Personalized Gmail Ads

Gmail will soon start to personalize ads based on your preferences.

For example, if you've recently read a lot of messages about cameras, maybe you'd like to see an offer from your local camera shop. On the other hand, if you've reported these messages as spam, or marked them 'not important' you might not want to see that offer. Soon, some of you will start seeing fewer ads overall, and focused on subjects we hope will be important to you, at the right time.

Unlike Google Search, you can disable personalized ads from Gmail's settings page. Just make sure that this option is not checked: "Show more useful ads by using importance signals from across my messages".

"Only a few users will notice the change to begin with, but as we improve it we'll roll it out more widely. As always, ads in Gmail are fully automated - no humans read your messages - and no messages or personally identifiable information about you is shared with advertisers. We've already cut down the number of ads shown per Gmail user by more than a third, and we hope these signals will enable us to continue to show fewer, better ads in Gmail," explains Google.

Google also tests a new ad format that includes offers and coupons for your local area, which might be related to Google Offers, a service that will compete with Groupon.

Gmail Tests Image Ads

Greg Sterling spotted image ads in Gmail and this seems to be a controversial Gmail experiment. A Google spokesperson said that Google "recently started experimenting with image ads on messages with heavy image content." Greg confirmed that the image ads aren't displayed next text-only messages and they sometimes appear next to HTML messages that include a lot of images, especially newsletters.



Gmail's image ads are contextually targeted, but it's unlikely that users will tolerate them well. After all, one of Gmail's selling points was that it only used relevant text ads. Here's Google's answer from 2005 to the question "What makes Gmail different?": "There are other differences in the way Gmail provides access to your email. For example, Gmail automatically groups an email and the replies to it as a conversation. That means you always see a message in its proper context. And there are no pop-ups or banner ads in Gmail, just relevant text ads and links to related pages". Google's explanation continues: "[Gmail ads] are small and unobtrusive. They don't fill half your screen and we don't make you read them just to get to your inbox. Ads are never inserted into the body text of either incoming or outgoing Gmail messages and you won't see any pop-ups or untargeted banner ads in Gmail."

It's interesting to see that a Gmail page about privacy explains that "showing relevant advertising offers more value to users than displaying random pop-ups or untargeted banner ads". The key words are "random" and "untargeted".

{ Thanks, Greg. }

Google Tests Gmail Ads Below Messages

Google tests a new ad block below messages. It's not available to everyone, so Google probably tests its effectiveness.

Jordon, a Gmail user who spotted the new ad format, thinks it's "a bit more direct than other GMail ads", while Daniel Spiewak finds it annoying. It's certainly more noticeable than the ads from the right sidebar and you might accidentally click it when you try to reply to a message.



{ Thanks, Websonic, Jordon and Vasu. }

Google's Plans to Improve Ad Targeting

The Wall Street Journal got hold of a confidential Google document from 2008 about interest-based advertising, a feature that was released last year. In addition of providing ads that match the content of a page, Google wants to improve ad quality by creating user profiles based on the sites you've visited.

Selling ads is Google's big money-maker, but the online-ad business is broadening away from Google's sweet spot, selling ads tied to the search-engine terms people use. Instead, advertisers want to target people based on more specific personal information such as hobbies, income, illnesses or circles of friends. (...) Few online companies have the potential to know as much about its users as Google. (...) Significantly, however, Google doesn't mix the separate pots of personal data. For instance, it doesn't use data gleaned from a person's Gmail account to target ads to that person elsewhere online.

Google's internal document suggests that this might change. Google could use data from properties like Gmail, Orkut and even search queries to improve ad targeting. Here's an extract from the document:

Over time, as the value of audience targeting is proven and the market reaction to these practices is realized, we will discuss the use of Search data. Google Search is the BEST source of user interests found on the Internet and would represent an immediate market differentiator with which no other player could compete. Search could be used to populate user interests. It can also be used to create new surround-search targeting options in which relevant display ads (or text ads) could be delivered on [Google Content Network] to a user within 15-60 minutes of a given search, whereby the timeliness of the ad would presumably increase its relevancy to the user.

It's important to note that the author of the memo is Aitan Weinberg, a former DoubleClick executive who is now a senior Google product manager for interest-based advertising. WSJ says that Google's executives were against using cookies to track people online, but the DoubleClick acquisition changed their perspective.

For the first time, Google had the ability to deliver ads targeted to individual people's computers. But just because it had the ability, Google didn't start using it. There was still too much internal resistance. (...) Tensions erupted during a meeting with about a dozen executives at Google's Mountain View, Calif., headquarters about 18 months ago when Messrs. Page and Brin shouted at each other over how aggressively Google should move into targeting, according to a person who had knowledge of the meeting. (...) Mr. Brin was more reluctant than Mr. Page, this person said. Eventually, he acquiesced and plans for Google to sell ads targeted to people's interests went ahead.

Despite the internal resistance, it's tempting to cross-correlate data about users. Showing contextual ads in Gmail seemed creepy at first, but the ads turned out to be quite useful.

{ via Google Blogoscoped }

Google Reveals AdSense's Revenue Share

Google revealed an important secret: the revenue shares for two AdSense services. Until now, publishers didn't know the percentage of the revenue that is paid by Google.

"AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites. (...) We pay our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations."

It's interesting to note that the revenue share for AdSense for content has never changed since the service was launched, back in 2003.

Sevices like Google Search, AdWords and AdSense are usually treated as black boxes, since Google rarely reveals specific information about its algorithms.

Google AdSense's help center still says that "each AdSense publisher receives a percentage of the cost an advertiser pays for user clicks or impressions on their ad. This percentage is referred to as the revenue share. Google does not disclose the revenue share for AdSense."

Google's financial results for the first quarter of this year, show that only 30% of Google's total revenue is from partner sites and the traffic acquisition cost (TAC) is 26% of the revenue. "The majority of TAC is related to amounts ultimately paid to our AdSense partners, which totaled $1.45 billion in the first quarter of 2010." Google's partner sites generated revenues, through AdSense, of $2.04 billion. Obviously, 1.45/2.04~=0.71, which is very close to the AdSense for Content revenue share.