Online advertising is a tried and true form of reaching new customers. You pay a few dollars and can place a text or banner advertisement on any one or more of web sites. Maybe you want to reach dog owners for a new leash you are selling. You could advertise on web sites that cater to dog owners.
However, there's now even more you can do. Companies are aggregating and collecting data to better profile individual web users.
The New York Times writes: The result is a sea change in the way consumers encounter the Web. Not only will people see customized advertising, they will see different versions of Web sites from other consumers and even receive different discount offers while shopping — all based on information from their offline history.
Two women in adjoining offices could go to the same cosmetic site, but one might see a $300 Missoni perfume, the other the house-brand lipstick on sale for $2.
The technology that makes the connection is nothing new — it is a tiny piece of code called a cookie that is placed on a hard drive. But the information it holds is. And it is all done invisibly.
What does this mean for small business owners?
It means two things.
(1) Instead of just advertising on web sites that you think fit your audience profile, you can consider more precisely the person you are looking to target (white males, who like tennis and live in Miami; Hispanic females who buy flowers, live in Minnesota and eat Southern fried chicken)
(2) the reverse of this more targeted advertising is that you can find out more about WHO has been clicking your advertisements; using this information you might find out you need to correct your more traditional advertisements and/or your sales tactics.
Another benefit of very targeted online advertising is to help you better refine your offline advertising. Maybe you are sending direct mail pieces to a particular demographic in a particular zip code. What if your online advertising analysis indicates that in fact another zip code and demographic are actually responding better. You now have hard data to amend your offline advertising.