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September 1, 2018

Secret ad deal with MasterCard lets Google track shoppers’ retail purchases

by John_A

Josh Edelson/Getty Images

In a secret deal estimated to be worth millions of dollars, Google paid MasterCard to track whether online ad clicks translated to sales inside retail stores. According to Bloomberg, Google has for the past year used its access to MasterCard data to gain insight into how online ads affect retail spending in an effort to bolster its $95.4 billion ad business.

When you click on an ad while logged into your Google account, your action is recorded — even if the click doesn’t convert into an immediate online sale. Many users opt to research for a product online before making the purchase at a retail store. Based on the MasterCard deal, when you head into a store to buy the item, Google will be able to link your ad click to your transaction by using MasterCard’s data, connecting the email address that you’ve shared with the store to obtain a digital copy of your receipt, or through third-party payment processors.

“Alphabet Inc.’s Google and Mastercard Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly,” the publication reported. “The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.”

In the past, Google tried to make connection between online ad clicks and sales in physical stores by relying on Google Wallet, beacons, and location data on users’ phones, but this partnership with MasterCard provides the ad giant with the most direct correlation data to confirm ad conversions.

Google also shares some of its users’ shopping data with advertising partners through its Store Sales Measurement program. Google claimed that it had access to approximately 70 percent of U.S. credit and debit cards, but it’s unclear if Google has deals in place with other credit card issuers outside of MasterCard.

With access to spending data from two billion MasterCard shoppers, the deal poses privacy concerns on how online and offline information is shared and what information Google needs to disclose to its users.

“Google is testing the data service with a ‘small group’ of advertisers in the U.S., according to a spokeswoman,” Bloomberg reported. “With it, marketers see aggregate sales figures and estimates of how many [sales] they can attribute to Google ads — but they don’t see a shopper’s personal information, how much they spend, or what exactly they buy.”

According to Future Privacy Forum, a nonprofit that receives funding from Google, Google had created an encryption method to separate data that it collects online and offline so that neither Google nor its payment partners have access to each other’s data, to mitigate privacy concerns and minimize risks if the data was leaked.

Ad agencies, on the other hand, always want to know more information, and they have been actively talking to Google to try to access such data as how much users spend and the specific time of day purchases are made.

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