Diminishing Returns of Personalization

“Still, a lot of evidence suggests that surveillance-based advertising is oversold. There is value in showing people ads for things they want, especially at the exact moment they are considering making a purchase. This is what Google tries to do with Adwords, its service that places ads next to search results. It’s what all retailers try to do with “people who bought this also bought this” advertising. But these sorts of things are based on minimal surveillance.

What’s unclear is how much more data helps. There is value in knowing broad personal details about people: They’re gay, they’re getting married, they’re thinking about taking tropical vacation, they have a certain income level. And while it might be very valuable for a car company to know that you’re interested in an SUV and not a convertible, it’s only marginally more valuable to know that you prefer the blue one to the green one. And it’s less valuable to know that you have two kids, one of whom still needs a car seat. Or that one of the kids died in a car crash. Yes, a dealer would push the larger SUV in the first instance and tout safety in the second, but there are diminishing returns. And advertising that’s too targeted feels creepy and risks turning customers off.”

– Bruce Schneier, “Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World” (2015)