SAN FRANCISCO -- Google will soon begin using data from billions of credit and debit card transactions -- including card numbers, purchase amounts and time stamps -- to help Google in its quest to prove that online ads prompt consumers to make purchases in stores, the company said on Tuesday.
The advance, which enables Google to tell retailers how many sales they created through their digital ad campaigns, is a step toward what industry insiders have long described as the "holy grail" of digital advertising. If effective, the program could help persuade marketers to choose Google's services over the television advertising that still gobbles up the lion's share of retailers' ad budgets.
But Google's latest move to tie people's digital trails to their shopping trips is also likely to renew concerns over whether technology giants and their affiliated companies know too much about people's lives -- and whether they disclose enough about how they collect and use that information.
Google collects huge amounts of personal data from smartphones and desktop computers, including location information from Google Maps and other apps, the search terms that people use in a Google search, and people's Web browsing habits. All of that information is tied to the real identities of users when they log into Google's services.
Company executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a store. The mathematical formulas convert people's names and other personal information into strings of numbers. The formulas make it impossible for Google to know the identity of a shopper, and for the retailers to know the identities of Google's users, Google executives said. The companies know only that a match has been made.
In addition, Google does not get a detailed description of the individual transactions, just the amount spent.
"Through a mathematical property we can do double-blind matching between their data and our data," said Jerry Dischler, vice president of product management for AdWords, in an interview. "Neither gets to the see the encrypted data that the other side brings."
Dischler, who said the company had been working on the technology for years, described the modeling as a "revolutionary" step forward for both Google and advertisers.
But Google declined to share anything more than basic information about how the program worked.
Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers who participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation.)
The technology giants introduced the use of what it called "double-blind encryption" in these initiatives. Dischler said that users who signed into Google's services, including Gmail, Maps, Google Search, the Chrome browser, or the Google Play store, had consented, during the setup process, to Google sharing their data with third parties.
Tuesday's initiative enables Google to use transaction data from a much wider swath of consumers than ever before.
Google declined to disclose the names of the affiliated companies that play a key role in handling consumers' data. Retailers that participate in the program don't provide the transaction data to Google directly. They share it with third-party data brokers that encrypt the information before passing it along.
Such data providers have been the targets of cybercriminals in the past. In 2015, a hack of data broker Experian exposed the personal information of 15 million people.
The tech giant also declined to describe its mathematical formulas in anything more than vague terms, citing a pending patent. Dischler said the work was based on a 2011 research paper by three MIT scientists. That research was funded by Google and Citigroup.
In addition to culling data from loyalty programs, Google and Facebook have used location data in their quest to measure whether consumers who viewed an online ad were influenced to go shopping at a store. In these cases, the companies roughly determine a person's location -- for example, whether they are inside or near a Home Depot or a mall -- from GPS or other signals given off by smartphones.
Business on 05/24/2017