If you start to doubt how much passion Google engineers have for their ad products -- or how targeted Web ads can be -- check out this video interview with Adam Sah.
Sah, architect for the company's gadget content directory, raised some eyebrows during a panel discussion at a Digital Hollywood event when he said that Google's technology could make serving up relevant Web ads "beautiful."
Google now has the ability to serve up a gadget box, on its own Web
sites or those of its partners, that an advertiser can fill with any
form of content they wish -- from an HD movie trailer to an interactive
game -- based on data that it knows about a Web site's users.
Google is combining these "fully interactive applications" with targeting and rich-media display-ad technology it acquired with DoubleClick, so it can now serve up these kinds of ads in both search and display-ad campaigns.
The lines between those two types of ads could start to blur if enough advertisers opt for gadget ads.
This type of ability helps explain why Google has been beating up Yahoo and Microsoft in the online ad market, and why the anti-trust regulators took a long look at the Google-DoubleClick deal. The combined company now has the best search technology and the best ad-targeting service on the Web.
As gadgets start to appear on social networking sites that are part of the Google-led OpenSocial coalition, Sah thinks we'll soon see ads in those gadgets that are as compelling as the non-ad content they're paired with.
When an ad is "hyper-relevant" to the point where it's not noticed as an intrusion, "that's beautiful," says Sah, who used the example of how he bought his own eyeglasses by starting with a Google search that turned up an ad with pictures of ones he liked.
Privacy advocates might cringe when they hear about highly-targeted ads, but there's little doubt that consumers tend to click on them, which is why Google's search ad revenue went up last quarter even though its click-through rate went down. That's because those who did click were buying at higher rates because the ads they were served were more relevant than before Google tweaked its technology.
Before this becomes some homage to the Google algorithm, I'll share what Julie Davenport of CNet said about an Apple ad that consistently drives up the user engagement time for any page where it runs. "That ad is a great piece of content," says Davenport, CNet's VP of media and marketing solutions.
So the creative side of an ad and the targeting technology behind it can both be beautiful, according to folks in the Web ad business.
Hyper-relevancy can only come when the Google algorithm knows a lot about the search history of consumers and can combine it with data from its affiliates' Web sites, which is where the privacy concerns arise.
Sah, who sits on an internal Google committee that screens ads for privacy issues, says the company -- for its own good -- will always err on the side of the user.
"It's important to be very paranoid," about what a user's reaction will be, especially to seeing an ad that appears to be individually targeted, Sah says. "There's lots of cases where in the end, society decided that the ads are OK, but the initial reaction was negative."
That makes it sound like Google is going to let other ad networks push the envelope on ad privacy, then use its massive scale to deliver the same kind of ads once users get used to them.
And who else will be there to push the envelope? Broadband providers are one possibility, especially as DVRs integrated into cable MSO's begin to replace third-party boxes made by TiVo and others.
During the panel discussion, one audience member questioned whether Google's data gathering and targeting is any different than those of NebuAd. That ad startup, which helps ISPs gather demographic and viewing data on their subscribers, was grilled in a Congressional hearing late last month over privacy concerns.
"The DVR produces a wealth of rich data about who the audience is," says Scott Brown, Nielsen's senior VP of digital platforms. The measurement business is about to start looking at much more granular data as it becomes available, Brown says.
The key to addressing privacy concerns, as Glam Media's Kiumarse Zamanian told us here, is to not connect Web usage data with personally identifiable information like your name, email address. Or maybe your cable subscriber account or address?
Any ad that appears to be individually targeted will likely seem too "spooky" for consumers and prompt a backlash, Zamanian said during the panel discussion.
My guess is we'll all be having more of those spooky experiences soon. Whether we'll be able to opt out of them, or just have to get used to being spooked out, will depend on whether Congress can pass any comprehensive privacy legislation. More to come on that.