In 2021, the World Bank estimated internet penetration in India stood at 41 percent. With low data charges, this number is set to grow further and that’s good news for advertising platforms like Google and Facebook, which have emerged as major players in the digital advertising space. For the internet user, this means more ads that target people on the basis of their browsing history.

While Google dominates the search engine space – in India, it commands 95.45 percent of the market share – this is not its source of revenue. However, the data gleaned from users of the search engine forms the basis of its revenue stream from advertising.

According to a report by the Indian Express, Facebook and Google have together cornered 80 percent of the domestic digital advertising market in India. An Economic Times report noted that Google India’s profits rose by 38 percent to Rs 808 crore in the financial year of 2021. Its revenue from advertisements stood at Rs 13, 887 crore, as reported by the Indian Express.

How Google works for advertisers

Google makes advertising revenue from advertisements carried on its search engine and partner properties like the video platform, YouTube.

In order to advertise to users and make it easier for advertisers to reach prospective clients, Google uses AdSense, a program that lets advertisers and publishers on the Google network serve images, texts, videos and interactive advertisements to users who make up the target audience.

Central to Google’s advertising model are keywords or words and phrases used on the search engine.

Keywords can be anything from a generic word for a product, a specific company or brand that sells a product, the geographical area in which the company operates, or a combination of these variables. For example, if a user searched for “computer” on Google, the search engine would list organically-sourced websites that explain what the device is, its history and functions, along with websites that sell computers.

These search results form the basis by which individuals can be targeted by advertisers. Once you’ve searched for a specific brand that manufactures computers and advertises with Google, you’re likely to see its advertisements on websites that allow Google to place advertisements on their web space.

Targeting of advertisements is also achieved through cookies, which are codes delivered to a visitor’s browser. These codes track users’ movements across other websites to ensure better targeting. However, in January, Google’s parent company Alphabet Inc announced it would phase out support for third party cookies and its ad tools would not support individual tracking across the internet.

The phasing out of cookies doesn’t mean users will no longer be tracked. While Google has announced that it will not allow third party cookie tracking on Chrome, there are walkarounds with new methods being used to track user data for advertising purposes. Some of the technologies that continue to store user data and can be used to track movements in the digital space include Indexed DB and Web SQL.

From a user’s perspective, even if Google does stop the usage of third party cookies on Chrome, data collected by first-party cookies can still be used. Users may be able to opt out of tracking on some browsers – like Safari – but to ensure certain features work on their chosen browser, the user will have to grant access to browsers and search engines to track and store data.

From an advertiser’s point of view, cookies ensure their advertisements are delivered to the intended audience. Users’ past search history and propensity to engage with and visit different websites based on their location, interests and other markers may be used to figure out target audiences.

Clicks vs impressions

While advertising on Google, advertisers can choose between two models: pay per click or pay per impression.

In the pay-per-click model, the advertiser pays only when a user actually clicks on an advertisement. This model is generally adopted by newer businesses as it ensures greater return on investment. However, the pay-per-click model limits the scope of an advertisement as it goes out specifically to users most likely to click on the advertisement.

If advertisers want to reach a wider audience and increase their visibility rather than get actual clicks, they can opt for the pay-per-impressions model. This allows the advertiser to set a price for the number of impressions an advertisement gets, or the number of people who see the advertisement.

Political advertisements on Google

Google’s ad library report for India “includes information about ads that feature or are run by a political party, a political candidate, or a current member of the Lok Sabha or Vidhan Sabha” between February 2019 and January 2022. According to the report, verified political advertisers have cumulatively spent Rs 73,78,06,250 on 22,369 advertisements since 2019. The list of top advertisers includes a number of digital media agencies, which were hired to run advertisements on Google.

The top spenders on political advertisements were the Dravida Munnetra Kazhagam, which occupies both the first and fourth spots on the list (there is no explanation from Google as to why DMK has been ranked twice). As the political party with maximum spending on Google ads, DMK spent Rs 22,25,79,000 on 2,638 advertisements between February 2019 and January 2022 and the majority of this amount – Rs 8,34,09,750 – was spent around March 2021. As the fourth-highest spender, DMK also spent Rs 4,16,97,750 on 161 ads.

DMK is followed by the Bharatiya Janata Party, which spent Rs 19,22,97,500 on 12,416 ads; followed by the All India Anna Dravida Munnetra Kazhagam, which spent Rs 7,31,37,500 on 320 ads. The Indian National Congress is fifth on the list, with an expenditure of Rs 3,00,13,000 on 424 advertisements.

Google’s ad library report also reveals that the maximum amount – around Rs 34,13,99,500 – was spent in Tamil Nadu; followed by Rs 3,88,28,250 in Uttar Pradesh; and Rs 3,43,39,750 in Maharashtra.

These numbers include amounts spent on both static and video advertisements.

From browsing data to target audience

Spendings by major political parties on the platform have gone down since 2019. For instance, Google’s data shows BJP spent Rs 2,50,00,000 on an average as ad spend between April 15, 2019 to April 30, 2019 daily. On the other hand, when we compare the party’s ad spend in 2021, it’s just Rs 70,00,000 daily between March 15, 2021 and March 30, 2021.

Similarly, the data shows Congress’ ad spend peaked in April 2019, when it spent Rs 1,49,60,250 on April 21, 2019.

The drop in the amount spent on online ads may be because since 2019, Google has stopped microtargeting of ads in the political advertisements space. Also, the last general elections in India were held in 2019.

Microtargeting allows advertisers to identify target audiences based on finer details and has been a topic of debate in the United States of America, where political parties and candidates identify and create sub-groups of their voter base and reach out to them using tailored, structured messaging. Sub-groups may be created based on voting habits, income groups, ethnicity as well as identifiers like age, sex and sexual orientation. Once a subgroup has been defined, they would be targeted using group-specific messaging on a mix of digital and traditional media platforms.

While efficacy of microtargeting as an advertising strategy has frequently been questioned, India has seen parties with a strong regional presence spending more on digital advertising than national parties, as may be seen in the high spends by the DMK.

In 2019, Google also announced it would no longer allow advertisements based on political leaning, but it retained the options of advertisers being able to target their audiences based on age, gender, location and other groupings (like those interested in a specific topic). This also applies to video advertisements placed on YouTube and other Google properties.

An individual’s browsing history may easily allow an advertiser to deduce their political preference, social bias and religious leanings.

Courtesy the wealth of data that Google has on users through its search engine and browser, the advertisements appearing on one user's search page and their frequently-visited websites may not be the same as that of another, even if the two users share a few variables (like location). As these advertisements are based on the user's past browsing habits, the advertisements shown are likely to differ from person to person.

In the Indian political space, where a range of social and political issues are debated along religious, linguistic and regional lines, it is not difficult to target voters based on their assumed political leanings despite the checks and balances placed by Google’s political advertising policy.

All figures as of January 31, 2022.