Advertisements are everywhere. Traditional ads appear on billboards and road signs, where they can reach the largest number of people in an area. You see them in newspapers and magazines, where they can appeal to a large or niche readership. They serve as a way for people selling products to connect with others who may need, or want, to buy.

Targeted ads go further. They go after you specifically in order to deliver ads for products you're more likely to want, scooping up vast amounts of information about you in the process.

What Are Targeted Ads?

Technically, all ads are targeted ads. Billboards target drivers in a major metropolitan area or potential tourists passing through a more scenic area. Radio ads target people of a certain ethnic background or religious affiliation. But to place these kinds of ads, advertisers don't have to know anything about you specifically.

If traditional ads are passive, targeted ads are the opposite. Advertisers, or ad networks, actively seek information about customers in order to reach the specific audience they're after. That means they gather data specific to you, rather than your region or neighborhood.

Targeted ads power much of the web. Their effectiveness has driven advertisers away from many traditional forms of media, such as print newspapers. This means more people are out there collecting and sharing more information about us, typically without our awareness or consent.

It's for this reason that targeted ads have expanded from being an economic issue to one of security and privacy as well.

Offline Targeted Ads

Before we discuss targeted ads online, let's take a step back. Have you checked your mailbox lately? There's a good chance that you will mostly find junk mail. While some of these ads go out to everyone in your area, others are targeted. They're sent out specifically for people like you.

To send out junk mail, companies or organizations just need your name, address, information about your neighborhood, or basic demographic information such as your age or whether you have kids.

Oftentimes companies get this information from other companies. A magazine may share your address with other companies that sell similar publications or products. Organizations may also tap into public records. Insurance companies access your motor vehicle record, for example.

And when a lawyer sends you a letter advertising their services after you get a speeding ticket, you can bet that offer didn't go out to everyone on your block.

Online Targeted Ads and Tracking Cookies

Targeted ads use a different playbook online. There, advertisers can track you around the web, learning what sites you like to visit and which products you buy.

To follow you, online ads rely on cookies. Cookies are small files that allow a site to remember information in between visits. This way a site can remember that you've signed into an account or added items to a cart. They're a necessary part of the way the web currently works.

Ad networks use cookies to determine which ads you see. These cookies keep tabs on which sites you visit and develop a profile of you over time, allowing advertisers to send ever more precise ads. Google, which provides the largest online ad network, combines cookie data with the information associated with your Google account.

This can include your web searches, Google Maps trips, YouTube watch history, and your installed Android apps.

Ad networks can gather even more data on mobile devices, especially on Android. Thanks to built-in GPS and other forms of location tracking, apps can track where you go when you're not sitting in front of a computer.

Targeted Ads and Privacy

Online targeted ads have become increasingly controversial, due in part to what companies do in order to grow these massive networks. Google, Facebook, Twitter, and others suck up large amounts of data about us in order to promise their advertisers the ability to deliver hyper-targeted ads that are more likely to hit potential buyers than the competition.

Tech companies design products to encourage you to make bad privacy decisions and give them more information.

These actions have far reaching social impacts. We can now detect and target the most depressed, lonely, or outraged people in society. People are becoming more addicted to various forms of media, and our views have become more extreme or polarized than they may have otherwise been.

So when we discuss privacy concerns regarding social media, search engines, music or video streaming services, and the like, targeted ads are the crux of the issue. Facebook wouldn't have a Cambridge Analytical scandal if the company weren't trying to sell more ads and increase profits.

Targeted Ads Are Spreading

Take television. TV ads traditionally aim at a channel's entire viewership, just like radio. Want to target men, women, sports fans, or children (however unethical this may be)? There are channels where your ad can do just that.

But in the age of hyper-targeted ads, cable and satellite providers are doing more to attract advertisers. They're now delivering targeted ads of their own. You and your neighbor may watch the same channel at the same time, but you won't necessarily see the same ads.

Cable and satellite providers start with an approach akin to traditional mail. They have your name, address, and general demographic information such as the number of people living in your household. They can't target down to the individual level, since they don't know when you're watching TV or when it's your spouse, roommate, or child.

But that doesn't mean the tracking isn't as invasive. Cable boxes not only bring shows into your house, they also send out a record of all the shows you watch.

Targeted ads are even starting to encroach more into our physical surroundings. Retailers are using our phone's built-in Wi-Fi and facial recognition to track us around their stores. Walgreens stores are testing a line of "smart" coolers, fridges equipped with screens and cameras that can advertise products based on your age or gender.

The Future of Targeted Ads

Data collection is a prerequisite to delivering targeted ads, so their use will inherently stir up privacy concerns. Ad companies are incentivized to collect and share as much data as they can, with safeguarding this information only a secondary issue at best. Breaches are a concern largely because of the potential fallout to a company's brand.

On the flip side, targeted ads make it easier for you to find the kind of product you're interested in. And quite frankly, they work. People are shifting toward this form of advertising because it's increasing sales. The degree to which consumer concerns exist hasn't been enough to substantially reduce profits.

So without economic or regulatory repercussions, don't expect targeted ads to go away. But with other types of bad ads, there may be some hope.

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