Wednesday, April 11, 2007

Google and Behavioral Targeting Part II

In my last article titled "Google and Behavioral Targeting" I talked about how Google is putting its footprint all over the web and could be preparing for the largest Behavioral Targeting Ad network.

I got several emails in response to that article. Two main questions that were raised are:

  1. Won’t there be technical challenges to aggregate all this data and make it meaningful for behavioral targeting?

  2. Won’t there be privacy and trust issues if Google were to go that route?

This article is to address these two concerns.

  1. Technical Challenges
    Yes technical challenges will be there but that’s why I believe if anybody can successfully do it today then it is Google. Last I head Google had a pretty good team of engineers. If all the best engineers can’t overcome these technical challenges then Google should change its hiring process. In my opinion technical challenges are not such a big deal. Even if you delete a cookie Google will be able to identify a visitor via their Google account. This is where Google has the biggest advantage over other BT networks such as Tacoda or Revenue Science.

  2. Privacy and Trust Issues
    Privacy and trust issues are everywhere on the internet.
    Google will of course have to get a buyoff from all the parties involved i.e. consumer, advertisers, publishers etc. Below I show how they could get a buyoff from each one of them.

  1. Consumers – How many consumers know what the cookies are? Not a lot. How many know that they are being targeted online in some way e.g. Google Personalized Search? Not a lot. How do Behavioral Targeting companies target the visitors on their network? They give visitor an option to OPT-OUT. Yes, they opt-in visitors by default and then give them an option to opt-out. Can’t Google do that? Sure. They could opt-in everybody, just like they opted me in on personalized search. Yes I can opt-out but how many visitors do know the meaning of opt-in or opt-out? So getting a visitors buy-in is simple. To calm any privacy and trust issues give users a tiny little link to opt-out.

  2. Publishers – There are two avenues to sever ads today, these same avenues could be used to serve BT ads.
    1. Google Search – Their own search engine, they don’t need anybody permission to target ads here, they own the site.

    2. Adsense Publishers – How many Adsense publishers really know how Google chooses what Ads to show on their site? I don’t think anybody really knows. If Google starts showing behavioral targeted ads than what do Publishers have to loose? Nothing. Instead their click-thoughs will go up resulting in an increase in their revenue. It will be a huge win for them. No privacy or trust issues here.

  3. Advertisers – They will benefit the most from this network. They will get quality visitors to their site. Visitors who are really interested in the advertisers offer will be targeted. These visitors will be determined via their behavior on the Google network. Easy buyoff here.

  4. Providers of Behavior – These are the individual sites on which the behavior will be collected. Such sites include Google Search, those using Google Analytics, AdSense Publishers, Google Checkout Sites, and Advertisers etc. This will be the hardest to convince and this will be the main source of all the behaviors. Let’s take them one at a time
    1. Google Organic Search – Nothing new here, organic searches are easy to collect behavior on since nobody is paying for it. Google can do (and is doing – personalized search) whatever they want to.

    2. Advertisers – Advertisers will mind if the click behavior on their ads is used to help their competitors. However, if Google gave them a way to filter their competitors than they might have a lesser issue. To make it even better for them Google could provided them some free advertising in lieu of letting Google use the click behavior on their ads. Google can make up for all these free advertising by charging a higher rate for behaviorally targeted ads.
    3. Google Checkout Users – Same as advertisers, they might let you use the behavior only if you don’t empower their competitors with that knowledge. So if I am selling dress shoes, I don’t want you to empower somebody else selling dress shoes but you can use it for advertisers who are selling dress shirts. Again, Google will have to provide a way to filter out competitors or certain types of sites. You provide a good enough incentive and site might be ready to participate.
    4. AdSense publishers – A majority of the publishers are small content sites and they make their money via Google Adsense. They will let you use the behavior on their site if you provide them incentive. Well there are two incentives that I think will do the trick.

      1. Allow them to make more money from the Adsense network – Google will pay higher click-though for behavioral targeted ads (they will charge more) if the publisher agrees to allow them to use the behavior on their site for the behavioral ad targeting.

      2. They might be able to monetize those users who have left their site. Google might be able to provide a cut for their (Adsense publishers) traffic that they use in Behavioral Targeting, if I make a cent for every visitor I get on my site just by participating in Behavioral targeting network won’t that be great? Again, as long as I can filter out the sites I don’t want to benefit from my sites visitor behavior. How you can monetize when visitor leaves your site will be covered in detail in another post.

    5. Google Analytics User – Same as Adsense publishers if you provide them incentives a lot of them will be able to sign-up as long as it is not empowering their competitors. As mentioned above in 4 b, Google might be willing to pay for your visitors by having them use their behavior in the BT network. Alternatively Google might keep this tool for Free for only those who will allow them use their visitors’ behavior and charge a fee to others. Why will a company give anything for Free?

This is my view on how Google could get all different players involved in their BT network and build the largest BT network.

I welcome any comments.

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