targeted advertising

With the advance of information technology, more and more firms start to use targeted advertisement in their digital marketing strategy to improve the effectiveness of advertising. For example, Amazon will display the products on the front page based on the user’s browsing and purchasing history. Netflix will recommend movies to the users based on their reviews of watched movies. The advantage of targeted advertising vs. traditional advertising is a higher response rate as the advertising is tailored to the consumer’s preference instead of broadcasted uniformly to each consumer.

Successful targeted advertising requires intensive study of the market trend and consumer’s behavior. The emergence of Big Data makes it possible for the company to get more detailed and more accurate information to come up better targeted advertising strategy. The use of Big Data in targeted advertising needs three components. First, the company needs to collect vast amount relevant information such as purchasing history, browsing history and their social network activities. Second, the company needs to establish the Big Data system so that the data can be stored and processed in an efficient way. Third, the company needs to perform analysis on the available data and come up with right strategy, using state-of-the-art technologies such as machine learning, neural networks, etc.