Google's Targeted Ads Prove Surprisingly Unpopular

Google's bread and butter is online advertising. The company makes a large percentage of its revenue from ads so it's no surprise that it takes the business very seriously. One promising feature introduced more than half a year ago, targeted ads, looked poised to be the next big thing in online marketing but now it seems that even Google gets it wrong once in a while as the ad option has gotten a lukewarm reception from advertisers.

Jim Brock, founder of PrivacyChoice and former senior vice president at Yahoo, did a little number crunching and estimated that only about one quarter of AdSense partner sites make use of the interest-based targeted ad feature. Arriving at the figure takes a few approximations but as a rough estimate, it will do. Brock used Google and Yahoo to see how many sites link to Google's privacy policy, something that is required for the ad-targeting program. Google shows 277,000, Yahoo 224,000, so he decided to choose a number half way between them. Considering that Google claims it has about one million AdSense partner sites, it's clear that only about 25 percent of them use the program.

One quarter may not seem like such a big disappointment, the program has been running for just seven months, but considering the big potential increase in ad revenue, it's still rather low. Of course, this view doesn't account for the size of the sites using the program but even so it seems strange that so few have opted for ad targeting.

One explanation for their reluctance may be that the privacy implications seem too big and messy to be worth the trouble. This does appear plausible, but revenue usually takes precedence over user privacy. Another reason may be that Google still hasn't managed to get enough data to provide the interests for most of its users and for those that it does, the interests aren't too appealing to advertisers. But there may be yet another reason for the apathy: maybe targeted ads don't really work that well. This isn't really backed by any data, and Google isn't talking about it, but if it is true, it does add an interesting twist to the debate over targeted ads.