FRANCISCO (BLOOMBERG) - For the past year, select Google
advertisers have had access to a potent new tool to track
whether the ads they ran online led to a sale at a physical
store in the United States. That insight came thanks in part
to a stockpile of Mastercard transactions that Google paid
most of the two billion Mastercard holders are not aware of
this behind-the-scenes tracking. That is because the companies
never told the public about the arrangement.
Inc's Google and Mastercard brokered a business
partnership during about four years of negotiations, according
to four people with knowledge of the deal, three of whom
worked on it directly.
alliance gave Google an unprecedented asset for measuring
retail spending, part of the search giant's strategy to
fortify its primary business against onslaughts from
Amazon.com Inc and others.
the deal, which has not been previously reported, could raise
broader privacy concerns about how much consumer data
technology companies like Google quietly absorb.
don't expect what they buy physically in a store to be linked
to what they are buying online," said Ms Christine Bannan,
counsel with the advocacy group Electronic Privacy Information
just far too much burden that companies place on consumers and
not enough responsibility being taken by companies to inform
users what they're doing and what rights they have."
paid Mastercard millions of dollars for the data, according to
two people who worked on the deal, and the companies discussed
sharing a portion of the ad revenue, according to one of the
people. The people asked not to be identified discussing
private matters. A spokesman for Google said there is no
revenue sharing agreement with its partners.
Google spokesman declined to comment on the partnership
with Mastercard, but addressed the ads tool.
we launched this beta product last year, we built a new,
double-blind encryption technology that prevents both Google
and our partners from viewing our respective users' personally
identifiable information," the company said in a
statement. "We do not have access to any personal
information from our partners' credit and debit cards, nor do
we share any personal information with our partners."
company said people can opt out of ad tracking using
Google's "Web and App Activity" online console.
Google, multiple people raised objections that the service did
not have a more obvious way for cardholders to opt out of the
tracking, one of the people said.
Seth Eisen, a Mastercard spokesman, also declined to comment
specifically on Google. But he said Mastercard shares
transaction trends with merchants and their service providers
to help them measure "the effectiveness of their advertising
information, which includes sales volumes and average size of
the purchase, is shared only with permission of the merchants,
Mr Eisen added.
individual transaction or personal data is provided," he said
in a statement. "We do not provide insights that track, serve
up ads to, or even measure ad effectiveness relating to,
year, when Google announced the service, called "Store Sales
Measurement", the company just said it had access to
"approximately 70 per cent" of US credit and debit cards
through partners, without naming them.
could mean that the company has deals with other credit card
companies, totalling 70 per cent of the people who use credit
and debit cards.
it could mean that the company has deals with companies that
include all card users, and 70 per cent of those are logged
into Google accounts like Gmail when they click on a Google
has approached other payment companies about the programme,
according to two people familiar with the conversations,
but it is not clear if they finalised similar deals. The
people asked to not be identified because they were not
authorised to speak about the matter.
confirmed that the service applies only to people who are
logged into one of its accounts and have not opted out of ad
tracking. Purchases made on Mastercard-branded cards
accounted for around a quarter of US volumes last year,
according to the Nilson Report, a financial research firm.
this test programme, Google can anonymously match these
existing user profiles to purchases made in physical stores.
result is powerful: Google knows that people clicked on
ads and can now tell advertisers that this activity led to
actual store sales. Google is testing the data service
with a "small group" of advertisers in the US, according to a
it, marketers see aggregate sales figures and estimates of how
many they can attribute to Google ads - but they do not see a
shoppers' personal information, how much they spend or what
exactly they buy. The tests are available only for retailers,
not the companies that make the items sold inside stores, the
service applies only to its search and shopping ads, she
Google, the Mastercard deal fits into a broad effort to net
more retail spending.
spend lavishly on Google to glean valuable insight into the
link between digital ads a website visit or an online
purchase. It's harder to tell how ads influence offline
is a particular frustration for companies marketing items like
apparel or home goods, which people will often research
online, but walk into actual stores to buy.
gap created a demand for Google to find ways for its biggest
customers to gauge offline sales, and then connect them to the
promotions they run on Google.
needs to tie that activity back to a click," said Mr Joseph
McConellogue, head of online retail for the ad agency Reprise
Digital. "Most advertisers are champing at the bit for this
kind of integration."
Google devised its own solution, a mobile payments service
first called Google Wallet. Part of the original goal was to
tie clicks on ads to purchases in physical stores, according
to someone who worked on the product. But adoption never took
off, so Google began looking for allies. A spokesman said its
payments service was never used for ads measurement.
2014, Google has flagged for advertisers when someone who
clicked an ad visits a physical store, using the Location
History feature in Google Maps. Still, the advertiser did not
know if the shopper made a purchase.
Google added more. A tool, introduced the following year, let
advertisers upload e-mail addresses of customers they have
collected into Google's ad-buying system, which then encrypted
them. Additionally, Google layered on inputs from third-party
data brokers, such as Experian Plc and Acxiom Corp., which
draw in demographic and financial information for marketers.
those tactics did not always translate to more ad spending.
Retail outlets were not able to connect the e-mails easily to
their ads. And the information they received from data brokers
about sales was imprecise or too late.
executives did not adopt these location tools en masse, said
Ms Christina Malcolm, director at the digital ad agency
iProspect. "It didn't give them what they needed to go back to
their bosses and tell them, 'We're hitting our numbers,'" she
Google brought in card data.
May 2017, the company introduced "Store Sales Measurement". It
had two components. The first lets companies with personal
information on consumers, like encrypted e-mail addresses,
upload those into Google's system and synchronise ad buys with
offline sales. The second injects card data.
works like this: a person searches for "red lipstick" on
Google, clicks on an ad, surfs the Web but doesn't buy
anything. Later, she walks into a store and buys red lipstick
with her Mastercard.
advertiser who ran the ad is fed a report from Google, listing
the sale along with other transactions in a column that reads
"Offline Revenue" - only if the Web surfer is logged into a
Google account online and made the purchase within 30 days of
clicking the ad.
advertisers are given a bulk report with the percentage of
shoppers who clicked or viewed an ad then made a relevant
is not an exact match, but it is the most powerful tool
Google, the world's largest ad seller, has offered for
shopping in the real world.
once had a patchwork of consumer data in their hands to
triangulate who saw their ads and who was prompted to spend.
Now they had far more clarity.
chief Sridhar Ramaswamy introduced the product
in a blog post, writing that advertisers using it would
have "no time-consuming setup or costly integrations". Missing
from the blog post was the arrangement with Mastercard.
signs indicate that the deal has been a boon for Google.
new feature also plugs transaction data into advertiser
systems as soon as they occur, fixing the lag that existed
previously and letting Google slot in better-performing ads.
Malcolm said her agency has tested the card measurement tool
with a major advertiser, which she declined to name.
the company received US$5.70 (S$7.80) in revenue for every
dollar spent on marketing in the ad campaign with Google,
according to an iProspect analysis.
the new transaction feature, the return nearly doubled to
really powerful," Ms Malcolm said. "And it was a really good
way to invest more in Google, frankly."
some privacy critics derided the tool as opaque.
a complaint about the sales measuring tack to the US Federal
Trade Commission last year.
report in August that Facebook Inc was talking with
banks about accessing information for consumer service
products sparked similar criticism.
years, Facebook and Google have worked to link their massive
troves of user behaviour with consumer financial data.
financial companies have plotted ways to tap the bounty of
digital advertising. The Google tie-up is not Mastercard's
only stab at minting the data it collects from customers. The
company has built out its data and analytics capabilities in
recent years through its consulting arm, Mastercard Advisors,
and gives advertisers and merchants the ability to forecast
consumer behaviour based on cardholder data.
buyers that work with Google insist that the company is
careful to maintain the walls between transaction information
and Web behavior, keeping any info flowing to retailers and
is really strict about that," said Ms Malcolm.
launching the product, Google developed a novel encryption
method, according to Mr Jules Polonetsky, head of the Future
Privacy Forum, who was briefed by Google on the product.
explained that the system ensures neither Google nor its
payments partners have access to the data that each
sharing data that has been so transformed that, if put in the
public, no party could do anything with it," Mr Polonetsky
said. "It doesn't create a privacy risk."
Privacy Forum, a non-profit, receives funding from 160
companies including Google.
ad business, which hit US$95.4 billion in 2017 sales, has
maintained an astounding growth rate of about 20 per cent a
year. But investors have worried how long that can last.
major advertisers are starting to funnel more spending to
rival Amazon, the company that hosts far more, and more
granular, data on online shopping.
response, Google has continued to push deeper into offline
measurements. The company, like Facebook and Twitter Inc, has
explored the use of "beacons", Bluetooth devices that track
when shoppers enter stores.
ad agencies have actively talked to Google about even more
ways to better size up offline behaviours. They have discussed
adding features into the ads system such as what time of day
people buy items and how much they spend, said Mr John
Malysiak, who runs search marketing for the Omnicom agency OMD
USA. "We're trying to go deeper with Google," he said. "We'd
like to understand more."
declined to comment on the discussions.