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Google tracks offline purchasing (GOOGL)

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Google’s new service, called Google Attribution, will allow the company to track offline consumer purchasing activity in a means to improve success rates for advertisers.

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The firm will leverage third-party partnerships that reportedly give it access to 70% of US credit and debit card transactions, as well as its own tools like Maps, to figure out when consumers visit a retail store and make a purchase. It will then match that batched data to users who saw ads for specific products to figure out if those exposed to ads were buying those offerings offline. It's worth noting that physical retail still dwarfs e-commerce, so this could be particularly useful.

This could be an affront to consumer privacy at a time when concern is at a high. Google asserts that the information is protected — for example, the tech company can see that 1,000 people went to a restaurant they were served an ad for, but not which people, according to CNN Money. But security experts remain concerned, because of how challenging it is to truly mask data. And rightfully so, because consumer privacy concerns are at an all-time high — only half of consumers trust businesses to protect their payments information. This distrust is largely a result of high-profile breaches over the past several years in a number of settings, including Target and JPMorgan Chase, that have contributed to rising overall identity fraud in the US and worldwide.

But it’s illustrative of why gathering payments information is valuable to tech companies. This is an indirect method for Google, since it relies on partnerships and numerous data sources. But tech companies have increasingly been making direct payments plays, like peer-to-peer (P2P) offerings or commerce opportunities in apps like Facebook Messenger. BI Intelligence has long noted that this could have a clear advertising use case, especially since the payments themselves aren’t particularly profitable — by gleaning information about consumer purchasing behaviors, these companies can give data to advertisers that allow them to more precisely target potential consumers, for example. Google’s actions point to that, and if the backlash isn’t too strong, this could lead to more tech commerce plays moving forward.

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