By Rolfe Winkler And Jack Marshall
The war for advertising dollars between Google Inc. and Facebook
Inc. may add a new front: email addresses.
Google is in talks to allow advertisers to target ads in search
results at their existing customers, according to people familiar
with the matter. Google has suggested that advertisers hand over
customer information such as email addresses, which Google would
then use to target the ads, the people said.
The move would mimic a popular advertising service launched in
2012 by Facebook called "custom audiences," which is helping the
social network chip away at Google's lead in digital advertising.
Facebook reported ad revenue grew 65% to $11.5 billion in 2014
while Google's advertising revenue grew 17% to $59.1 billion.
The proposed ads highlight the increasingly sophisticated ways
that Internet companies track users' online and offline activities
for marketing purposes. Such tactics might raise questions about
how well customers understand what businesses do with personal
information they volunteer to a website or through a store loyalty
program.
The idea could also potentially appeal to any Web publisher that
collects user data. Wall Street Journal-owner News Corp is
exploring the possibility of offering advertisers similar
functionality, according to people familiar with the matter. News
Corp has suggested to marketers that they could target and track
ads to their customers across the media company's properties using
their email addresses.
Two people familiar with the matter said Google has talked about
launching the new ads later this year or early next year. "We're
always discussing potential product ideas with our clients," a
Google spokesman said, "but have nothing new to share at this
time."
Here's an example of how Google's ads would work, according to
the people familiar with the matter: An office-supply retailer
would give Google the email addresses of recent printer purchasers.
The retailer could then bid to show ads when those people search
for printer ink on google.com. The retailer could also tailor its
Google ads based on other information it knows about the customer,
including age, gender or prior purchases.
Google could also match customers using their Gmail addresses.
Many users of Google services including Gmail, YouTube and Google
Maps provide secondary email addresses and phone numbers that also
could be used for matches.
For now, the ads would be limited to search results and wouldn't
include banner ads, the people familiar with the matter said.
The ads would give marketers another way to reach customers when
they are searching for products rather than providing more general
ads when they aren't necessarily shopping. The data could also help
both Google and advertisers better understand the relationship
between online ads and consumers' real-world activities and
purchases.
Facebook's similar "custom audiences" program helps advertisers
target customers as they scroll through its Web page and mobile
app. Facebook has detailed personal information for many of its 1.4
billion users, including their names, email addresses and phone
numbers, which it matches against the customer information uploaded
by advertisers.
Such ads help Facebook close the gap with Google in terms of Web
users' intent. Google's $60 billion annual ad business is built
around user searches, such as "flights to Charlotte" or "Chicago
Cubs baseball hat." Facebook has personal information on its users,
but they aren't necessarily flipping through their news feed
looking to buy a flat-screen TV or to book a hotel room.
With custom audiences, Facebook can let a shoe retailer upload a
list of people who bought running shoes two years ago and then
target those people with ads because they may need another pair
soon.
Facebook also allows advertisers to compile lists of
"lookalikes"--that is, people that Facebook believes are similar to
the advertisers' customers based on their age, gender or interests.
Such ads are thought to be effective. Adobe Inc.'s Media Optimizer
unit reported in one case study that lookalike ads led to triple
the sales of regular Facebook ads.
Google is also discussing the possibility of creating
"lookalike" audiences, according to one of the people familiar with
the matter.
The company already allows advertisers to target search ads to
users who have previously visited the advertiser's website. The
proposed ads would be different because they would rely on
information that customers have provided themselves, such as their
email address.
Write to Rolfe Winkler at rolfe.winkler@wsj.com and Jack
Marshall at Jack.Marshall@wsj.com
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