Google To Start Behavioral Ad Targeting

Posted by: Rob Hof on March 11, 2009

Google today will step into an emerging but controversial method of targeting ads to people’s interests and online behaviors. This morning, the company announced it will begin offering these ads using what is known as behavioral targeting, which lets advertisers pitch online ads to people wherever they’re browsing based on what kinds of sites they’ve visited before. “We’re looking to make ads even more interesting,” says Brad Bender, a Google product management director.

To date, Google has not employed such targeting. Chief Executive Eric Schmidt has expressed deep reservations about behavioral targeting in the past. But his concerns centered on the hidden nature of much of the targeting to date. And Google’s brand of targeting, which it calls interest-based advertising to avoid the negative connotation behavioral targeting has acquired, will give users an unusual amount of control over whether and how they’re tracked and targeted.

Behavioral targeting, used by sites such as Yahoo and middlemen known as ad networks that brokers ads to most Web sites, uses electronic markers on people’s Web browsers called cookies to track what sites people visit. If a person has visited several car sites, for example, General Motors might be very interested in targeting an ad to her, even when she’s visiting other sites. Or if someone placed a cell phone in an Amazon.com shopping cart but didn’t buy it, he might be served an ad for that phone on other sites.

Google’s targeting involves placing people—or more accurately, their Web browser, minus personal information—into one or more of 600 categories, such as baseball fan or luxury car seeker. In the first couple of weeks of the program, which is in test mode, 20 to 50 advertisers approved by Google will run the ads, though the program will roll out much more widely later this year.

The targeting, which won’t include information from people’s Google searches, will occur on Google’s content network, the thousands of sites where the search giant places text and pictorial display ads related to the content of those pages. Unlike Google’s search ads, which appear next to search results and therefore indicate overt interest in a topic or products, display ads often are not targeted to people’s interests. As a result, to advertisers’ increasing dismay, they’re often ignored.

Analysts say Google’s move should help the company make a larger splash in the $8 billion display ad market, of which it has less than a 2% share, nearly all on its YouTube video site. Scott Kessler, an analyst with Standard & Poors, said it’s unlikely to have a significant impact on Google’s revenues this year. But in coming years, he added, “This has real revenue potential. It should also have a favorable impact on profit margins.”

Susan Wojkicki, Google’s vice president of product management, wrote on the official Google blog this morning that the targeting fits with the notion of Google cofounders Sergey Brin and Larry Page that ads can and should be at least as useful to people as search results and other online content:


We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching “interest-based” advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest — say sports, gardening, cars, pets — with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads.

We believe there is real value to seeing ads about the things that interest you. If, for example, you love adventure travel and therefore visit adventure travel sites, Google could show you more ads for activities like hiking trips to Patagonia or African safaris. While interest-based advertising can infer your interest in adventure travel from the websites you visit, you can also choose your favorite categories, or tell us which categories you don’t want to see ads for. Interest-based advertising also helps advertisers tailor ads for you based on your previous interactions with them, such as visits to their websites. So if you visit an online sports store, you may later be shown ads on other websites offering you a discount on running shoes during that store’s upcoming sale.


The idea is that if these ads can be targeted to people’s apparent interests, they will be more useful to those people and they will click on them or otherwise respond to them instead of ignoring them. Of course, Google, and many other companies using behavioral targeting, hope that they will be able to charge more for such ads. As rates for display ads have dropped in recent years, many companies have been hoping behavioral targeting would help reverse the trend.

In the last couple of years, however, behavioral targeting itself has been targeted by privacy and consumer advocates. They worry that people’s personal interests could be violated and that targeting tactics could more easily woo them into buying more products.

Google, which bought the online ad placement firm DoubleClick last year as part of a planned move into display ads, is taking several steps to avoid what some call the “Truman Show moment,” after the movie in which the Jim Carrey character suddenly discovers he’s the star of a long-running TV show in which his every move was tracked and watched by millions. As the Google blog post explains in more detail:


* Transparency - We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. You can click on the labels to get more information about how we serve ads, and the information we use to show you ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google’s ad serving.

* Choice - We have built a tool called Ads Preferences Manager, which lets you view, delete, or add interest categories associated with your browser so that you can receive ads that are more interesting to you.

* Control - You can always opt out of the advertising cookie for the AdSense partner network here. To make sure that your opt-out decision is respected (and isn’t deleted if you clear the cookies from your browser), we have designed a plug-in for your browser that maintains your opt-out choice.


But privacy groups think that’s still not enough. Jeff Chester, executive director of the public policy group Center for Digital Democracy, said that while giving people access to their data profiles is a “step forward,” he views it as the company trying to “dodge a privacy regulation bullet.” Indeed, there are moves in Congress to set rules on behavioral targeting.

Chester said he would prefer that Google and others require people to opt in to being targeted rather than be forced to find the way to opt out. He also plans to ask Google not to target anyone under 18 and to describe in more detail the methods by which it targets.

No doubt Google, already under a microscope for its dominance in search advertising, will be watched closely as it moves into this controversial new area of targeting. It will have to avoid a number of privacy pitfalls to maintain the trust of its users. Indeed, Google took the offensive this morning with a post on its public policy blog by deputy general counsel Nicole Wong outlining the “transparency and choice” Google says it’s offering with its own brand of targeting.

All this isn’t entirely altruistic on Google’s part. As Stacey Higginbotham points out at GigaOm, Google also gets a lot of proprietary data on people’s preferences when they add or subtract category preferences. That may be good for people as well, but make no mistake that it gives Google an advantage over other ad systems.

So Google’s moves likely won’t mollify critics much. But some privacy advocates privately admit that they won’t be able to stop behavioral targeting entirely. Google itself clearly is assuming that most people won’t mind and might even welcome more targeted ads. “Most users prefer more relevant ads to less relevant ads,” says Google’s Bender. Google won’t track sensitive categories such as health and religion.

It’s likely that the entry of Google, whose brand carries a lot of weight with consumers, will help make targeting more pervasive—if advertisers can resist the temptation to go too far.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/

Reader Comments

screech

March 11, 2009 01:18 PM

This sounds just awful. Everyone in my family uses the same computer. I don't want be served ads based on their web patterns, and I'm sure they're not interested in mine.

John Reid

March 11, 2009 02:28 PM

I wish the "privacy advocates" would quit trying to protect me. I think Google has been more than above-board with this program. Advertising will always be with us (and is also a good thing, since they pay for a lot of the wonderful stuff available on the internet), so if we must get adds, we might as well at least get relevant adds.

Tony

March 11, 2009 02:43 PM

Screech: that's what separate profiles are for! Also, unless you stay logged into Google while others are using the computer (a really bad idea in general), they won't associate you with the behaviour of anybody else.

Bonnie

March 11, 2009 03:09 PM

I don't think this is a good idea. I tire of the 'stereo-typing' ads that I already see. Nothing that flashes is ever what I need or want. How much longer is it going to take for marketing information gatherers to realize this? Heck, maybe I should go into advertising and set the standards!

bruce howard

March 11, 2009 03:51 PM

Note what I marked from this story: I thought cookies were about SITES I visited, not whether I used the site to try to buy something. Do they, meaning Googe, get to track everything I do while connected to the site? Que pasa aqui?

Or if someone placed a cell phone in an Amazon.com shopping cart but didn’t buy it, he might be served an ad for that phone on other sites.

Orly

March 11, 2009 04:03 PM

Honestly, who clicks on web page ads?

William Hudley

March 11, 2009 06:00 PM

We all saw this coming. In this tough economic times, Google needs to find creative ways to boost its revenues. At the same token, the ads are probably going to be much more relevant to the user. Just my .02 cents.

-William Hudley

KFad

March 11, 2009 06:22 PM

I don't mind targeted ads. In fact I prefer to see them instead of random ads. But I don't appreciate Google lying. I've noticed they've already been doing this for months.

For example, a few weeks ago I visited a Web site that I had never visited before. The next Web site I visited had a Google ad for the site I had just visited. I visit the second site everyday and have never seen an ad for the first site before. It just magically showed up while I happened to be logged into my Gmail account.

bob indiana usa

March 11, 2009 06:55 PM

too much personal data being stored. theres no doubt in my mind that some free dating and other sites are personal data collection engines for federal govt. we are being phsycological profiled and this could ultimately negatively affect our very freedom, whats left of it..

Kevin

March 11, 2009 07:50 PM

Suppose that we see Google for what it is, an organization that does, and always will, have the potential to be swayed towards evil because of market demands and new personnel with new ideas. What if, slashdot types release a tiny, open-source script that will clear your cookies every few minutes. Now Google can build a big picture on me all it wants, but the big picture will be useless. Now let's suppose Google pretends they've never heard of this ad hoc script, and keeps on touting its new targeted ads to the advertisers. Advertisers keep paying, and the free-to-the-user web can keep on relying upon google ads for site costs. Assuming the advertisers still see somewhat of a sales boost from the consumers who like targeting and didn't run the script, perhaps everyone is happy, (except that it's a pity to use a technical band-aid rather than inhibiting evil by a corporation in the first place.) Feasible?

It gets worse

March 11, 2009 09:19 PM

Imagine if they merge your long-term preferences with your twitter statuses and stuff you put up onto social networking sites.

They now have a your basic (long-term) psychological profile and emotional state on a day-to-day resolution.

They'll soon have the technology, if they haven't already, to engineer a sequence of experiences that would dispose an individual to a specific ad.

TwentyThree

March 11, 2009 11:37 PM

There are many sides to the coin. To play the devils advocate -- and support the move by Google (okay so maybe I think Vanessa Fox is hot) -- I would have to say it is a positive step in an advertising sense. Random ads, in say GMail, would be less appealing to an end user. Suppose I said "Hey Baby" in an email, and wind up with ads for the latest diaper or cute baby outfit. In this sense, it makes sense.

On the other side -- maybe a bit paranoid -- there could be dubious efforts, especially due to "chatter" about buying into Twitter.

If I send a Tweet saying "I'm a schizophrenic, not I'm not, yes you are," would I have not only advertisements for mental health clinics, but also spam for more pills (I get enough ads for the little blue one already) and also, how many servers would put me in a data-table as being mentally defunct? It is ALMOST a proven fact that all search queries are already being stored on numerous servers, just think of the endless possibilities. I could be directed to the latest and greatest conspiracy theory site to further distort my view on society, creating a mentally damaged byproduct of a virtual reality, electronically copulating into "real" reality. But what is real these days anyway? I digress.

Think of this: How many spiders are going to crawl this page and read this and save it on their servers? (I reiterate, yes I think Vanessa Fox is hot). Again I digress.

Honestly, the ultimate source of privacy would be to use a browser capable of erasing your cookies upon logging off, as well as disabling third party cookies. There is one that has a similar name to the aforementioned Google engineer.

And for Gods Sake, NEVER use the same profile on the family computer! You never know what others are looking at on the web that you may not want to see, or others to get ads related to subject matter you may not want them to see!

Privacy really is in the hands of the end user at this point. You either click an ad or you don't. You can choose to use a secure browser and delete cookies, or not. If you program, as Kevin posted, write a script to erase your cookies on a timed basis.

Just my 23 cents there. Your privacy is yours alone, and its up to you on what you want to do with it and how.

And remember... BUY BUY BUY!

Jolt

March 12, 2009 10:25 AM

Roughly 9% of web users have disabled 3rd party cookies: http://www.statowl.com/third_party_cookie_support.php

This prevents usage tracking by 3rd parties such as Google. Additionally, for users who prefer to use Google as their preferred search engine, 10% of them have disabled 3rd party cookies.

I am neither for or against 3rd party tracking, but it is interesting to see people's reaction and what they do as a result.

keithvsg

July 29, 2009 01:57 PM

In my opinion the fundamental problem is that the advertising industry has, and continues to, run wild in its search for ever increasing revenue and profits, aided by a tax code that subsidises their business out of the pockets of the tax-payer.
We have a long-running battle between ordinary people who do not want to be flooded with advertisements, and advertisers who try to ambush us at every turn. While we need some advertising in order to be aware of products, we do not need to be flooded with advertising everywhere we look or listen.
If we wish to curb advertising, the first thing we need to do is to stop subsidising it out of the taxpayer's pocket. The ability to merge unlimited advertising costs into deductible business expenses is the root problem. We need to amend the federal tax code to limit the amount of the deduction attributable to advertising to some small percentage of a product's manufacturing cost, (e.g. not more than 1% of unloaded manufacturing cost). Companies could still spend as much as they want on advertising, but the taxpayer subsidy would be limited. I believe that the vast majority of the public has no idea of the impact of advertising costs on the retail price of the goods they buy. e.g. I seem to recall that a few years back the retail cost of an IBM laptop computer contained no less than 20% advertising and marketing cost. Apply that to everything you buy and you realise how much you are really paying for all the "free" services piggy-backed onto the advertising market. Bluntly, I would willingly pay for the very few "free" services I use if the trade off was elimination of all advertisements from radio, TV, movies, outdoor displays, the Web etc. (yes, I pay for public broadcasting and I don't watch commercial TV or listen to commercial radio.)
Am I the only one who understands that nothing other than air and sunlight is free; the real question is not "Is the item free?" but "Who pays for this?"

Post a comment

 

About

BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

Categories

 

BW Mall - Sponsored Links

Buy a link now!