Gavin Baker
+ Your AuthorsArchive @GavinSBaker Managing Partner & CIO, Atreides Management LP. Formerly Fidelity OTC Fund. No investment advice, views my own. Nov. 21, 2020 2 min read

1) “Google will not use data from Google Pay for targeting ads.”

Likely true. And irrelevant.

“Amateurs talk strategy. Professionals talk logistics.”

Targeting = strategy. Attribution = logistics.

The data will be used for attribution. 

2) The combination of targeting AND attribution drives advertising spend.

They don’t need the data for targeting.

Google - like everyone - is *much* better at targeting than they are at multi-touch attribution.

Last click attribution was the best possible world for Google.

3) The problem is that Facebook has successfully moved the world to multi-touch attribution. The Facebook pixel is everywhere.

I will never forget Sridhar saying at a conference circa 2015/2016 that Google had to accept that the world had moved to multi-touch.

4) Facebook is about to have their own closed loop system with “Shops.”

Google Pay creates a potentially even more powerful closed loop system.

Facebook can obviously do the same.

5) Google has been saying for years that the real value of payments to them was for attribution.

Success with this effort - and a likely future effort from Facebook - would further reinforce their dominance.

6) The large internet platforms were already immensely advantaged by their ability to do deterministic cross-device user ID via their billions of logged in users when everyone else had to do probabilistic.

GDPR reinforced this.

Having dominant digital wallets would cement it.

7) Also kinda funny that offers - which will be included in Google Pay - are a form of advertising. 😀

8) Interesting to imagine a world where Google had gotten really serious about payments, cloud computing, G suite and messaging in 2012.

They probably already would have been broken up.

9) Instead, they got serious about cloud computing in 2018 (Kurian), G suite in 2019 (Soltero) and payments in 2020 (Google Pay).

They still aren’t really serious about messaging, although was recently unified under Soltero so *maybe* they are finally getting focused.

10 Would not want to be a neobank in this world.

Google will acquire users at much lower cost, has an advantage with the automated gmail scanning option and *never* needs to make money on Google Pay.

Better ROAS for their advertisers will drive revenue.

11) The incumbent banks - like Citi - will perform the customer service functions here that the OTAs provide for Google in travel.

Citi in an an arguably position than the OTAs here with respect to Google.

All this will only work if Google *really* focuses. Time will tell.

12) And yes, I realize targeting is more akin to tactics than strategy but I wanted to be true to Omar Bradley’s original quote. And then I learned the quote may actually come from Robert Hilliard Barrow.

Learn something new every day.

You can follow @GavinSBaker.


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