I'm not sure why Google would care to know those things. The most profitable form of advertising is a direct search. "Bears tickets" is advertising gold. Joe liking the Bears on Facebook is not on the same level. Google might get incremental value on having the additional data but I don't think it's worth the reputation hit.
An optimist would say that's exposed so you can wipe it clean, a pessimist would say that's exposed so you can refine your profile to be better advertised to.
There's a whole spectrum of user data with varying value to advertisers. Google already rocked search big time and now they're on to the rest of the online advertising budget.
Ad networks (like me!) use demographic, psychographic, and behavioral data to target most display ad campaigns. I have run campaigns specifically sold as "market to Nigerian immigrants living in America" or "moms 25-35 interested in beauty products." And even when not specifically targeting those audiences, one can often find surprising performance pockets from these audience intersections- good for my performance and useful info to bubble back up to the advertiser.
And... guess who's the current biggest display ad platform?
And why should we trust you (or Google etc) with our data? Perhaps you (they) will exploit our ignorance and manipulate our preferences?
Not everyone in the world can be assured their human rights and exposing personal information can lead to persecution. Therefore, there is a risk attributed to this data collection, at least for some. Not everyone is willing or able to take these risks.
While I can agree that this data may be useful for both customer and advertiser, its potential misuse should not be ignored. And when these networks deny the use of pseudonyms, they force their users to take (unnecessary) risks.
I would like to see some studies on the effectiveness of the various targeting criteria. Sometimes i think marketers obsess on targeting criteria that may not be so effective, missing other psychological effects. For example, i thought google's idea of showing you the same ad across websites to make a lasting impression was a no-brainer, yet it was missing for years. Also what about other factors such as time-of-day, or recently clicked ads?
In this case the law of diminishing returns is offset by the massive movement from TV-based advertising to web-based advertising. As long as TV loses add dollars, there will be plenty of "rising tide" to lift both Facebook and Google in terms of increased advertising revenues.
On the flip side, that's a confounding factor that makes it hard to compare Facebook to Google in terms of some type of battle for advertising dollars. For the time being they should both see revenue growth, irregardless of who does a better job.
Perhaps if several social sites offer targeted ads with the same level of precision it may decrease the ads' prices since the ads budget won't grow accordingly ? (then it would mean that people are using several services at the same time and not migrating from one to another)
Google's customers do care about better targeting, and don't give a damn about google's reputation. If google gives them inferior product they'll lose money. But worse , they'll open an opportunity for a competitor.
Google understands that ignoring competitors , even niche ones , can be a long term risk. So they work on controlling all the advertising market. I think that's also the biggest reason behind Android: google makes very little money with it. But it's a great defensive strategy.
