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Google (NASDAQ:GOOG) to Launch ‘Social Ads’

Google (NASDAQ:GOOG) to Launch ‘Social Ads’


Google (NASDAQ:GOOG) to Launch ‘Social Ads’

Google to Launch Social AdsSAN FRANCISCO – On Friday, Google (NASDAQ:GOOG) announced plans to launch new product-endorsement advertisements that will incorporate photos, comments, and names of users in a move to match the ‘social ads’ pioneered by Facebook (NASDAQ:FB).

The changes, which Google announced through the company’s revised terms of service policy on Friday, lay the foundation for what the company is calling ‘shared endorsements’ on their sites as well as millions of other websites that are part of Google’s display advertising network.

The new types of advertisements would use the personal information of members of Google+, the social network the company started in 2011.  For example, if a Google+ user publicly endorsed a product or brand by clicking on the +1 button, that person’s image might appear in an ad for the product.

With this move, it is becoming clear that users are no longer just the customers, but they have also become the product that company’s such as Google and Facebook, among others can sell to marketers.  According to Marc Rotenberg, the director of online privacy group EPIC, the advertisements are attractive to marketers, but they unfairly commercialize Internet users’ images.  Rotenburg called it a ‘huge privacy problem and called on the Federal Trade Commission (FTC) to review the policy change to determine whether it violates a 2011 consent order Google entered into which prohibits the company from retroactively changing users’ privacy settings.

However, the FTC is currently on furlough during the budget showdown in Washington, D.C., and it is unclear when, if ever, they will be able to tackle this issue.  Children are exempt from the program, and Google+ will offer users the option of opting out.  Rotenberg said users ‘shouldn’t have to go back and restore their privacy defaults every time Google makes a change.’  According to Google, information that users had previously shared with a limited circle of friends will remain closed off.

For Google, the opportunity is to find new ways to monetize user data to drive advertising revenue, which is the main source of the company’s income.  The new change of service policy will go live on November 11, and it remains to be seen what the reaction will be from users and investors.  Shares of Google ended the week at $ 871.99.

About Eric Kelso

Eric Kelso covers market updates and stock related news.

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