How Does Custom Advertisement Work? A Complete Guide

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We have all been a victim of searching for the latest iPhone release and then hopping onto Facebook just to see an advertisement for the new iPhone. You may think this is a mind-reading trick, but in reality, it's the effectiveness of custom advertisements.

If you're confused as to why ads for items you just search pop up everywhere else, you're in the right place. Below we answer what targeted advertisements are and look at them from a user and business point of view. 


What Is a Custom Advertisement?

A custom advertisement is also known as targeted advertising. Target advertisements have been on the internet since the late 1990s but have become more advanced in recent years.

Companies hone in on browsing habits and use data collected from users via the internet. By using this data they can place advertisements in your various channels in regards to what they think will appeal to you.

So let's say you're looking online for a new pair of sneakers. After browsing for a few minutes you decide to go on Instagram or check your Facebook. While scrolling through social media you may see advertisements for the shoes you were looking at or similar styles.

When you stumble upon these similar ads it means you have become a victim of targeted ads. By using the information collected from your recent searches and browsing history, companies have decided that their shoe ads tailor to you specifically and hope you will see it and then buy their product.


What Types Of Data Do Companies Look At?

To place the best ads in front of you that appeal to your interests, companies must know what you're interested in. There are a few ways for brands to get this information.

Your Profile

Whenever you create a social media profile (such as Twitter, Facebook, and Instagram to name a few) you're required to give some personal information to create your account. This personal information can be things such as your age, religion, address, phone number, education, political views, favorite things, and interests.

You initially give this information to allow friends to know a bit more about you. But these social media platforms use this personal information given to help aid targeted advertising.

What You Buy

When shopping on a platform such as Amazon it's easy to stumble upon their recommended items section. This feature isn't limited to the beast that is Amazon but is popping up on small business websites as well as other major retailers.

These recommended items are placed in front of you due to the past data collected.  The data that is collected is through cookies and account creation or registration. By keeping track of what you previously bought, outfitters will place similar items in front of you, hoping to make a sale. 

What You Click On

In today's advertising, there is a term called clickstream. Clickstream refers to the record of web pages you visit. This data is monitored and recorded through the cookie files (tiny text files on a website).

Cookies are sent to your computer by the website so they can monitor how you interact with their webpage. You can either have first-party cookies track your movements (these are sent by the website host) or third-party cookies (sent by the advertiser on the website). 

The information collected by cookies will be used to place ads tailored to your tastes. These ads will appear on social media, other websites, and even search engines. 

What You Search For

When most people cruise the internet they use a search engine to help find exactly what they are looking for. Since search engines such as Google, Yahoo, and Bing are big and popular, it's no wonder that they use advertisements. 

Search engines keep track of what you search and analyze it as data. These searches can also correspond closely with your habits, making it easy for the search engine to place targeted advertisements in your way.


How Custom Advertisements Work For Different Platforms

We have given you an overview of custom advertising from the user's perspective above, but what about targeted advertising from the view of marketers? Below we dive into the other side of targeted advertising and show how each platform is different when it comes to targeted advertising. 

Google Ads

This may be one of the most familiar forms of advertising for you. Whenever you search something on Google or cruise a link you found from your Google search, you're bound to see a Google advertisement. 

What Are Google Ads?

Google Ads is an application by Google that launched in 2000. It is a combination of all of Google's advertising channels such as YouTube, the search network, and the display network.

The search network displays your advertisement at the top of Google's search result page. On YouTube, your ad will play before or during a video, and the display network positions your ad as a banner on a website.

What Sets Google Ads Apart?

Google Ads makes it easy to create a campaign and target it to a specific audience. You can even create your own audience profile that will be used to place ads in front of consumers in the demographic you choose.

Google Ads is versatile and can be used by anyone. If you're on the consumer end and notice a lot of small business advertisements it's most likely due to your recent searches and the business' targeted demographic, which you fall in.

Google Ads lets the creator be in control. They will set their own budget and decide who their ad should be targeted to and how they want it to appear across the web. The ability to be in control of your whole campaign is what sets Google Ads apart from others.


Facebook Advertisements

Facebook Ads are familiar to those who use the social media service regularly. If you've ever watched a video with an ad or saw an advertisement pop up on your feed, you've been subjected to a Facebook advertisement.

What Are Facebook Ads?

Just like Google, Facebook offers its own marketing package for users. The difference between Google and Facebook is that Facebook is only limited to their platform and not the whole internet.

This may seem like a disadvantage, but Facebook has thousands of users that access the platform anywhere. Thanks to smartphones your ads can be at the fingertips of those browsing their feeds.

How Do Facebook Ads Work?

All of Facebook's ad campaigns are run through their ad manager that can be found on the Facebook website. When creating an ad with this manager, they will first ask you what the goal of your advertisement will be. By answering this question Facebook will properly place the ad in front of users to help meet your goal.

After selecting the goal of your campaign it will then be time to enter your budget and decide what target audience you want to reach. Your target audience can be a certain age group, people interested in certain things and so on.

For example, if you need tips to target moms with Facebook ads, you can begin by creating a demographic between 25 and 50 and then make the interest your product or service. After choosing your mom demographic you will then be asked to upload or create your ad to market to these Facebook moms. After creating the perfect, eye-catching advertisement Facebook will ask where you want it placed on their website.

Just like any other advertising interface, you will be able to review your campaign's stats. Facebook will tell you things like how many people have seen your ad and how many people interacted with it.


Instagram Advertisements

You know when you're scrolling through pictures and a picture advertisement pops up in between your friend's posts? What about when you're watching story after story but are interrupted in between them for a quick ad? These are all examples of Instagram ads and if either of them sounds familiar you've most likely seen them. 

What Are Instagram Ads?

Just like any other ad campaign, Instagram ads are another method of paying to post your sponsored content on the platform. What makes Instagram stand out from other ad campaigns is that it's more visual. Unlike Google and Facebook where you can add text to make your ad stand out and be more appealing, Instragam is all about what looks good to the consumer's eye and little to no text is needed.

Ads placed on Instagram will appear in one of two places, a user's feed or in between story views. These ads are placed strategically and will encourage the user to click either sending them directly to your website to secure a sale or to the business' profile to generate more interest.

Instagram ads are known for reaching a wider audience thanks to their 800 million active users and generating sales from those who may divert from the targeted audience. Instagram ads are a great way to appeal to new customers and see how big you can expand your target audience. 

How Do Instagram Ads Work?

Since Instagram's parent company is Facebook, they use the same marketing interface. So if you have ads running on Facebook and are familiar with the layout of their manager you will find no learning curves in Instagram's manager.

When creating an ad campaign on Instagram you will be redirected to Facebook to use their ad manager. Just like setting up a Facebook ad campaign, you will be asked similar questions. You must specify what the goal of your campaign is and then create a target audience.

Keep in mind that Instagram is used by a younger generation, usually below 30. When creating your target audience know what platform your ad will appear on and create an audience accordingly to be effective.

After answering questions geared towards the specifics of your campaign, it's now time to select your ad placement. You may have your ad placed in either the feed or between stories. You can even select both options for maximum exposure.

After selecting placement you will be required to enter the budget you wish to spend on the campaign. After specifying how much you want to spend it's time to have your targeted advertisement go live.


Is Collected Data An Invasion Of Privacy?

You now have an overview of targeted advertising from a business and user perspective. Now it's time to look into that data that's being collected from you constantly.

The companies using targeted advertising are using data from millions of people over the world to make a sale. Even though there is negative attention around cookies (especially third-party cookies) they are harmless. 

Cookies can't put viruses on your computer and can't look into your hard drive to gain valuable information. As we stated above cookies are simple text files that can only be read by the website that sent them to your computer. They are used to gather information from the website and that's it.

Overall the data collected from you is mostly habits. This means that no valuable or personal information is being collected from you, but how many times you search for cute puppies is.

The data collection for ads is harmless overall and if you would like to disable cookies you can on any website to protect your privacy. It's good to keep in mind that there are laws in place to also keep your data secure. 


You're Now A Custom Advertisement Pro

We have taken a look at custom advertisements from a user and business perspective. You now have an understanding as to why targeted ads appear on your Facebook and how companies go about creating custom advertisements.

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