By Jessica Guynn
Los Angeles Times
Social networks have found a promising new source of advertising revenue: targeting users with ads for products they browsed online.
The latest form of advertising, called “retargeting,” is expected to not only get more pervasive but intensify worries over privacy.
Tania Mulry, an entrepreneur from Santa Clarita, Calif., said she and other people are noticing and talking about the flood of retargeting ads. One of Mulry’s students in a mobile-application design class at the University of Southern California was unnerved that a swimsuit she browsed on Nordstrom.com showed up as an ad on her Facebook page.
“As a consumer, seeing something you were looking at recently on another site is eye-catching, and then the deep sense of creepiness sets in like an ominous fog and you realize that big companies are watching what you do online,” Mulry said.
Most people are aware they are being watched and tracked online. They also know that the marketers who are tracking their movements are going to show them ads tailored to their interests. But many say it’s creepy when an ad for the product they eyed on one website begins popping up on Facebook. Analysts say these ads are only going to proliferate because they are potentially very lucrative for social networks under pressure from investors to wring more revenue from users.
“Especially in the holiday season, anything that can get your attention and get you to go back to a website and make a purchase you might have forgotten about or aren’t sure about is gold for a retailer,” said Emarketer analyst Debra Aho Williamson.
Twitter Inc. said last week that it is rolling out retargeting ads for its more than 230 million active users.
On the heels of its highly successful initial public offering last month, Twitter is hoping to impress Wall Street, which has expressed doubts about its ability to grow revenue and turn a profit. Twitter is looking for new ways to persuade advertisers it can show the right ad to the right user at the right time on the Web and on mobile devices.