Through Google Apps for Business, Google is quickly building a new business model and new revenue stream. But for the time being, Google still makes the bulk of its money, as in more than 90% of its revenue, from advertising.
Its business model can be described as: build products that people want use, keep the products free by selling advertising, and attract millions of users.
No ad to show here.
It’s a model that works, is resilient, and helped Google survive what is now referred to as the dotcom bubble burst of the year 2000. A period when a lot of internet companies closed their doors in the face of tough economic conditions.
This model has also inspired others like Facebook, LinkedIn, and Twitter to follow suit.
The ads that Google places in front of millions of eyeballs everyday are targeted or personalised.
This raises the obvious question — how does Google target people with personalised ads without using their personal details? Additionally, how does Google continue to do this despite constant monitoring for any privacy violations by agencies and watchdogs?
Google has always been adamant that it doesn’t use personally identifiable information to personalise or target its ads.
Now via its Good to Know initiative, Google shares some of its tricks, and in true Google fashion the targeting process is simplicity itself.
Google uses two methods which it calls Contextual Advertising and Interest Based Advertising.
The technologies involved in doing both of these are underwhelmingly simple. For example with Contextual Advertising, Google uses the same technology that is used for spell checking.
Almost every email or document creation software you use has a spell checker which automatically scans the words you type and gives you suggestions when it thinks you’ve misspelled a word.
Google uses this same word scanning technology to detect “key words” such as insurance, golf, sport etc. These key words literally provide the context for the ads shown in Gmail or the Google Search Engine.
If, for example, the word scanner detects the word “insurance” in your mail or the search engine, Google displays ads about insurance. This of course is not a mind-bending concept and is probably the reason why Google uses this same technology on both the search engine and in Gmail.
Targeting users with Interest Based ads, however, is a bit more involved for Google but still makes use of very simple technology. Google doesn’t need to know who you are to guess your interests.
For Interest Based targeting, Google partners with other websites through its Google Display Network.
There are thousands of sites in this network including news websites and blogs. And every partner that joins this network needs to describe to Google what their site is about e.g. sport, technology, gardening etc.
This is how it all comes together. If you visit any site that is part of the Google Display Network, that site places something called a “cookie” in your web browser. This cookie is a simple file with text identifying the site you are on as being part of a Google category such as sport, technology, gardening etc.
When you leave the site, a cookie serves as a record that you visited a website that is part of the Google Display Network, in the “sport” category for example.
Here is the trick, when you go to another site that is also part of the Google Display Network, the Google Ad machine detects the cookie already saved in your browser and displays more sports ads because of your previous visit.
The process is simple and effective but it does have the potential to freak some people out.
But before going all gung ho deleting cookies from your browser because of the Google Display Network, be aware that almost every website uses cookies. Cookies help websites “remember” your preferences.
Here is an example; you might visit a website that supports multiple languages. Once you select the language of your choice, the site places a cookie in your browser to remember your language preference so that next time you visit, the site automatically launches in your preferred language.
So cookies are not all bad. You can manage them by deleting them from your browser or using your browser’s Private Mode to prevent websites from installing them in your browser. Some websites actually don’t work properly without being allowed to install a cookie.
Advertising is not all bad either as it keeps some services free, right?
In short, to personalise ads without knowing who you are, Google does nothing more than make an educated guess using key-words for context and cookies for interest. And by analysing massive amounts of data across the internet, these guesses are mostly accurate.
Google does have a tool to protect your privacy beyond deleting cookies. The tool prevents your interests from being tracked by any website that is part of the Google Display Network which is a more effective approach than deleting cookies. To find out more about this tool go to the Ads Preference Manager at the following link and choose the Opt-Out option.
