Is this a familiar feeling? You’re thinking about a product or a service you might need. Nobody’s around. Just you in the company of your thoughts.

I’d really want to start a podcast. But can I afford a good mic?

And after a while, it appears. A podcast microphone advertisement tailored just for you on your social media feed. Out of the blue! After you process what just happened, you start to wonder…

Is the internet stalking me? Is someone reading my mind?

And believe it or not, the answer is – yes! But not in the way you might think. This is not telepathy (at least not yet), and there aren’t any literal mind readers around.

You’ve just become a potential customer in a detailed, data-driven process of targeted advertising.

So what is targeted advertising? How to utilize it correctly in your advertising campaigns and increase conversion rate? It’s easier than you think. Let’s get to the point.

What Is Targeted Advertising?

Targeted advertising is a type of online advertising that leverages online user data to deliver ads in front of the right audience.

The data can include age, gender, social status, spending power, recent browsing habits, and long-term interests.

If you’ve ever seen an ad or Shopify landing page that almost seems like it was made just for you, that’s because in a way it was.

Yes, that’s right. The internet knows you that well.

That’s an Invasion Of Privacy, No?

There’s a case to be made that online user tracking is an invasion of privacy.

After all, we’ve already seen multiple attempts to regulate online privacy laws (The Cookie Law, iOS privacy update, California OPPA, etc.). And that’s only the beginning.

READ MORE >> Third-party cookies are on their way out, but what happens after?

targeted ads on ios14
Apple asking users to allow Facebook tracking. You can guess the usual outcome.

However, there’s still no way for users to completely hide their data.

Take Facebook, for example. Your account is already filled with information—interests, pages, workplace, location, age—all are data ready to harvest.

Most websites already utilize tracking tools that marketing platforms benefit from. The same happens whenever you leave your email address online.

In the end, it’s all information for a perfectly tailored ad placement.

But don’t panic yet. Future privacy regulations will do a better job in keeping your online avatar under an invisible cloak.

However, big tech companies will always find a way to salvage some of the data. Even if it means “clustering” users instead of tracking them individually (see Google FLoC).

Benefits of Targeted Ads

Targeted ads have revolutionized advertising. Never before was it so easy to get your product or service in front of so many prospective customers.

In the past, you had to cast a wide net to capture as many interested people as possible. However, this practice wasn’t efficient for small and/or narrow-niche services.

targeted advertising in pratice
AdWorld conference breaking the advertising fourth wall. “We’re targeting you and there’s nothing you can do”

Thanks to the internet (and particularly social media), now you can find interested parties in a matter of seconds.

And here are some of the reasons you can benefit from it.

Precision

Targeted advertising helped business get their products or services in front of their ideal audience.

Let’s say you’re selling a fitness supplement. You can use all available online user data to serve a targeted ad to only people interested in fitness and supplementation.

The internet already knows which users are interested in fitness, gym, sports activities. So it can extract their browsing patterns to see whether they’ve already shown intent to buy a similar product.

On top of that, you can place different ads to users on a different stage of their customer journey!

Cost Efficiency

Targeted ads are way cheaper than traditional advertising.

You don’t have to overspend in the hope a handful of right people will see your message. What you do instead is bringing the ad directly to those who are already inclined to notice it.

Even minimal targeting, like the type available from Google Discovery campaigns, is vastly superior to advertising with no focus.

Also, you don’t compete with the industry heavyweights for a fraction of advertising space. Your competitors are usually small businesses in a similar industry with similar spending power.

Therefore, the cost of ad real estate is significantly lower.

Tip: Optimizing targeted ads and getting them in front of the right audience can further cut your advertising costs. 🎯

Quick Wins

In today’s online business, stagnation usually means decline. You can’t afford to stay behind as you’re allowing your peers to take advantage.

So despite SEO and content marketing bringing mouthwatering revenue in the long run, some businesses can’t afford the wait.

Investing in targeted ads, on the other hand, brings quick returns and accelerates customer acquisition.

That’s precisely why businesses rely on online ads ROI (or ROAS) to streamline their scaling process.

High Conversion Rate

Targeted advertisements usually have a higher conversion rate than any other ads. 

And that makes sense if you think about it: when you place the right ads in front of the right customers, there’s a higher chance that they’ll buy.

image showing how targeted advertising increases conversion rate

Remarketing Opportunity

Remarketing is a crucial part of the sales funnel and goes hand in hand with targeted ads.

Despite having a higher conversion rate, it’s impossible for every user to convert after seeing a targeted ad immediately.

Usually, they’ll first engage with your ad in some way, visit your website, or even subscribe to your email list.

The issue is, potential customers are quick to forget products and services they see online. So you’ll have to “remind” them by targeting them again.

Targeted ads fill these “remarketing buckets” with a highly accurate pool of customers likely to convert soon.

image showing targeted advertising impacts remarketing

Data-Driven

Targeted advertising can provide incredibly accurate data you can use to optimize the performance of your campaigns.

Advertisers leverage these testing opportunities to increase the quality of their ads and show them to the right people.

This, in return, lowers the costs of the ads and improves vital performance metrics.

Most advertising platforms (from Google to TikTok to Facebook) have ad management and analytics tools.

image of facebook targeted advertising options
Facebook’s ad manager is one of the most powerful targeting tools

And you still wonder why everyone’s trying to find new innovative ways to track data?

Types of Targeted Advertising

Targeted advertising is getting more complex and segmented by the day.

Here are some popular types of targeted ads used in marketing campaigns:

Demographic Targeting

Demographic targeting emphasizes the personal traits of a potential customer—their age, gender, religion, social status, income, level of education, and more.

On top of being the most popular, they’re the easiest to get hold of, with users willingly providing them. How? Check your or your friends’ social media profiles. 

image of facebook account highlighting personal data for targeted advertising
Employment, education, location, gender, age… It’s all there on your social media accounts.

You can reach customers based on their activities on Google by using Detailed Demographics. Depending on their activities, certain aspects of their lives may be revealed, such as parenting status, homeownership status, marital status, and educational status.

Behavioral Targeting

Behavioral targeting is one of the most common advertising types.

It means segmenting your audience depending on their browsing behavior. This includes browser history, activity on social media, ad engagement, and more.

Advertising platforms would cluster users with similar behavior and create new groups you can target—for instance, lookalike audiences on Facebook.

Contextual Targeting

Contextual targeting means displaying the message a message appropriate advertising context.

This means that you’ll see a kitchenware ad on a kitchen/recipe blog or a gaming equipment ad on your favorite gaming streamer’s profile.

Moreover, advertisers often make a contextual advertisement and tie it to a particular keyword. That ad will then appear on the website that’s related to that keyword.

Retargeting

Retargeting (or remarketing) means reusing available data to target potential customers with ads.

You can do it by utilizing the custom audiences option (e.g., on Facebook), including users from email lists, implementing third-party API, and more.

With retargeting, you’re banking on users already familiar with your brand and just need that extra step before conversion.

Geotargeting

Geotargeting (or location targeting) displays ads only for users based on a specific location. For example, it can be a part of the city, a region, a nation, or even a continent.

This also means you can exclude only specific locations from your advertising campaigns.

image conceptually depciting geographical ad targeting (geotargeting)

If you’re a local consulting agency or an eCommerce store shipping only in Australia, why would you waste money targeting people you cannot service?

Time Targeting

Running ads can sometimes be worthwhile only during a particular time of the day.

For that reason, some advertising platforms (especially on social media) allow marketers to pick a time when their ads will be active.

Local stores and service businesses that have fixed working hours and require in-person touchpoints could benefit from time targeting.

Device Targeting

Device targeting will target only people that are seeing the ad from a specific device.

Theoretically, if you advertise an iOS-only app, you don’t want people using Windows or Android to see that ad.

They aren’t your target audience, and you’ll just waste money.

Third-Party Targeting

Many third-party data providers gather customer data throughout the web and resell it to marketing companies.

Companies such as BlueKai or MediaMath rely on cookies to acquire as much data about their website visitors as possible.

image showing how website visits can be used to build a user avatar for  targeted advertising
Third-party marketing data companies use sophisticated methods to create customer profiles.

For example, a person visits their favorite sports news website, then proceeds to check a blog on high-end cars, and makes a big purchase on an eCommerce website.

This creates a high-income luxurious sports car enthusiast profile for an automotive brand.

Keyword (Search Intent) Targeting

People mostly associate search intent with SEO optimization. However, the keywords that you input in your search engines are also data for targeted advertising.

Search engine ad platforms will consider these keywords when displaying ads in the future. Hence there’s so much “bidding” on keywords going on in pay-per-click advertising.

targeted advertising using search engine

But more on that later.

Different Platforms For Targeted Ads

As you know, there’s no scarcity of advertising channels in digital marketing. You just have to know how to pick the most profitable ones.

Paid Social Targeted Advertising

Social media has some of the most sophisticated tools when it comes to targeting.

For instance, Facebook (the undisputed king of paid social advertising) offers various targeting options for its near-3 billion active user base.

You can easily target any of the above types while also creating custom targeting lists, focusing on website visitors or similar (lookalike) audiences.

Need help creating, optimizing, and managing Google ads?

Meticulous data tracking combined with detailed analytics provides a fruitful playground for digital advertisers.

Using this information properly can help you optimize your campaigns and increase conversions while lowering the price.

Other social media platforms like Instagram (a part of FB), Snapchat, TikTok, Pinterest, and others offer similar tracking and optimization capabilities.

PPC Advertising (Search Engine Ads)

Search engines like Google and Bing are advertising powerhouses. They provide numerous ways to get your product or service in front of your prospects.

Search ads (based on search intent) are focused on your search intent and usually show up first on the results page.

There are also display ads that will show up in various hotspots on the website and video ads (don’t forget that Google owns YouTube). And that’s just the tip of the iceberg.

image google campaign type choices

Because of all these different targeting options, PPC is regarded as one of the most effective advertising types.

Content Discovery & Native Targeted Advertising

Discovery platforms such as Taboola provide ad placements on influencer publisher websites.

These platforms will usually promote your content alongside organic articles in the “recommended for you” section.

Native ads’ appearance doesn’t differ much from the other suggested posts on the page, hence the “native” name.

image of display ads grid using targeted advertising

Like Google display ads, these ads will use tracking data to find their way to the right audience.

Time to Hit the Bullseye

Targeted advertising is the most efficient and quick way to start getting conversions and grow your brand.

However, don’t rush into it just because you think it’s a certified ROI.

Make sure you first research your market as much as possible and create your ideal customer avatar.

Only after you know who to target should you start running and optimizing your campaigns for best results.

If you’re unsure how to start your targeted campaigns, feel free to reach out. After a decade in paid advertising, we’ve reached Hawkeye’s level of precision. 🏹

Also, if you have any questions regarding your campaigns (things are still a bit messy post-iOS), feel free to ask us or leave a comment below. We respond to each one, you know.

Frequent Questions

Is Targeted Advertising Good?

Yes, targeted advertising is good. It’s one of the most efficient, cost-effective, and predictable forms of advertising.

However, the ethical question of targeted advertising is still up in the air. Hopefully, future regulations and technical advancements will find a balance between user privacy and accurate targeting.

How Can Targeted Advertising Work?

Targeted advertising relies on data tracking.

The internet will pick up all your online behavior: websites that you visit, search queries, social media info, engagement, and form your user avatar.

Advertising companies will use that data to target you with the best possible ads.

What Is a Targeted Ad? Give an Example?

A targeted ad is an ad tailored to specific users whose online behavior matches the brand’s ideal customer avatar.

For example, if you’ve spent some time browsing the best headsets to buy, you’ll likely see a headset brand advertised on your social media feed or Google.

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