2. Advertisers use different kinds of “profiles” in the decision to display ads to customers. Identify the different kinds of profiles described in this case, and explain why they are relevant to online display advertising.

The holy grail of advertising and marketing is to deliver the right message to the right person at the right time. If this were possible, no one would receive ads they did not want to see, and then no advertising dollars would be wasted, reducing the costs to end users and increasing the efficiency of each ad dollar. In the physical world, only a very rough approximation of this ideal is possible.

Advertisers buy television and radio spots, newspaper ads, and billboards based on broad demographics, and the context in which the ad will be shown.

The Internet promised to change this traditional method of buying ad space by allowing advertisers to gather personal information on consumers through the use of cookies placed on the user's browser, which tracked behavior and purchases online and could be matched with offline information as well. Advertisers could then use this information to target ads to just the desired individuals they were seeking, based on personal characteristics, interests, and recent clickstream behavior. From the beginning, e-commerce was a trade-off for consumers between privacy and efficiency: let us know more about you, and we will show you only the advertising and products you are interested in seeing and would be likely to respond to. For brands, the promise was scale and cost: let us know who you are looking for and we will find millions of people on thousands of websites that fit your criteria. E-commerce was supposed to end the mass advertising that began in 19th century newspapers, 20th century radio, and exploded with the growth of television.