Google's Plan for Targeted Ads: No Such Thing as a Totally Free Lunch


As a lifelong cynic, I've never really believed that old saw, "The best things in life are free." Yet apparently lots of folks do.


Look at all the great stuff Google gives away. For most of us, Google's search engine and often Maps are part of our daily routines. Now the company is rolling out Google Voice, a snazzy and mostly free service that will allow you to centralize your voice communications and make U.S. and international calls. (Making international calls is the only service for which users must pay, and according to PCWorld, it'll cost less than Skype or most wireless carriers.)


Is it realistic for Google to offer these kinds of free services and not get anything in return? Well, no. Google is in the advertising business, and its customers are folks who want to know more about us so they can sell us stuff. For some reason though, maybe Google's own positioning of itself as a benevolent entity that "does no evil," people regularly seem to lose sight of this.


So I am a bit amused to find folks in such a lather over Google's plans to launch a behavioral advertising program. It's not as if we shouldn't have seen it coming. It's simply time to pay the piper. Of course, Google probably shouldn't have insisted, as it has in the past, that it wasn't interested in behavioral advertising. But I'd call that disingenuous, not "evil."


Google prefers to refer to it as "interest-based" advertising, rather than behavioral advertising. That's because the behavioral term is "vague" and "gets lumped in with questionable practices," said Google spokeswoman Christine Chen in a Network World article. It certainly sounds more warm-and-fuzzy to monitor a person's interests rather than his or her behavior. Heck, most of us seem eager to broadcast our interests on sites like Facebook. (Which has experienced some of marketing. Some privacy advocates are lauding Google for these steps but would like the company to make the tracking an opt-in, rather than an opt-out, program. I like that idea myself, as I wrote in a post about targeted advertising in July.


Jeffrey Chester, executive director of the Center for Digital Democracy, says Google should let users know which specific applications it uses to create their advertising profiles. That's asking a lot, Jeffrey. Last time I checked, no one knew exactly how Google's search algorithm worked either. Even in the age of Internet transparency, these seem like legitimate trade secrets.


It isn't as if this kind of behavioral targeting is a new thing, and Google certainly isn't the only company doing it. Amazon and eBay shoot me targeted product pitches all the time, though in theory their recommendations are based only on my behavior on their respective sites.


Back in my days as a reporter focusing on the financial serivces industry, I spoke with a company called Claritas that segments comsumers into a number of different categories based on their zip codes, demographics, buying patterns and a variety of other (secret) factors. They sell this information to companies that want to sell consumers stuff. Claritas had some discussions with banks and other companies that were developing advertisements that would appear on ATM screens as folks waited for their cash. According to the Claritas Web site, it has identified 66 different consumer segments, part of 14 larger groups. (I dig the names of the groups, many of which sound like lifestyle magazines. Some of them: Urban Uptown, 2nd City Society and Country Comfort. Are you listening, Conde Nast?)


While Google has been successful with its current advertising model, it's not surprising for the company to want to offer a new service in light of the down economy and soft online advertising market. Targeted advertisements seem like a pretty obvious way to go.


There's an even more potentially invasive (or attractive, depending upon how you look at it) type of targeted advertising in the pipeline. Mobile devices are, for advertisers, a kind of holy grail because they know exactly where you are (thanks to GPS) and maybe what you are doing or thinking about doing (courtesy of applications like Yelp or Facebook). So it's not surprising, as the New York Times reports, that advertisers are experimenting with shooting ads to folks via their smartphones based upon their proximity to a store. Our buddy Jeffrey Chester is quoted in this article as well, saying a Web-enabled mobile device is "potentially a portable, personal spy." Google is already posiitoning iself for this market, natch, with its free Latitude service.


Actually this kind of personal information may not be as easy to get as some folks seem to assume. Consumers make it tough for advertisers by masking and modifying behaviors through the creatiion of different online "personalities," for instance.


For those who are still in a snit over Google's plans, remember you can simply use other search engines. (At least until they begin offering behavioral targeting, as they likely will. Hey, they are also in the advertising business.)