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424 Part Three Key System Applications for the Digital Age

benefits of using individual salespeople at dramatically lower costs. For
instance, General Motors will show a Chevrolet banner ad to women empha-
sizing safety and utility, while men will receive different ads emphasizing
power and ruggedness.
What if you are a large national advertising company with many different
clients trying to reach millions of consumers? What if you were a large global
manufacturer trying to reach potential consumers for your products? With
millions of Web sites, working with each one would be impractical. Advertising
networks solve this problem by creating a network of several thousand of the
most popular Web sites visited by millions of people, tracking the behavior
of these users across the entire network, building profiles of each user, and
then selling these profiles to advertisers. Popular Web sites download dozens
of Web tracking cookies, bugs, and beacons, which report user online behavior
to remote servers without the users’ knowledge. Looking for young, single
consumers, with college degrees, living in the Northeast, in the 18–34 age range
who are interested purchasing a European car? Not a problem. Advertising
networks can identify and deliver hundreds of thousands of people who fit this
profile and expose them to ads for European cars as they move from one Web
site to another. Estimates vary, but behaviorally targeted ads are generally 10
times more likely to produce a consumer response than a randomly chosen
banner or video ad (see Figure 10.5). So-called advertising exchanges use this
same technology to auction access to people with very specific profiles to
advertisers in a few milliseconds. In 2012, about 20 percent of online display
ads are targeted, and the rest depend on the context of the pages shoppers visit,
the estimated demographics of visitors, or so-called “blast and scatter” advertis-
ing, which is placed randomly on any available page with minimal targeting,
such as time of day or season.

FIGURE 10.5 HOW AN ADVERTISING NETWORK SUCH AS DOUBLECLICK
WORKS

Advertising networks and their use of tracking programs have become controversial among privacy
advocates because of their ability to track individual consumers across the Internet.

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