Google is using consumers’ smartphones to track their locations and physical world shopping activities so they can give that data to advertisers as evidence of conversions for online ads that led to in-store purchases.

John McDermott recently reported in a Digiday article:

Google is beta-testing a program that uses smartphone location data to determine when consumers visit stores, according to agency executives briefed on the program by Google employees. Google then connects these store visits to Google searches conducted on smartphones in an attempt to prove that its mobile ads do, in fact, work.

If someone conducts a Google mobile search for “screwdrivers,” for instance, a local hardware store could bid to have its store listing served to that user. By pairing that person’s location data with its database of store listings, Google can see if the person who saw that ad subsequently visited the store.

Google hinted at this in an announcement a little over a month ago for Estimated Total Conversions, but didn’t go into much detail about that aspect.

“As consumers are increasingly on the go and switching between devices, marketers are telling us they want to see a more complete and accurate picture of how their online advertising drives conversions,” said Sridhar Ramaswamy, Google’s SVP, Ads and Commerce, at the time. “Conversions can come in many forms: visits to stores, phone calls, app downloads, website sales or purchases made after consulting various devices. Getting better insight into these complex purchase paths can help you optimize your online advertising and allocate budget more effectively.”

Over time, he said, Google would be adding more conversion types to Estimated Total Conversions, such as store visits and phone calls.

“We are committed to helping you gain insight into the new conversion types that are part of a constantly connected, multi-screen world so that you can make the best advertising decisions possible,” he said. “In addition to cross-device conversions, both phone calls and store visits will be included as part of Estimated Total Conversions in the coming months. These are important conversions to consider — people make more than 40M calls to businesses each month directly from Google ads and are often looking for physical store locations when they search on Google, particularly on the go.”

The lines between online and off are obviously getting increasingly blurry. Facebook and Cisco recently partnered up for in-store customer check-ins, which lead to demographic data for ad targeting, for example.

Look at things like PayPal’s Payment Code and Beacon, which let users pay by checking into stores with their mobile apps or in some cases not even having to touch their phones. It’s not too hard to see Google Wallet making similar moves somewhere down the road.

It’s also not hard to imagine Google using data its using for Estimated Total Conversions to drive users to drive consumers toward advertisers via Google Now. You know, like reminding you that you need that screwdriver when you’re close to the hardware store that’s selling it.

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