Mark Bergen, writing for Bloomberg:
Google is stopping one of the most controversial advertising formats: ads inside Gmail that scan users’ email contents. The decision didn’t come from Google’s ad team, but from its cloud unit, which is angling to sign up more corporate customers.
Alphabet Inc.’s Google Cloud sells a package of office software, called G Suite, that competes with market leader Microsoft Corp. Paying Gmail users never received the email-scanning ads like the free version of the program, but some business customers were confused by the distinction and its privacy implications, said Diane Greene, Google’s senior vice president of cloud. “What we’re going to do is make it unambiguous,” she said.
I have no doubt that this idea originated in the Google Cloud team’s discussions around selling G Suite to the enterprise. But it ultimately would not have been made if scanning Gmail still provided its ad business with worthwhile data. They likely get much more targetable data from other sources, such as search and browsing history. At this point, the potential revenue from selling more G Suite outweighs any loss on the ads side from not scanning Gmail.
It would be easy to write this off as Google once again trying to appear concerned about privacy when they really don’t. But even if they don’t, what matters is these enterprise customers do care enough to withhold their money (even through confusion). When the choice comes down to losing customers or meeting their demands, it’s not a hard decision.