Google has begun using billions of credit-card transaction records to prove that its online ads are prompting people to make purchases – even when they happen offline in brick-and-mortar stores, the company said Tuesday.
The advance allows Google to determine how many sales have been generated by digital ad campaigns, a goal that industry insiders have long described as “the holy grail” of online advertising. But the announcement also renewed long-standing privacy complaints about how the company uses personal information.
To power its multibillion-dollar advertising juggernaut, Google already analyzes users’ Web browsing, search history and geographic locations, using data from popular Google-owned apps like YouTube, Gmail, Google Maps and the Google Play store. All that information is tied to the real identities of users when they log into Google’s services.
The new credit-card data enables the tech giant to connect these digital trails to real-world purchase records in a far more extensive way than was possible before. But in doing so, Google is yet again treading in territory that consumers may consider too intimate and potentially sensitive. Privacy advocates said few people understand that their purchases are being analyzed in this way and could feel uneasy, despite assurances from Google that it has taken steps to protect the personal information of its users.
Google also declined to detail how the new system works or what companies are analyzing records of credit and debit cards on Google’s behalf. Google, which saw $79 billion in revenue last year, said it would not handle the records directly but that its undisclosed partner companies had access to 70 percent of transactions for credit and debit cards in the United States.
“What’s really fascinating to me is that as the companies become increasingly intrusive in terms of their data collection, they also become more secretive,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. He urged government regulators and Congress to demand answers about how Google and other technology companies are collecting and using data from their users.
Google said it took pains to protect to protect user privacy.
“While we developed the concept for this product years ago, it required years of effort to develop a solution that could meet our stringent user privacy requirements,” Google said in a statement. “To accomplish this, we developed a new, custom encryption technology that ensures users’ data remains private, secure, and anonymous.”
The announcement comes as Google attempts to weather an outcry from advertisers over how their ad dollars are spent. Google is working to move past an advertising boycott of YouTube, its lucrative video site, after news reports that ads for mainstream brands were appearing alongside extremist content, including sites featuring hate speech and violence.