Of course we'll never know how much of a difference targeting makes to the bottom line, but I doubt that it's huge.
Google's revenue comes from people searching for queries like "good traffic ticket lawyer", and from competitors bidding up each others' brand names. It would probably work just fine without targeting.
That's not true either, but that's a common misconception. Google makes the bulk of it's ad revenue from search ads. Two people issuing the same search query will see the same ads (for the most part). Hence, Google could still make money without user targeting - unlike Facebook.
It’s entirely possible that they make most of their money off of the top few percent of online spenders, who probably don’t need to be targeted that well to make most of the money that’s made online, hence not justifying an especially-honed targeting system. Plus, we’re in the beginning of the era where the data has far more lucrative and powerful uses than direct ad-matching, so again it may not be to their profit to invest heavily in that area. I don’t know Google’s economics obviously, but that’s my guess.
I am much happier with this system, but I don't really see how this would help Google.. Early web advertising used basic page topic based targeting, but clearly more targeted ads make more money, so what monetary benefit does this provide Google?
The point is that targeted ads are a small price to pay for services like google that are so instrumental to the lives of most people. The reach that this model provides probably outweighs the benefits from being purely subscription based anyway.
That's true, it will still play ads, but obviously non-targeted ads are not as lucrative (an adult watching a Minecraft video doesn't care about toys), therefore, there will still be a non-negligible hit in revenue. If the difference was negligible, why would Google spend so much time developing targeted ads?
Actually, that's false. Most of the money Google makes from ads are not behaviorally targeted ads, but keyword targeted. If you subtract out YouTube 'behavior target' which seems more targeted based on what you watched, the portion of money Google actually makes from using 3rd party website tracking is quite small.
Even this restriction costs them money, as the advertisers have either worse targeting, so lower ROI, so they'll spend less, or they'll have to do the targeting work themselves, which removes part of the value chain from Google, so they'll pay less.
Do you think it's really that valuable for Google to spend engineering hours on an ad-targeting integration that will only improve targeting for maybe ~100k users at most?
And probably far less, actually. As many GCP users as there might be in the world, most of them are IT staff working for some-or-another enterprise; where that enterprise only has a single GCP billing-account administrator. Nobody else in the enterprise has their card on file. (And that billing-account administrator's card-on-file is just a corporate credit card, that tells you what the corporation buys, but tells you nothing about the individual. And their email is just a group/alias — billing@ or somesuch. Impossible to log into; impossible to browse the web as; no way to target ads at.)
You'd think the long tail of individual accounts could have more value, but those are the same users who GCP is least interested in recruiting to their platform, and the ones whose entered data is least trustworthy, because of all the spammers and crypto-miners attempting to use stolen credit cards to pay for service. You want to bind some poor random Joe's card-hubbed ad-profile to a spoke created by the person who stole their identity? That's negative average ad-targeting ROI!
For the target CPA products (which is now the major driver), CPC depends on conversions volume generated by ads. So Google won't make more money even if some changes lead to more clicks but not conversions since the actual bid on clicks will be generally lower on low value clicks.
It's the same amount of ads. The hyper targeting Google does is incredibly profitable because of the scale they operate at. If you make the click through rate of an ad even 0.1% better over billions of searches it more than pays for the R&D of an engineering team.
Really the only way to compete against Google from a feature perspective is the privacy angle. You're sacrificing better click through rates to target a market that cares about privacy. Making something private requires a lot less engineering and product power than hyper optimizing tracking. By definition if you're not doing any tracking you don't need to employee people to set up tracking systems.
Actually yes. Google wants to have advertisers who spend fixed amount each month without going much into details. They dont care much about anything more
For example keyword targetting gets broader.and broader. If you target.for keyword you want to target it precisely or with synonyms but you want to have control over it. But Google changed it lately to make it harder to narrow down keywords.
The result is you spend budget on bad keywords. And it seems like ok,if i get money from it overall.
But actually not only you loose budget but others too, because they need to bid higher.
They need.to bid higher for keywords you dont care about but they care. For Google its additional money.
I'd go further and say, if this could provably generate ad based revenue from a non-trivial number of users, Google would build the same thing and include it in the basic search result shown in the article (with adwords suggestions) for effectively zero cost to Google.
So, even if it were financially successful, it wouldn't likely survive the competition.
Would ad companies like Google make less money? Not really. Overall advertising budgets are not dominated by the effectiveness of advertising, but by adversarial spending by their competitors
This premise seems wrong to me. It assumes that advertising is always a net positive, regardless of how targeted it is.
As someone who runs a company that built apps and have spent ZERO on advertising and PR, I can tell you that is usually not the case.
In fact, the biggest component of user acquisition cost is the untargeted advertising. Much better to reduce that cost to zero by increasing the viral k-factor and user retention. Those two metrics matter way more than advertising. If you can reduce the ad spend per user, or per customer, you are BETTER off, not worse.
For example, Google adwords nor any other advert network offers NO WAY of targeting MacOS, only iOS and Android, so we couldn’t make any money advertising our Calendars for Mac app.
And trust me we experimented with all kinds of monetization in that app:
Google's revenue comes from people searching for queries like "good traffic ticket lawyer", and from competitors bidding up each others' brand names. It would probably work just fine without targeting.
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