Google Launches Interest-Based Advertising

According to a recent post in Google's AdSense blog, Google will soon provide interest-based advertising across AdSense publisher sites. The program will be offered to a limited number of advertisers as part of the beta program, with expansion later in 2009.

Geek speak, you say? Not so fast. If you use the Web -- and you do, since you're reading this article -- you will be affected by this addition to Google's AdSense program.

What is AdSense?

Since its launch in 2003, Google's AdSense and its sister program AdWords have become the dominant form of advertising on the Web.

Advertisers use AdWords to bid on keywords relevant to their products and services. Their text advertisements are placed on Web sites that participate in AdSense. Placement is contextual -- that is, the ads run on pages that contain the keywords advertisers are targeting. When site visitors click on AdSense ads, the site owner receives anywhere from a few cents to a few dollars from Google.

Google's AdSense program is immensely popular with Web site owners and bloggers because it is easy to set up and allows them to earn income from the Web content they provide for free to their readers.

Interest-based advertising for Web users

After Google implements interest-based advertising, when you visit a site containing "Ads by Google" -- which has to be getting close to what, all of them? -- your visit will be tracked. Google will associate "categories of interest," such as gardening or sports, with your browser based on the types of sites you visit and the pages you view. Google will also track information about the advertiser sites you visit.

Then, on future visits to sites with Google AdSense, Google will use all of this information to serve you ads that match your interests.

Google has built a tool called "Ads Preferences Manager" (accessible by clicking "Ads by Google") to allow you to view, delete, or add interest categories. You can also opt-out of the program entirely, and there's a plug-in so you won't lose your selection if you clear your browser's cookies.

Interest-based advertising for Site owners

Many site owners are skeptical about whether Google's interest-based advertising will boost their AdSense revenue.

Google insists it will, by serving site visitors with advertisements that are targeted to their whole browsing history, not just the page they're on.

According to a post by Google employee "AdSenseAdvisor" in a Webmasterworld forum, "Because interest-based ads will compete in the auction, your site will only show those ads if they pay more than what you'd otherwise get with contextually targeted or placement-targeted ads. In other words, all the ads (interest-based, contextually targeted, placement targeted) will compete in the auction, and the ad with the highest eCPM will show on your site."

If you don't speak AdSense, this means that interest-based advertising will only "bump" the content-related ads if the interest-based ads pay more.

In fact, interest-based advertising may spell cha-ching for sites that are hard to monetize -- that is, sites with topics that are hard to match up with products or services. Until now, those sites have had poor earnings potential via AdSense. With interest-based advertising, revenues for these sites could increase dramatically, since users will presumably have some relevant ads to click on.

However, niche site owners -- especially in niches where advertisers pay handsomely -- may prefer to continue displaying only ads that relate to their content. Other site owners don't want to run the risk of displaying inappropriate or "trash" advertisements on their sites.

Opt-out is available

Thankfully, site owners hosting AdSense can opt-out of displaying interest-based advertising and can prevent their site's traffic from being used to create interest categories. (Interestingly, when I went to check this out in my AdSense account settings, the interest-based advertising option was already present and turned "on.")

All AdSense participants will have to update their privacy policies so their visitors are aware of the new Google tracking cookie. Many bloggers (including me) received an email from Google asking that this be done by April 8, 2009.

According to Google's AdSense help, site owners should update their privacy policies even if they have opted out of interest-based advertising, because the ads displayed on their sites may still be modified according to the site visitor's use of advertiser Web sites.

What about shared computers?

In theory, Google's interest-based advertising could be a great thing for Web users. No matter what AdSense site you visit, you'll see ads that are useful to you. And, you can customize your AdSense experience in order to kill off "interest categories" you don't want to see, or add some that Google didn't predict for you. (I can only dream of the day when I can do that with my TV.)

But what about users of shared computers, like those in a school or library? The ads on those browsers are bound to be wildly schizophrenic. And do we really want to know what kinds of sites the previous user of that computer was surfing? It remains to be seen how or if Google addresses this problem.

Privacy concerns

Google's new interest-based advertising program may seem creepy and Orwellian, but according to an Nicholas Kolakowski in an eWeek.com article, the use of "behavioral targeting" to serve up advertisements is nothing new to search engine companies. And the use of tracking cookies to serve pop-up advertisements has been an Internet marketing staple for years.

Still, some Web users are concerned about the privacy implications if there's a Google database storing every Web site you visit. Google insists it does not identify users personally in order to match them with their Web behavior (or misbehavior), but if you're the only one using your computer, then Google is following you. They're just being more transparent about it than the other companies.

As a site owner, I'm cautiously optimistic about adding interest-based ads to my blog. After all, the more relevant the ads, the more likely my visitors are to click. As a Web user, I'm not sure. I shudder to think what kind of ads I'll start seeing the next time I log on at the library.

Sources

Are Google's Behavior-Based Ads a New Privacy Concern? eWeek.com, Nicholas Kolakowski, 3/12/2009.

Driving Monetization with Ads that Reach the Right Audience. Google Adsense Blog, posted 3/11/2009.

Google AdSense. Thread at WebMasterWorld, retrieved 3/14/2009.

Google: View Only the Ads That You Want to See." Eric Zeman, Information Week. 3/11/2009.

How Are You Protecting the Privacy of my Site's Visitors? Google AdSense Help, retrieved 3/14/2009.

I've opted out of ads based on user interest categories. Do I still need to change my privacy policy? Google AdSense Help, retrieved 3/14/2009.