I have heard the notion of Google being analogous to a bank for a number of years. Recently, Jim Sterne also referred to this bank analogy while we were discussing online privacy at the Orion Analytics panel of SES London . So I wanted share and expand upon this discussion.

Please take a moment to read my disclaimer before continuing – that is, the views express on this site are entirely my own and do not represent those of my employer.

Is Google entering into online banking?

In this respect no (I am not considering Checkout here). What I mean by being analogous to a bank, is in the way that data itself has become "currency". Information has always been valuable – no one likes to be the last to know, and being the first to know gives you a competitive advantage. So whether online or not, the storage and access of data, its security and privacy, is of paramount importance to anyone who hands over information to be stored by a third party.

That is pretty much everybody with Internet access and includes individuals, small businesses and corporations alike. Google occupying such a strong online position – the conduit for many people to find information, products, businesses etc. obviously has an important role to play when it come to data privacy and security.

It’s important that privacy and security have no intrinsic value

A key factor that makes a good, secure and private data storage system, is the strict application of a one size fits all privacy and security policy. That is, regardless of whether you are one of the worlds largest brands spending millions of dollars on operations, manufacturing or marketing, or a small company selling your handicrafts locally – your data should be treated with equal importance.

As an example, imagine if a search engine or bank provided a greater level of security and privacy to large advertisers rather than smaller advertisers (or to those that saved more than others). Even the perception of such a practice would be disastrous for the organisation in charge of protecting your data "currency". You of course want bullet proof controls whether you save $1 or $100 million dollars. That is how the banking system works and is also how Google operates with respect to handling all visitor and customer data.

Who sees my Google Analytics data within Google?

"Does it matter?" was the response from Jim Sterne on the SES panel. "Seriously, do you worry who at your bank knows how much money you have? Google has way too much at stake to allow misuse of your data." If you trust the bank to store or loan you money, then by default you trust the procedures, access control systems and employees of that bank to handle your finances appropriately.

Would you really expect the bank to produce a Terms of Service that explicitly names individuals that can view your transactions data? No bank is going to do that and similarly no search engine or hosted analytics provider should do either, for the simple reason that it is unworkable. And if it is unworkable, then inevitably the system will break down and that poses a greater risk to security and privacy.

If you really don’t feel comfortable sharing your web visitor data (and that can be for perfectly valid reasons), then bring your data in-house. That is, run server-side web analytics tools such as Urchin and take responsibility for the storage and processing of the data yourself.

How does using Google Analytics effect my AdWords prices?

It doesn’t. Why? Because it is the market that determines the price of your bids in the open AdWords auction system, not Google itself. Ian Thomas (Microsoft), challenged this by making the point that Google uses the Quality Score system. This system effectively scans your landing pages to ensure a good match between them and your ad copy. The thinking is that an ad mentioning terms that cannot be found on your landing pages is not a good experience for potential visitors. Hence, if this was the case, such ads would result in a higher cost to the advertiser than those with a better quality score*.

The AdWords Quality Score system is so effective at improving the user experience (by encouraging marketers to improve their ads and landing pages and therefore reduce their cost), that other suppliers have followed suit – for example, Microsoft adCenter and Yahoo! Search Marketing. I don’t know the details of those systems, but the important point is that it is not the ad serving platform determining the bid price. Yes, it is measuring it, but it is the market (advertising competitors and end-users) that ultimately determine the bid price you pay.

*Note: Many other factors are also taken into account when calculating Quality Scores. For example, historical click-throughs – firstly do visitors click on your ads compared to your competitors, and if so, do visitors click on your ad and then within a short space of time return back to the Google results to click on other ads? Such behaviour would also indicate a poor user experience.

Do you fear Google? Is sharing visitor data with Google such a bad thing? Clearly if you are a Microsoft, E-bay, Amazon, Expedia etc., I don’t expect you to use Google Analytics. But what about you? Please share your views with me (not Google!) via a comment.