Google is wading into behavioral ad targeting in a big way today. It will start placing cookies on consumer’s browsers to collect information about their interests whenever they visit sites that show AdSense contextual ads. Then it will show ads targeted to those interests to the same person as he or she browses the Web on other sites that also serve AdSense ads (which is a large portion of all commercial sites).
Since Google already knows what each site or page is about, it will use this information to place each user in one of 600 subcategories of interest. If you visit tech blogs often, you are probably interested in technology. If you visit Trulia, you are probably in the market for real estate. Through AdSense, Google can now target ads not only based on the context of the page you are on, but also based on the context of the pages you have visited in the past, even if you are on a site that is completely unrelated. For instance, as a completely hypothetical example, it might show you a real estate ad targeted to the towns you were searching on Trulia when you visit a gadget blog.
Not only will Google now target ads at you based on your interest, but it will also let you target yourself. Anyone can go to Google’s Ad Preferences Manager and see exactly how Google is categorizing their interests. (Most people will probably see nothing right now, since this program is only being rolled out on a test basis and will gradually expand). Now, here’s the really smart part: Google lets you add or remove any interest. In effect, it is inviting you to declare what kind of ads you wan to see. You can also opt out of the program completely.
While most people will probably never bother to tweak their ad preferences or even be aware that they can, this represents an important new precedent in online advertising. Why should the ad networks be the only ones who can determine how to target ads at consumers? Why not let the consumers self-target if they care to do so?
Google knows that its interest-based targeting algorithms need a lot of work. Even if it can get just a small percentage of people to correct the algorithm, that data theoretically could be applied to other people with similar browsing patterns. Google gets to say that it is giving users more privacy and control, while collecting really valuable data that will help make its targeting more effective. In the online ad game, whoever can target the best can charge the most.