Why is Google really rolling out Google Analytics opt-out plug-in?

Last week I wrote about a browser plug-in that will allow people to opt-out of the Google Analytics cookie. The release of this plug-in seems to be a proactive step towards another announcement.

Eric Peterson, on his blog, voiced his opinion on why Google is rolling out this plug-in. I think Eric has a point in his post about Google trying to make a push into Federal Government web sites and this roll out is a check-box to satisfy the needs of privacy advocates.

However, I am still not entirely clear on what Google will get if it can’t use all the data that it will collect on Federal Government website? It won’t be able to use in any way…well maybe at an aggregate level to compete with the likes of ComScore. So what do I think the reason is?

Behavioral Targeting

I think the real answer to Google Analytics’ rolling out Opt-out is “Behavioral Targeting”.
Google Analytics is deployed on thousands of websites and collects a wealth of data. However, so far this data is used by individual sites to optimize their ad spend and improve the site for customers while improving the websites impact on the bottom line. Google has not really used that data much other than providing benchmarking reports in Google Analytics. I think the time has come for Google to start using Google Analytics data to make more money.

Google Analytics Data Sharing

Remember, in 2006 Google Analytics started asking GA accounts to opt-in/opt-out of data sharing. As I wrote in my blog post on Google Analytics Data Sharing, “data sharing” was a step towards using Google Analytics data for behavioral targeting. This opt-out plug-in seems to be a next step in that direction.

Limited functionality of Adwords Remarketing

Last week Google Adwords announced the roll-out of “Remarketing” feature that will allow advertisers to remarket to the visitors (cookies) who came to their sites but left without taking the desired action i.e. without converting (this is also called Retargeting, a form of Behavioral Targeting). For this feature to work, Adwords advertisers will have to put a small script and identify the people (cookies) whom they want to target.
The functionality to identify the segment that you want to retarget seems to be very limited in Adwords.

Google Analytics role in enhancing Adwords Remarketing

Now imagine, you can create complex segment in Google Analytics and then use Adwords to target the visitors who fall in that segment. Won’t that be nice? Well that can’t happen unless you use Google Analytics. Here is an example to make this clear:
I want to target visitors who viewed more than 3 products and looked at the contact us page and then left without converting (or it could be more complex than this).
This is a segment that I won’t be able to create easily in Adwords without some coding on my pages. Using Google Analytics, advanced segment functionality this is a piece of cake. I create my segment then use Adwords to remarket to visitors who fall in that segment. Won’t that be more powerful? I think that’s where the money is.

Other Behavioral Targeting Scenarios with Google Analytics

Let’s take a hypothetical example to see how this will work.

Say I write a blog on luxury cars. I use Google Analytics as my web analytics tool (it is free, so why not). I don’t have real business model but I use Adsense ads to make some extra money. Since my blog is really popular I get lot of traffic. My blog reader are those who have interest in luxury cars because that’s all I write about.

Now imagine Google asks me to pool my visitors’ information, collected in Google Analytics, into a pool that they can use for advertising purposes. They tell me that by doing so I will be able to make some more money from my visitors even when the visitors have left my site. Hmm… free money. Sure :)

How will Google use that data?

Google will identify the visitors who come to my blog, read articles, write comments, come often etc. They will then put the visitors (cookies) who fulfill certain criteria (as defined by Google or the Advertiser) in a segment called “Luxury Car Enthusiast”. They will pool my data with other similar sites or similar pages on other sites to create a bigger pool than my site has to offer. Google now has a set of cookies who are interested in luxury cars.

BMW creates a campaign in Adwords to reach “Luxury Car Enthusiasts”. They are willing to play 2X-3X CPC or CPM to reach this target.

A visitor, who left my site (A) and lands on a site (B) that, has nothing to do with luxury cars. Google can identify that visitor because that visitor is in the pool of cookies that belong to “Luxury Car Enthusiasts” segment. Google shows this visitor an ad from BMW on Site B. Visitor sees the ad that matches his/her interest and the advertiser reaches their target.

Note: This all is a speculation by me and I have no official information.

Win-Win Situation

  • BMW finds its target
  • Google gets more money for the same ad slot.
  • Publisher of the ad makes more money.
  • Sites, which pool their visitors in this segment, get a cut.

What does GA Plug-in has to do with all this?

Behavioral Targeting has been under scrutiny for a long time and there is a big uproar about tracking people. Privacy advocates want an easy way for people to opt-out of Behavioral targeting and this plug-in seems to be a proactive step in that direction.

What do you think?

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