Thursday, June 26, 2008

Gmail? I'm not scared.

A friend of mine is having spam problems. He commented that he'd consider transferring his email to gmail, but was concerned about the privacy issues associated with gmail. The issue is that gmail uses software to scan your email and provide targeted ads to you. I don't worry about this for many reasons, not the least of which is that I don't currently encrypt my email. As a consequence it's hard to complain about google software scanning my email when it's already scanned by other software to determine where it's going, to determine if it's got a virus, to figure out if I'm reavealing insider information when I use my companies email, etc. None of that stops me from using email. Here's an article that articulates more reasons not to worry about gmail and privacy:

But when it comes to the advertising part of gmail, I'm actually quite in favor of it. I *want* google to deliver targeted ads to me... as long as the targeting is good enough. One of the lessons that I've learned from Economics is that division of labor, specialization, and trade makes us all wealthier. So I want to know as many people who are already specializing in things that I want so that I don't have to do (poorly) those things that they are specialists at.

Old media advertising (TV, radio, newspaper, billboard) is generally annoying because 99.9% of the time, it wasn't selling something that I wanted. For example, I will never, ever need tampons. Seeing a tampon commercial in the middle of a program that I like is a waste of my time. Time is a rare resource. Spending it on tampon commercials is annoying. But more broadly, most of TV, radio, newspaper, billboard advertising is annoying because I don't want most of what is advertised. I'm not their target audience. Advertisers have no choice but to create ads that hit a huge population in hopes that some small percentage of that population is in the market for their product. A few people are interested. Most people are annoyed.

Now, there's some targeting with TV commercials. You don't see a lot of tampon commercials during football games. Nor do you see a lot of beer commercials on the Lifetime Network. But these are really crude forms of targeting. Most of the time these ads still miss their mark. If you could increase the effectiveness of the targeting, then advertising becomes beneficial more often for more people.

An example: I am currently in the market for a car that gets better gas mileage than the minivan I drive around. So I take a little bit more interest in any ads that are selling cars. But I take a great deal of interest in ads that are selling small, inexpensive, fuel-efficient cars. If I could only look at those ads, I would seek them out to find out what's available. In fact, that's what I do when I search the web for car deals: I'm seeking out information about people who have something to sell. In other words I'm seeking out advertising. And we all do this. We all, at some point or another, seek out advertising. It's not the advertising that's bad. It's the missed target that is annoying to us.

Now imagine that google could infer what I'm in the market for without me having to tell explicitly them. Then they'd deliver ads to me that I already want. That's not just cool technology, it's efficient technology: I get the same information without having to do the work to find it. It finds me.

So receiving ads from gmail really doesn't bother me. In fact, the fact that someone has already written a program to determine my interests and what I might be in the market for, and go find ads to deliver to me, and is doing it for free, is a big benefit to me. I get the information that I want without having to work for it.

Of course, if google's targeting is bad, then I move back onto the annoyed side of the fence. But google has every incentive to target me correctly. If they don't, then I'm simply freeloading on their service - because I won't buy things that I don't want. If they target me correctly, then they can recover the costs of providing me this free service. And everyone's better off.

Disclaimer: This blog is hosted on a google product. I don't work for google. I interviewed with them once. I'm not trying to push their products. Use them, don't use them. I don't care. I have a gmail account (actually two) that I don't use that much.


Anonymous said...

My concern isn't advertisements. My concern is the vast amount of information consolidated in one data store. Google collects information.

I'm a pretty ethical and law-abiding guy, but I don't want third parties to hold information about me, my likes, dislikes, opinions, friends, family, housing or income situation, etc.

I don't care about ads. I care about information stores which are big targets for information gatherers.

The government is an information gatherer which has requested data from a variety of information sources (telcos? yahoo? aol?).

I don't trust large organizations of information gatherers or information collectors. EVEN IF the organization is ethical, it is super easy to infiltrate and redistribute the information.

mjh said...

That's a good point that I had not considered. I'll have to think about that.

Anonymous said...

Here's an example when a government agency has forced Google to turn over private information about Google's customers.

It's also interesting what Google didn't have to release.

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