Inside Google and Mastercard’s Secret Sales Tracking Deal

In an article titled Google and Mastercard Cut a Secret Ad Deal to Track Retail Sales, Bloomberg reported that:

"For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the US, thanks, in part to a stockpile of Mastercard transactions that Google paid for. But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. When Google announced the service, called "Store Sales Measurement," it said it had access to "approximately 70%" of U.S. credit and debit cards through partners, without naming them. That 70% could mean that the company has deals with other credit card companies, totaling 70% of people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70% of those are logged into Google accounts like Gmail when they click on a Google search ad."

With heightened privacy concerns and fears, Google and Mastercard were quick to address those concerns. According to a Google spokesperson:

"Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information. We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.”

And a spokesperson for the card network was quoted as saying:

"Mastercard shares transaction trends with merchants and their service providers to help them measure the effectiveness of their advertising campaigns. The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants. No individual transaction or personal data is provided. We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers."

Holes in the Story?

Mercator Advisory Group, one of the leading analyst firms in the payments space, weighed in on this story, asking Is Google Really in Cahoots with Mastercard for Cardholder Data? According to Mercator, there are some holes in the story:

"First, in order for this information to be really of value to merchants, it needs to include cardholder data from more than just Mastercard. Visa has stated that they do not have a data sharing relationship like this with Google. Also, the card networks often don’t capture itemized data. They wouldn’t be able to link the browser activity for a specific item to the actual purchase of the same item."

What is Google Really Doing?

To get a better picture of what's really going on here, I turned to a source (who prefers to remain anonymous) with insider information about what Google is doing with the Mastercard data. According to my source:

"Proving that online ads actual support "physical" purchases has been a serious hole in both the search engine providers and "merchant acquirers" story. What they're doing is matching Google ad-word searches by a particular user to a Mastercard purchase transaction they find for that user and determining:

  • Did the user search for that product online and where did they search?
  • Did they purchase that item at a physical store?
  • How long after the search did the purchase transaction consummate?

Think of this use case: I'm walking down the street, think of something I need to buy, search on my mobile phone, find the product, find a "buy nearest me" recommendation and use my Mastercard/bank card issuer banking app to walk into a physical store and make the purchase. So now the retailer/advertiser has a stronger reason to create valuable alliances with the brand/card issuers.

Google has a developer's toolkit (beta) already available to allow mobile app developers to build similar data collection/matching capabilities."

Mercator's Sarah Grotta said it best when she wrote "The problem here is that the mere perception of wrongfully sharing private data can be very damaging, regardless of reality."

Bloomberg wrote that "Google can anonymously match existing user profiles to purchases made in physical stores." Based on my source's description of what Google is doing, it hardly sounds "anonymous"--the firms do have a way of tying the purchase data back to identifiable consumers (or at least Google does).

But does it really matter if they don't?

If Google knows your online behavior, your offline behavior, and has ways to advertise to you and message you based on that information, does it really matter if they know your name?

The Bloomberg story is just another data point in the growing big data backlash movement.

Bottom line: Community banks and credit unions who position themselves as customer (or member) advocates, differentiated from the "big bad evil banks" need to be concerned about the public's perceptions of how the networks are sharing (or selling) data.

Ron Shevlin
Director of Research
Cornerstone Advisors