverts or high/low openness.
Targeting did increase CTR in most cases, but not all. The net gain is small – and a significant proportion of extroverts also clicked and bought things from the “introverted” ad, and vice versa. Showing that we humans are not so easily profiled and easily lead; it’s not that targeted ads are the secret ray gun that automatically make people do what advertisers want.
So, a small gain, but as the article here points out, there is a cost of doing this. From the premium for paying for the targeting to the cost of creating the tailored versions of an ad.
So it wouldn’t surprise me if this practice does not pay for itself – certainly not for all advertisers of all products. And it’s not the first time that company engages in fads that are hyped as profitable but are really counterproductive. (See: mergers, SAP, activity-based offices, treating employees like shit, etc)
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Well, they did also post a link to the actual paper.
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