I just discovered that Google launched a new AdWords feature to help brick and mortar store owners track the effect their online spending is having in the offline world. The way it works is that if a user sees an ad for a particular store or product on their phone and then ends up close (based on the location sharing option in iOS and Android) to the store in question, Google will use that information as a signal that the ad was the cause of the store visit. It’s not supposed to be perfectly accurate but the idea is that with enough data Google can come up with models that can estimate the actual numbers.

Mapping online spend to offline conversions has been the holy grail ever since advertisers started spending online and with the proliferation of smart phones that track everything we’re getting closer and closer to solving that problem. For centuries advertisers had to estimate and have faith that their spend in newspapers, magazines, and public spaces was having an impact with no good way of measuring the results. The ability to track a person’s location is immensely powerful and we’ll start seeing more and more use cases. Using a similar approach it may even be possible to see what effect a billboard ad has: monitor the locations of your ads and if anyone walks by them assign a probability that they’ve seen it. Then if they end up in your store you can assume they got there by looking at the ad. It’s significantly more difficult than that since people see hundreds of ads a day and the result is not always immediate but even having a tiny bit of data is better than none at all.

This should make everyone a lot more concerned about their privacy. In the past it was simple to have distinct lives - home versus work, inside versus outside, online versus offline - but with our attachment to modern gadgets the lines are rapidly blurring. Being aware is the first step in avoiding being tracked but it’s only a short term solution. As technology improves we’ll rely more and more on passive benefits which when coupled with better and faster data mining algorithms will make it very hard to live “off-grid.” We rely on government to preserve our privacy but I worry that we’re moving too quickly for the legislative process to have any real impact. Bitcoin and other distributed systems may be able to counter this decrease in privacy and I’m curious to see what sort of counter-systems they’re able to produce.