Will Google Behavioral Ads Increase Criticism and Danger?

Google has announced that it will enter the world of behavioral advertising. Although the company is trying to frame the move as “making ads more interesting,” chances are that the driving factor is trying to shore up revenue at an uncertain time. The big question is, even with assurances of the ability to opt out, whether this will only add fuel to the fire of criticism that has been following the company.

Although Google is using the term “interest-based advertising,” it’s clear that its plans fall into that category known as behavioral advertising:

We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching “interest-based” advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest — say sports, gardening, cars, pets — with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads.

Many privacy critics have been dogging Google for two main reasons. One is that it has a virtual monopoly on third-party search engine-based advertising. The other is Google’s “Don’t be evil” motto:

The Google Code of Conduct is one of the ways we put “Don’t be evil” into practice. It’s built around the recognition that everything we do in connection with our work at Google will be, and should be, measured against the highest possible standards of ethical business conduct. We set the bar that high for practical as well as aspirational reasons: We hire great people who work hard to build great products, and it’s essential that we build an environment of trust - among ourselves and with our users. That trust and mutual respect underlie our success, and we need to earn it every day.

With its current move, Google settles into that spot between the rock and the hard place. On one hand, the company is dependent on advertising for 97 percent of its total revenue according to its 2008 10-K. As markets tank, Google understandably wants to shore up revenue. (And the fact that it’s finally giving in on behavioral marketing does make me wonder whether the current revenue picture is going to look strained when management next reports numbers.)

And then there is the other hand of public perception, which, if negative, can potentially damage brand and relationships with users. Google is probably using the phrase “interest-based” because so many consumers, when given descriptions of behavioral marketing and asked their opinions, react badly. Google is trying to allay fears with an attempt at some transparency:

• Transparency - We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. You can click on the labels to get more information about how we serve ads, and the information we use to show you ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google’s ad serving.
• Choice - We have built a tool called Ads Preferences Manager, which lets you view, delete, or add interest categories associated with your browser so that you can receive ads that are more interesting to you.
• Control - You can always opt out of the advertising cookie for the AdSense partner network here. To make sure that your opt-out decision is respected (and isn’t deleted if you clear the cookies from your browser), we have designed a plug-in for your browser that maintains your opt-out choice.

However, various studies have found that well over half of all consumers think that the presence of a “privacy policy” on a site means that the company will not share someone’s information with another company. The stage is set for customer backlash.

And Google isn’t helping things with its recently documented activities. YouTube, owned by the company, rolled out some new privacy features a few weeks ago in response to criticism from privacy activists. But apparently not all these features work as advertised, and people who think they are avoiding cookies may not be.

Yes, Google is still maturing as an organization, but the world is moving fast and the company has a lot of potential competition — which is about to include Wolfram and an apparently impressive technology. When users are upset, they are more likely to change habits and try some other search technology. That could make any potential shortfall of revenue look like a rounding error.

Check Catherine Taylor’s take at BNET Media on how user-control over behavioral targeting could prove a business problem.