Google will use its surveillance of web surfing habits to figure out which ads are best suited to each individual's interests - a practice likely to illuminate just how much the internet search leader has been learning about millions of people around the world.
Under the program, someone who frequents sites about dogs might see more ads for flea treatment products even when visiting another web destination that has nothing to do with pets.
The tactic relies on technology that Google got last year in a $3.2 billion acquisition of the internet ad service DoubleClick. Some of the opposition to the deal revolved around potential privacy intrusions, but Google overcame those misgivings during an extensive review to win regulators' approval for the deal.
The ads, set to debut within the next few weeks, initially will appear on Google's YouTube and thousands of other sites that belong to Google's ad network.
Google is following major rivals like Yahoo and Microsoft that have already been customising ads based on the past activities of specific web browsers. Until now, Google had been tying its ads solely to search requests and the general content on web pages.
Although Yahoo and Microsoft already have been tying ads to people's presumed interests, Google's embrace of this "behavioral" targeting is more troubling to privacy watchdogs. That is because the Mountain View-based company already has used its dominant position in the internet search market to build a huge database of potentially sensitive information about the kinds of things that people are looking for on the web.
Now Google is taking it a step further by tracking people's favourite websites to divine individual tastes and then package ads falling under the same areas of interest.
The company intensified its monitoring activity in December when it began putting a sliver of DoubleClick's computer code, called a "cookie," on its advertising partners' websites.
"This is a very serious development," said Marc Rotenberg, executive director of the Electronic Privacy Information Centre. "I don't think the world's largest search engine should be in the business of profiling people."
Rotenberg is hoping Google's embrace of behavioural targeting prompts the Federal Trade Commission to take another look at the DoubleClick acquisition and perhaps mandate privacy safeguards.
Hoping to avoid a backlash and appease regulators, Google has set up its system so individuals can specify their areas of interest or shun certain forms of advertising.
"We are pleased that our launch of interest-based advertising includes innovative, consumer-friendly features to provide meaningful transparency and choice for our users," Nicole Wong, Google's deputy general counsel, wrote in a blog posting.
The Progress & Freedom Foundation, a Washington-based think tank, applauded Google for creating a "gold standard" that puts the company's stamp on behavioural targeting ads and provides clear explanations on how to avoid them. The group brushed off the criticism of Google's expansion into behavioural targeting as "paroxysms of privacy hysteria."
Google is betting most people will enjoy seeing more ads catering to their interests. In the process, Google is hoping it can boost its revenue, which climbed 31 per cent to nearly $22 billion last year despite a recession that hammered many of its customers and partners.
Anyone can also opt out of the targeting program, a choice that Google probably realizes the overwhelming majority of people won't take the time to do, said Jeff Chester, executive director of the Centre for Digital Democracy. Both Yahoo and Microsoft also offer opt-out features.
Echoing a familiar sentiment among consumer activists, Chester believes people should be subjected to behavioural targeting only if they give their explicit permission.
"It would have been nice if Google had taken a stand against behavioural targeting instead of endorsing the model," Chester said. "We are now in an arms race of digital data collection where companies are trying to outdo each other in pursuit of the 21st century's Holy Grail - advertising."
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