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Google uses cookies (small parcels of text), to collect data about its users. This data records what a visitor searches for, among other things.
Google changed its privacy policy years ago to say that it may use personal information and search history for "the display of customized content and advertising." Despite the change to its policy, Google maintained that it had yet to use any stored data to customize its ads. Until now.
In response to inquiries including a study by Gene Munster, an analyst at Piper Jaffray, and an article by the New York Times, Google now acknowledges that it is testing ways to use the data it has collected to tailor search ads to visitors.
While the acknowledgment is neither earth shattering nor particularly surprising, it is an important milestone in that it marks the first time Google has used stored data about individual users for financial gain (better targeted ads = more clicks = more revenue).
Google's announcement comes at a time when perceived trust is critical to the success of another new offering from the search engine giant: Google Health.
Google Health is a free product from Google that allows users to store their medical records online. The product aims to alleviate the problems that come from decentralized health information.
Google Health currently contains no advertising, but the company hasn't ruled out advertising in the future.
The public's embrace of Google Health could very well depend on how Google handles, or appears to handle, the personal information it already has.
Questions of privacy aside, using past search data to tailor ads is potentially great news for advertisers and users. Users will see less ads that have nothing to do with them. Advertisers will be happy knowing their ads are being seen by the best possible audience. Imagine the conversion rates!
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