According to a report from Bloomberg, Google and Mastercard have signed a secret deal so that Google could track retail sales using Mastercard transaction data. This is yet another proof that Google’s true customers are its advertising partners.
Online advertising have now overtaken all other advertising methods. Companies spend more on online ads than TV ads, newspaper ads and more.
And the reason why online ads have become so popular is that it’s much easier to track the effectiveness of your ad campaign. If you spend money on Google or Facebook ads, you can directly track the number of customers who end up on your online store because of your campaign. You can even see what they end up buying.
And yet, what if you see an online ad for a TV and then you buy a TV in store? Tech companies have tried for years to bridge the gap between online ads and offline sales. That’s why Google tracks your location all the time, even if you turn off location history. And that’s also why Google and Mastercard may have signed a deal.
According to Bloomberg, all Mastercard transaction data in the U.S. is encrypted and transmitted to Google. Google is paying Mastercard, and potentially other card networks, to access this information.
Google can’t see individual transactions. But the company can extract relevant information from this pile of data. For instance, it could match offline purchases with user profiles (Update: Just to clarify, Google can’t access purchases made by an individual person, it’s all aggregated.). And the company knows if a user clicked on an ad.
Advertisers can upload an email database to match up offline sales with Google profiles and ad clicks. Google sends them reports with total offline sales. Advertisers then see how much money they generated thanks to their online ad campaign. (Update: This isn’t directly related to the Mastercard deal. Google is working directly with advertisers that have loyalty programs for this program called Store Sales Direct.)
It’s a good way to convince advertising clients that their campaign was effective. When those companies are thinking about their advertising budget, chances are they will end up spending more money on Google if they see that it leads to a lot sales.
This strategy shows once again that building an advertising business at scale requires some privacy concessions. It’s even more offensive that Google doesn’t talk about these deals more publicly. Users deserve to know what happens.
You can reportedly opt out of this Mastercard deal by turning off “Web and App Activity” in your Google account. But this setting is hard to find and encompasses a ton of stuff. Offline purchases are neither “web” nor “app” data for instance.