Google’s Gmail to Serve Contextually Targeted Ads

NEW YORK Google said it intends to place contextually targeted ads alongside content within its new Gmail product, which is currently in test.

The Mountain View, Calif.-based company confirmed last week that it is testing a Web mail service that would feature a gigabyte of free storage [IQ Daily Briefing, April 1].

Links to relevant Google searches, Web pages and ads will appear next to the content of the e-mail. In an automated process, computers process the text in a message and match it to ads or related information in Google’s database.

Despite Google’s assurances that “No human reads your mail to target ads or other information without your consent,” the practice has raised concerns among some privacy advocates, who think it could violate users’ privacy rights. A Google representative said that its technology understands dynamically changing content, such as that found in Web mail, without human intervention. It is using the same technology that powers its AdSense program, which serves ads based on content on publishers’ sites.

While advertisers receive a record of the total number of impressions and clicks for their ads displayed in e-mails, they do not obtain any personal information about the person who viewed the ad, according to Gmail’s privacy policy.

Marketers who prefer not to have their ads displayed in e-mails may opt out of Google’s content network, the rep said. Those who participate in the company’s AdWords program have one of three options: They can show ads on Google only; on Google and its search partner sites, such as AOL; or on Google, its search partner sites and its content network of Web publishers, which includes Knight Ridder and Lycos.

Separately, Google said it plans to reduce the cost a marketer in its AdWords program pays for clicks on a page in its content network if data finds that a click is less likely to generate business results.

The search company said it would take into account factors such as what keywords or concepts triggered the ad, as well as the type of site on which the ad was served. While Google will adjust the cost-per-click downward, it will never raise it. For instance, a click on an ad for digital cameras on a Web page about photography tips may be worth less than a click on the same ad appearing next to a review for digital cameras.

It is the latest enhancement in Google’s “smart pricing” model, which is designed to automatically improve campaign performance. Previous upgrades included placing better-performing ads determined by click-through rate in higher positions and discounting an advertiser’s cost-per-click to the lowest amount possible, while ensuring that the ad remains above the next highest position.