The Trouble with Gerrold: Privacy
November 6, 2012 —
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Related Search Term(s): privacy, security
If you were to browse through my computer, looking at my Amazon and eBay searches, you would quickly find that I like classical music, 3D movies, tribute albums that cover the Beatles’ songs, and little toy figures of Mickey Mouse as either Steamboat Willy or The Sorcerer’s Apprentice. And if you browse through my Facebook postings, you’ll see that I like dark chocolate, “Dexter” (the TV series) and elephants.
This is most of what Google, Amazon and Facebook can tell you about me. They won’t, because they say they’re committed to the privacy of their users, but this is what they know about me and this is why Amazon shows me ads for the 3D Blu-ray release of “Dial M For Murder,” eBay tells me that I might be interested in bidding on Joshua Rifkin’s “Baroque Beatles Book” on CD, and Facebook tells me about various matchmaking services—and the occasional underwear ad as well. (I haven’t figured that last one out.)
I don’t normally click on Google’s ads, perhaps three times in the past three years, and only once have I made a purchase from a Gmail ad. I estimate that Google pushes at least 10,000 ads a year to me through Gmail and Google search. If I buy only one item out of 10,000 offers, that’s not exactly cost-effective for Google.
But all those ads are automatically generated, based on the content of my searches and e-mails, and cost Google almost nothing to send. Multiply that by a billion users worldwide and the return rate on those ads will justify the cost. One in 10,000 becomes a hundred thousand click-throughs out of every billion pushes. If even 1% of those click-throughs result in a purchase, that’s a thousand sales. If your product sells for $100, you’ve grossed a hundred thousand dollars.
I suspect that Amazon generates a much higher rate of return because the person came to the site looking for a specific item, already in a browsing and buying mood. Amazon keeps a record of previous purchases and offers suggestions based on that information.