Google’s Demo Targeting: No Panacea

Last week, Google announced its full demo targeting offering. They also provided a limited list of sites where you can buy ads today based on demographics, including notables like MySpace, YouTube, Fotolog and others. On the surface, it’s worth a try by advertisers who want to reach or exclude, say, 18-24 year-olds.

It’s not a targeting panacea. First, demographics are error prone, and only as reliable as what people submitted when they signed up for services. Second, we know that age is a common factor but not the only one. The targets are expressing many interests and behaviors, yet Google can’t easily leverage them on social or multimedia sites.

Where does this leave contextual ads? Since Google targets contextual ads based on page content and semantics, this is a difficult problem to solve with sparse text. Demographics represent a refinement, given these challenges. Google will need to keep developing other approaches or workarounds for social or multimedia pages, to improve monetization.

Anyway, let’s keep an open mind about demographic targeting. Targeted buys represent a balancing act, between cost/acquisition and overall acquisition volume. Advertisers will be able to refine their buys on these social sites now — and then judge results for themselves.

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