Marketing firms are increasingly looking to tailor advertising to consumers based on a growing pool of data on customer spending habits, interests and demographics, marketing professors say.
Targeted advertising is more effective than simply marketing to the masses — and companies look to make the most of ad expenditures, especially in tough economic times, said Cheryl Burke Jarvis, a marketing professor at the W. P. Carey School of Business.
For many companies, the advertising mentality used to be “we know half our advertising dollars are going to waste — we just don’t know what half,” Jarvis said.
With better data collection technology available, cell phone companies and social media Web sites like Facebook and MySpace have much more information about individual people — like purchasing habits, demographics, personal interests and other data, she said. This allows advertising messages to be made specific for viewers, Jarvis said.
“Your telephone company probably has something like 250 pieces of information about you that can be anything from purchasing patterns [to] lifestyle, call records,” she said.
The increases in targeted marketing present some privacy concerns and could lead to federal legislation, she said.
And while it is effective to advertise using income and personal interest data, customers could be turned off by companies having too much information, Jarvis said.
“I don’t know that customers want to have relationships with every firm they do business with,” she said.
With an increased emphasis on marketing to a target audience, the W. P. Carey School has adapted some of its classes to teach students about new technology to better reach customers, Jarvis said.
Jarvis, who teaches an upper division market research class, said the course has been revamped over the past few years to educate students about the newer technology associated with database marketing.
Techniques for gathering information about customers are growing more and more sophisticated, and the W. P. Carey School’s marketing program is looking to remain on the cutting edge of the field, she said.
Marketing databases now can include complicated pieces of information on a consumer such as his or her type of car, lifestyle, number of children, income and other pieces of information, she said.
And customers are becoming more used to firms tailoring advertisements based on that information, she said.
Justice studies sophomore Kory Boeckler said he used to be surprised when he logged onto Facebook and saw advertisements targeted to his specific interests.
Now he considers it normal, he said. And the privacy aspect does not concern him, he said, because he chose to make his interests available publicly on his Facebook profile.
“I don’t think there is any privacy [online],” he said.
While Boeckler said he does not pay attention to Facebook advertisements, he said television commercials can have an effect on his purchasing habits.
But marketing professor Michael Wiles said traditional advertising, like broadcasting a commercial to a wide audience, can be less effective than it was just a decade ago.
The increased pressure on marketing firms to be accountable for the money they spend means more advertising has to be justified with results, Wiles said.
Traditional marketing to a widespread audience compared can be compared to targeted advertising is sometimes called the “hatchet vs. scalpel” approach, he said.
“Consumers are becoming more adept to avoiding those messages,” Wiles said.
Reach the reporter at matt.culbertson@asu.edu.
