Google analytics helps Google serve you the right ads, pushing up the price of advertising, defending themselves against not-so-knowingly competitors

  • Jon Lund 

The other day I wrote a post on how Google’s new site-analysis program could help grow the entire online advertising market. This just might not be the entire truth of Googles motives for giving away this piece of hosted software application for free.

Analytics makes Google know you better
The thing is, that Google analytics has the potential of helping Google serve much more relevant ads to users of Google search engine. Every time you visit a site making use of Google analytics, you leave an electronic trace at the Google backend servers. And next time you visit a Google-powered site, Google will be able to tell “Ah, there’s the guy who visited site XX the other day at 5.05 pm, and site YY the day after”.

…driving up prices for advertising
Since Google also reads through all the pages when doing its normal indexing of the web, Google will know not only what sites you visited, but also the content of them. In other words: Google will be able to tell that you’re exactly in the target group for new cars, especially Volvo and VW, if you the past 2 weeks have been surfing intensely on car-websites, reading a lot about Volvo and VW.

With this knowledge, Google will be able to tell Volvo or VW that sites powered by Googles ad-serving program are just the right place for them to advertise, and they’ll start driving up the price of having their ads exposed to you.

(While the price of advertising on itself has – at least this forth – been determined solely by what users enter into the searchfield, Google serve ads on a lot of other sites, where no search-terms aren’t being entered anywhere. In this the “adsense” adserving program Google guess the relevance of ads they choose to display based primarily on the content of the webpage on where the ad goes. It is the guesswork of this adserving programme the Google Analytics can help Google improve.)

Data is being collected
Google is for sure collecting these data. This is openly disclosed in Googles privacy policy. Where they also state that they “may use personal information to provide the services you’ve requested, including services that display customized content and advertising

…and they surely works
And if they’re not already making use of the data this way, they have all the good reasons of the world to do it: Studies presented by CEO Scott Ferber of at an FDIM-conference in September showed very clearly how had been able to multiply the value of clicks on VW banner more than tenfold by using the very same technique.

The number of people who made use of the configuration tool on the VW website and the number who submitted request for more info skyrocketed, when the ads were targeted to users who were known to be interested in VW.

(I wrote a post – “Best of all worlds” – from the conference, and lateron I uploaded Scott Ferbers slides.)

Building up Googles position
This is not Googles first attempt to get data on you and your websurfing activities. From all your past searches on Google, you have already told Google your geographic location, your language and what you like to seach for. If you have an active gmail-account you’ve also told Google who your friends and colleagues are, and what you write to each other. And if you have installed the Google toolbar, you already have told Google all it could hope to learn about your surfing activities.

With Google analytics, Google has simply added one more stream of input-data about who you are and what you doing to their backend intelligence. One more steam of data, that can help Google build up their position as a high-quality advertising-network, pushing up the price of advertising and defending themselves against not-so-knowingly competitors.

This post has been slightly revised at 8.32 am.

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