In the online advertising chain there are usually 4 main parties:
Company with product/service they want to sell -> Advertising Agency -> Website Owner -> You
In an ideal situation, all of these people – Yes, you included – benefit from GOOD and well targeted online advertising.
Companies want to spend their advertising budget in the most effective way possible, they want to know that their ad $$ are going to showing the people who might actually want their products their ads. There really is no point showing Men an advert for Tampons for example.
Because of this companies want the advertising agencies they use to target their ads at their products target market as effectively as possible, so that their money is spent showing their ads to people who are more likely to click & buy.
It’s then the advertising agency, like Google AdWords/Adsense job to try to show that ad to people who might actually buy it.
They do this through a variety of means, in the case of Google this includes things like what you search for and perhaps even the sites you look at. This helps them build up an idea of what kind of person you are and the types of things you like.
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