Is it always beneficial to show advertisements to the visitors of a website? How can firms use user profiling to make this decision? Professor Subodha Kumar writes from his research on an actual implementation at Chitika, an Internet advertising firm operating in the Boston area.
The use of the Internet as a medium to deliver promotional material to prospective customers has grown tremendously in recent years. Despite the current economic slowdown, Internet advertisement (ad) revenue in the United States increased by 15% during 2009 to reach US$26 billion in 2010. This trend is expected to continue − an estimate predicts that Internet advertising will reach US$77 billion in 2016 and will constitute 35% of all advertising spending, overtaking television advertising.