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Alphabet 's (NASDAQ: GOOGL ) division Google is leaving no stone unturned to bolster presence further in the advertisement world.
Per a recent Bloomberg report, Google, in order to enhance its offerings to the advertisers, had secretly partnered with Mastercard (NYSE: MA ) last year to access the data on shopping habits of the U.S customers holding Mastercard.
To be precise, the data indicates whether a click on an online products ad by a customer is leading to ultimate purchase of that product at physical stores. Notably, this data is very crucial for the advertisers and marketers considering their huge ad spending as it will aid them to modify their ad in order to boost their product sales.
We believe this move of Google is not only benefiting its position in the ad market but also fortifying its presence in the retail space by placing its algorithms in a better way.
Coming to the price performance, shares of Alphabet have returned 17% on a year-to-date basis against the industry 's loss of 5%.
Strong Steps to Address Data Privacy Issues
Google's initiatives to acquire consumer data, especially transaction and card data might lead to another big data privacy challenge. In fact, this is an issue that the tech giant has been plagued with quite regularly.
However, to counter this challenge, the company has already developed double-blind encryption technology which was launched last year.
The technology does not allow Google and its payment partners to access the personal card details of the users.
Consequently, the innovative ad tools are not likely to raise any privacy concerns.
Increasing Retail Focus With Ad Initiatives
Google's strong efforts toward adding efficiency to the marketers' ad campaigns will continue to aid its market share in the ad space.
Apart from the above mentioned partnership, the company is aggressively looking into deals with other credit/debit card and payment companies to gather data on the customers' purchases made via the payment cards.
With respect to this, the company rolled out Store Sales Measurement service and reportedly, it collected almost 70% of U.S. payment card transactions data. Further, this service shows the effectiveness of an online advertisement.
Moreover, the company provides data on the conversion of an online product ad clicked and viewed by a customer into its offline purchase via Mastercard within 30 days.
These retail spending measurement tools are likely to aid the advertisers in enhancing the omni-channel performance.
Additionally, Google's Shopping campaigns have helped several retailers to reach the right customers, consequently, boosting their sales.
These endeavors will help the company in attracting more advertisers to its platform, consequently expanding its advertiser base. This will drive its ad revenues in the near term as well as in the long run. Further, better ads will drive the traffic on the company's platform.
Further, this will help the company in gaining competitive edge against other tech giants like Facebook (NASDAQ: FB ) and Twitter (NYSE: TWTR ) which are also adopting unique strategies such as beacon marketing to bolster their presence in the retail ad sector.
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Alphabet Inc. Revenue (TTM)
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