Google Ties Online Search to Real-World Purchases

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Philadelphia retail magnate John Wanamaker once observed, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” If there is a holy grail for marketers, it’s figuring out which half is which.

At its Google Marketing Next conference in San Francisco on Tuesday, Alphabet Inc.’s (NASDAQ: GOOGL) Google offered an upgraded version of its store visits measurement program that advertisers may believe is the nearest thing to the holy grail, and consumers may think is the latest manifestation of Big Brother-ism.

This is how store visits measurements works, according to Google:

Store visit data is based on anonymous, aggregated statistics. AdWords creates modeled numbers by using current and past data on the number of people who click your ads and later visit your store.

Store visit data can’t be tied to individual ad clicks or people. We use industry best practices to ensure the privacy of individual users.

Google said on Tuesday that it has recently upgraded the program using deep learning models to train on larger data sets and measure more store visits “in challenging scenarios with greater confidence.” But that solves only half the problem:

[M]easuring store visits is just one part of the equation. You also need insights into how your online ads drive sales for your business. You need to know: are my online ads ringing my cash register? In the coming months, we’ll be rolling out store sales measurement at the device and campaign levels. This will allow you to measure in-store revenue in addition to the store visits delivered by your Search and Shopping ads.

If you collect email information at the point of sale for your loyalty program, you can import store transactions directly into AdWords yourself or through a third-party data partner. And even if your business doesn’t have a large loyalty program, you can still measure store sales by taking advantage of Google’s third-party partnerships, which capture approximately 70% of credit and debit card transactions in the United States.

Read that last bit again. Google has third-party partnerships that capture data on about 70% of all U.S. credit card transactions. Did you know that? Who are those third parties? Credit card issuers, banks, credit reporting agencies?

According to the 2016 Federal Reserve Payment Study, the number of debit card, credit card, clearing house and check payments made in the United States that year totaled more than 144 billion. That’s nearly 400 million a day and about 16.5 million every hour, or 4,500 every second.

So Google can get data on 100 billion payment transactions every year and match those transactions to the ads it serves “in a secure and privacy-safe way, and only reported on aggregated and anonymized store sales to protect your customer data.”

As Kate Cox at Consumerist points out, that promised anonymity is anything but:

If anyone’s looking at your digital breadcrumbs, they can be reasonably sure you are you from shockingly little data. Studies have shown that it only takes three pieces of data to identify you by credit card spending alone, or two to identify you from a social media app.

On top of that, the larger picture of big data is, frankly, kind of overwhelming. [Federal Trade Commission] research has found that … cross-device tracking is everywhere and poorly disclosed. And finely granular ad targeting can have real harms, from small scale price discrimination to unintentional racial discrimination or even completely illegal racial discrimination that perpetuates housing segregation.

Google may intend and believe that its new ad tracking system is both anonymous and benign. That is at least an arguable position, and the argument should begin now.