Sep 02

Today’s News 2nd September 2018

  • US Strategy In Syria: "Create Quagmires Until We Get What We Want"

    Authored by Jason Ditz via AntiWar.com,

    In 2013, top Obama Administration officials described their policy in the Syrian War as one of keeping the war going. The administration wanted a big seat at the table for a political settlement, which officials clarified meant ensuring that the war kept going so that there was never a clear victor.

    The Trump Administration seems to be slipping into that same destructive set of priorities in Syria. The Washington Post this week quoted an unnamed Administration official as saying that “right now, our job is to help create quagmires [for Russia and the Syrian regime] until we get what we want.”

    As ever, what the US really wants is to have a dominant position in post-war negotiations, so they can dictate the form that post-war Syria takes. This means ensuring that the Syrian government doesn’t win the war outright.

    That’s not as realistic as it once was, with the Assad government, backed by Russia, having retaken virtually all of the rebel-held territory except for a far north bastion in Idlib, dominated by al-Qaeda. This means the US now has to save al-Qaeda to keep the war going, which if we’re being honest has been a recurring undercurrent in US policy in Syria for years.

    It is this desire that has the US repeatedly threatening Syria and warning them not to attack Idlib. It is this desire that is sparking almost daily US threats to intervene militarily if the Idlib offensive involves chemical weapons. Most importantly, it is this desire that has Russia very much believing media reports that the rebels could “stage” a fake chemical attack just to suck the US into the war, and be fairly confident it would work.

    The US is, after all, constantly talking about an imminent chemical attack despite there being no reason to think Syria is poised to launch one. At times, US officials have privately conceded that there is no sign Syria is making any moves to even ready such weapons for the offensive. Yet several times a week, the US issues statements with allegations of a chemical plot featuring prominently, setting the stage for a reaction.

    The Syrian War has been nearing its endgame for months now, with Israeli officials conceding it is all but over as far as they are concerned (while vowing not to honor any post-war deals). When a war is lost and a plan has failed, however, the US government is often the last to know, and that has them determined to drag the war on as long as possible.

  • Army Secretary Wants Hypersonic Weapons On Battlefield In Next 10 Years

    Hypersonic weapons, capable of striking Russia and China at Mach 5 or higher, could be the Pentagon’s answer in correcting American hegemony that is widely perceived to be in terminal decline.

    Army Secretary Mark Esper told reporters at a Defense Writers Group conference in Washington, D.C. Wednesday that hypersonic missiles and directed energy weapons are critical to the service’s top modernization plan, said the Military.com.

    “Long-range precision fires at the strategic level is the capability that we need to ensure we have overmatch in future conflicts, and I think that the way to get to it is through hypersonics,” said Esper.

    Esper said he has communicated with cross-functional organizations responsible for advancing new technologies to expedite the next generation of long-range precision-guided hypersonic missiles.

    “I am pushing them to go as fast as they can, move to the left,” he said, adding that the other services are also working on the technology.

    “The services have been working together. We signed a joint agreement, if you will, in terms on how to proceed. The secretary of the Navy and the secretary of the Air Force and I meet constantly on this and other issues where we can work together. We all recognize that that is a key capability for all of us,” he said.

    Esper then told journalist new information about the hypersonic rollout that even we have not heard before. He specifically mentioned that 2028 is the year when the missiles will be deployed on the modern battlefield.

    “This is one where, clearly, technology is an issue,” he said. “It’s not like there is one out there right now that I am aware of. … This is one that is going to take some technology development. We are pushing hard because we’ve got to get there first.”

    The U.S. Army Space and Missile Defense Command/Army Forces Strategic Command conducted the first flight of the Advanced Hypersonic Weapon (AHW) concept in November 2011 (Source/ Army/ Military.com)

    In the last several months, the US Air Force has awarded nearly $1.5 billion to Lockheed Martin Missiles & Fire Control to develop a hypersonic weapon prototype.

    The contract will cover the critical design review, test, and production readiness support for the Air-Launched Rapid Response Weapon (ARRW), according to a US Air Force statement.

    “We are going to go fast and leverage the best technology available to get hypersonic capability to the warfighter as soon as possible,” said Secretary of the Air Force Heather A. Wilson.

    Officials from the Defense Department, Missile Defense Agency, Air Force, Navy, and Army signed a memorandum June 28 to work jointly on the development of “hypersonic boost-glide” technology, the release said.

    “The Joint Team requires the right mix of agile capabilities to compete, deter and win across the spectrum of competition and conflict,” said Air Force Chief of Staff Gen. David L. Goldfein. “We must push the boundaries of technology and own the high ground in this era of great power competition and beyond.”

    Esper also said the Army is accelerating efforts to develop directed-energy weapons for use in air and missile defense.

    “I think what’s most exciting, and where the Army is making a good deal of progress, is on directed energy, and I think that is the future for the most part because of the volume and speed of shots that it gives you,” Esper said, we have “put a lot of our investments” toward powerful lasers guns designed to be mounted on tanks and fighter jets.

    In July, the Army awarded Raytheon a $10 million High Energy Laser Tactical Vehicle Demonstration (HEL TVD) contract for a mobile 100 kW laser weapon system. Raytheon said the 100 kW laser would be mounted on a Family of Medium Tactical Vehicles.

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    “We have some things now, and I want to get them out in testing as soon as possible. Within a few years, I want to get something out there,” Esper said. “Initial fielding is something else, but in terms of prototyping, seeing what it can do, I want to get it out sooner rather than later.”

    Directed energy weapons are a challenge because they can travel a great distance, depending on their Kilowatt, “so you have safety concerns you have to work through,” he said. “But like everything else, I am pushing folks to move left. Let’s get it out to the field. Let’s let soldiers experiment with it and see how they can best use it. … They will help shape how we think about the importance of lasers in terms of actually firing them, but also how do we integrate them as part of our formation against everything from small drones to cruise missiles to fast movers.”

    The importance of the year 2028 is symbolic for its peak in the 53.5-Year War Cycle. So, it now makes sense why the Army wants to have hypersonics and other advanced weapons fielded within the next decade. War looms and it is likely to be against Russia and China.

  • McCain's Death Changes Nothing, The "Deep State" Will Replace Him

    Authored by Andrew Korybko via Oriental Review,

    The entire world reacted to the Senator’s death last weekend, with most of the Alt-Media Community wildly celebrating it while the Mainstream Media mourned the loss of what they described as an “American hero”.

    Both sides shared a common ground in believing that his death represented something very significant, whether in a positive or negative way, but the reality is that it doesn’t change anything at all.

    McCain voluntarily became one of the public faces of the Liberal-Globalist faction of the American “deep state” and is therefore easily replaceable, even if his cartoonish war-mongering rhetoric isn’t.

    The world isn’t any more or less safe now that he died because the same network that he represented is still in place even if the messenger changes, which is exactly what will happen once Soros and other similar icons eventually pass away too.

    McCain’s pathological hatred of Russia made him stand apart from his “deep state” peers, though the zeal with which he sought to advance his country’s interests as he subjectively understood them interestingly earned him the professional respect of President Putin.

    Speaking to Oliver Stone last June, the Russian leader revealed that:

    “Well, honestly, I like Senator McCain to a certain extent. And I’m not joking. I like him because of his patriotism, and I can relate to his consistency in fighting for the interests of his own country.”

    However, he was quick to add that:

    “People with such convictions, like the Senator you mentioned, they still live in the Old World. And they’re reluctant to look into the future, they are unwilling to recognize how fast the world is changing”, which shows that President Putin thought that McCain’s specific views were outdated.

    Ultimately, McCain’s passing is symbolic because of just how gigantic of a figure he was in the American political and “deep state” scenes, though he was nevertheless just a representative of a particular ideological faction and no one too important in and of himself.

  • Interactive Map Of How Many Days Americans Waste Commuting Over A Lifetime

    If you’ve ever sat in traffic doing wondering how much of your life is wasted commuting, or you’ve just taken a job across the country and want to know what you’ll be facing on the freeways, look no further.

    Using Census Bureau data for average daily round-trip commute times for almost 1,000 cities, the good folks over at Educated Driver have created a highly depressing interactive map. 

    Highlights: 

    • The average American worker spends 52.2 minutes a day commuting to and from work, or 4.35 hours a week. 
    • This translates to an average of 408 days of one’s life commuting – and more in large cities

    While residents of Jersey City spend 580 days of their lives commuting, those working in North Platte, Nebraska spend just 236 days in traffic – or nearly a year more of their lives with a difference of 344 days. Then again, 

    vs.

    Of course, if you’re not really into Kansas, sunny San Diego’s average lifetime commute time is just 395 hours. 

    Methodology: 

    So, how did we calculate the number of days you can expect to spend commuting in your life in each city?

    For the purposes of this study, we assumed the average person starts full-time work at 18 (some people start earlier, others a bit later). We also know the average retirement age is 63 in the United States.

    That’s 45 years of working a full-time job.

    We then worked from the assumption that most people work about 250 days per year, which accounts for 2 weeks annual vacation and time off.

    That’s 11,250 days of working/commuting over a career.

    From here, we simply used data from the US Census Bureau on average daily roundtrip commute times for nearly 1,000 cities and towns across the country and then did the math. –EducatedDriver

  • Escobar: 'The Axis Of Gold' And A Persian Cryptocurrency?

    Authored by Pepe Escobar via The Asia Times,

    Cryptocurrencies show promise as economies stumble under sanctions and other pressures…

    The Iranian rial: crash. The Turkish lira: crash. The Argentine peso: crash. The Brazilian real: crash. There are multiple, complex, parallel vectors at play in this wilderness of crashing currencies.

    Turkey’s case is heavily influenced by the bubble of easy credit created by European banks.

    Argentina’s problem is mostly to do with the neoliberal austerity of President Mauricio Macri’s government admitting it won’t be able to fulfill payment targets agreed with the IMF less than three months ago.

    Iran’s has to do with harsh United States sanctions imposed after the Trump administration’s unilateral pullout from the Iran nuclear deal.

    Brazil’s has to do with what the Goddess of the Market considers anathema: a victory by the imprisoned Lula (former president Luiz Inácio Lula da Silva) or his appointed candidate in the presidential election next October.

    This is a serious currency crisis affecting key emerging markets. Three of these – Brazil, Argentina and Turkey – are G20 members, and Iran, absent external pressure, would have everything to qualify as a member. Two – Iran and Turkey – are under US sanctions while the other two, at least for the moment, are firmly within Washington’s orbit.

    Now, compare it with currencies that are gaining against the US dollar: the Ukrainian hryvnia, the Georgian lari and the Colombian peso. Not exactly G20 heavyweights – and all of them also inside Washington’s influence.

    Behold the axis of gold

    Independent analysts from Russia and Turkey to Brazil and Iran largely agree that the overwhelming factor in the current currency crisis is a reversing of the US Federal Reserve quantitative easing (QE) policy.

    As investment banker and risk manager Jim Rickards noted, QE for all practical purposes represented the Fed declaring a currency war against the whole planet – printing US dollars at will on a trillion-dollar scale. That meant mounting US debt was devalued so foreign creditors were paid back with cheaper US dollars.

    Now, the Fed has dramatically reversed course and is all-out invested in quantitative tightening (QT).

    No more liquid dollars flooding emerging markets such as Turkey, Brazil, Argentina, Indonesia or India. US interest rates are up. The Fed stopped buying new bonds. The US Treasury is issuing new bond debt. Thus QT, combined with a global, targeted trade war against major emerging markets, spells out the new normal: the weaponization of the US dollar.

    It’s no wonder that Russia, China, Turkey, Iran – nearly every major regional player invested in Eurasia integration – is buying gold with the aim of progressively getting out of US dollar hegemony. As JP Morgan himself coined it over a century ago, “Gold is money. All else is credit.”

    Every currency war though is not about gold; it’s about the US dollar. Yet the US dollar now is like an inscrutable visitor from outer space, dependent on massive leverage; a galaxy of dodgy derivatives; the QE printing scheme; and gold not being awarded its true importance.

    That is about to change. Russia and China are heavily invested in buying gold. Russia has dumped US Treasuries en masse. And what the BRICS had been discussing since the mid-2000s is now in motion; the drive to build alternative payment systems to the US dollar-subordinated SWIFT.

    Germany appears to be coming around to the idea. If that does happen, it could possibly lead the way towards Europe redefining itself geopolitically in terms of its military and strategic independence.

    When and if that happens, arguably at some point in the next decade, US foreign policy configured as an avalanche of sanctions may be effectively neutralized.

    It will be a long, protracted affair – but some elements are already visible, as in China using US trading markets to help the emergence of a wider platform transference. After all key emerging markets cannot wiggle out of the US dollar system without full yuan convertibility.

    And then there are nations contemplating the creation of their own cryptocurrencies. Digital finance is the way to go.

    Some nations, for instance, could use a cryptocurrency denominated in SDRs (special drawing rights) – which is, in practice, the world money as designated by the IMF. They could back their new digital coins with gold.

    Mired-in-crisis Venezuela is at least showing the way. The “sovereign bolivar” started circulating last week – pegged to a new cryptocurrency, the petro, which is worth 3,600 sovereign bolivars.

    The new cryptocurrency is already posing a fascinating question: “Is the petro a forward sale of oil or an external debt backed by oil?” After all, BRICS members are buying a large chunk of the 100 million petros – confident that they are backed by a surefire reserve, the Ayacucho block of the Orinoco Oil Belt.

    Venezuelan economist Tony Boza nailed it when he stressed the peg between the petro and international oil prices: “We are not going to be subject to the value of our currency being determined by a website, the oil market will determine it.”

    A Persian cryptocurrency?

    And that brings us to the key question of the US economic war on Iran. Persian Gulf traders are virtually unanimous: the global oil market is tightening, fast, and it will run short in the next two months.

    Iran oil exports will likely drop to just over 2 million barrels a day in August. Compare it to a peak of 3.1 million barrels a day in April.

    It looks like a lot of players are folding even before Trump’s oil sanctions kick in.

    It also looks like the mood in Tehran is “we will survive,” but it’s not exactly clear the Iranian leadership is really aware of the nature of the incoming tempest.

    The latest Oxford Economics report seems pretty realistic: “We expect the sanctions to tip the economy back into recession, with GDP now seen contracting by 3.7% in 2019, the worst economic performance in six years. For 2020, we see growth of 0.5%, driven by a modest recovery in private consumption and net exports.”

     The authors of the report, Mohamed Bardastani and Maya Senussi, say “the other signatories to the original deal [the JCPOA, especially the EU-3] have yet to spell out a clear strategy that would allow them to circumvent US sanctions and continue importing Iranian oil.”

    The report also admits the obvious: there will be no internal push in Iran for regime change (that’s a thing only happening in warped US neocon minds) while “both reformers and conservatives are united in defying the sanctions.”

    But defying how? Tehran has not come up with a win-win roadmap capable of being sold to anyone – from JCPOA members to energy importers such as Japan, South Korea and Turkey. That would represent true Eurasia integration. Just having Ayatollah Khamenei saying Iran is ready to pull out of the JCPOA is not good enough.

    What about a Persian cryptocurrency?

  • Crunching The Numbers On Mortality

    One of the key traits that make human beings unique on planet Earth is that we’re aware of our own mortality.

    But, as Visual Capitalist’s Nick Routley notes, scientific advances have given us insight into which behaviors may prolong life, and which activities carry the greatest risk of death. Naturally, there have been some unique attempts to create a unified structure around risk and benefit, and to quantify every aspect of the human lifespan.

    As today’s graphic from TitleMax demonstrates, even when we’re thinking about death, the human desire to codify the world around us is alive and well.

    Courtesy of: Visual Captitalist

    MORTALITY UNITS

    Certain events – such as a parachute failing to open or being hit by a meteor – have an easily quantifiable effect on life, but how do we measure the riskiness of day-to-day habits and situations? This is where a unique unit of measurement, micromorts, comes into play.

    This concept, invented by renowned decision analyst Ronald A. Howard, helps compare any number of potentially lethal risks. One micromort equals a one in a million chance of sudden death. Here’s the riskiness of various activities measured in micromorts:

    LIFE UNITS

    The average person, by the time they reach adulthood, will live approximately one million half-hours. Those 30 minute units are known as microlives.

    The microlife concept was invented by professor David Spiegelhalter as a way to measure the consequences of various behaviors. For example, 20 minutes of physical activity earns us two microlives, while watching TV for two hours subtracts one microlife.

    This measurement extends beyond nutrition and eating habits. Simply living in a modern era earns us an additional 15 microlives per day compared to those who lived a century earlier.

    CASTING THE DIE ON HOW WE’LL DIE

    How will the estimated 353,000 humans that will be born today eventually meet their end? This was the thought experiment conducted by Reddit user, Presneeze.

    While our focus is often drawn to people who meet their end in spectacular and tragic ways, the vast majority of humanity will succumb to conditions such as heart disease and cancer.

    Geography can play a big role in shifting these odds:

    • In the United States, which is grappling with an opioid addiction crisis, there is a 1-in-96 chance of dying from a drug overdose.

    • Diarrheal diseases may not be on the radar of most people living in first world countries, but in developing regions, they remain a leading cause of preventable death – particularly for children.

    • In Russia, the odds are 1-in-4 that a man will not live beyond 55 years. The main culprit? Vodka.

    “On a long enough time line, the survival rate for everyone drops to zero.”

    –’Tyler Durden’ via Chuck Palahniuk

  • Which Companies Have The Highest Gross Profit Per Employee?

    Submitted by Priceonomics

    The Standard & Poor’s 500 Index, “S&P 500” includes the 500 largest American companies by market value listed on the NYSE or NASDAQ stock exchanges. In 2017, the S&P 500 index number increased by 22% from 2016-2017. S&P 500 companies generated $11 trillion in combined revenue and employed more than 25 million people worldwide.

    As a follow up to the report we published previously (What Industry Has The Highest Revenue Per Employee?), we ranked the companies by Gross Profit Per Employee (GPPE), exploring how efficiently they leverage human capital after direct product costs (Cost of Goods Sold) have been deducted. We also look at the Gross Profit per employee for tech companies like Facebook, Google, and Apple.

    Note: Real estate investment trusts (REITs) were excluded from the rankings, resulting in 439 companies in total remaining.

    Energy is the sector with the highest GPPE (it was also the sector with the highest Revenue Per Employee). Financial and Healthcare companies remained high on the list, while Industrials, Materials, and Consumer Discretionary continue to perform the worst.

    The table below shows the top 50 companies in the S&P 500 ranked by GPPE in 2017: 

    The Top 50 includes ten Energy and eleven Healthcare companies. Insurance provider Brighthouse Financial topped the GPPE ranking. Pharmaceuticals, Gilead Sciences and Celgene, and Altria Group, a Tobacco company, were the runner-ups.

    In Revenue Per Employee, pharmaceutical supplier AmerisourceBergen was ranked second, but for GPPE, the company drops into 192nd place, having a gross margin of only 3%, and GPPE of $227,300.

    Compared to Revenue Per Employee, GPPE brings Technology companies, including Facebook and Apple, significantly higher the rankings. Due to their low cost of revenue, Verisign, Alphabet, Mastercard, Broadcom, and Intuit all appear in the Top 50.

    By grouping the companies into different sectors, we computed the average GPPE for each sector.

    Energy remains the sector with the highest Gross Profit Per Employee, as well as Revenue Per Employee. Financials moved higher in the ranking due to a high average sector Gross Margin of 67%.

    We also looked at the ten lowest performing companies in the S&P 500, based on Gross Profit Per Employee:

    Looking at the bottom of the GPPE rankings: Consumer Discretionary companies Chipotle, Ross, and Darden Restaurants all generated less than $25K gross profit per employee. Consulting firms, Accenture and Cognizant, remained on the list due to large employee growth for the past few years and low gross margin.

    Now we focus solely on the TMT sector, looking at the top 20 tech companies by Gross Profit Per Employee:

    Facebook tops the list with a high gross margin of 87%. Payment network companies, Visa and Mastercard, also appear in the Top 5. Interestingly, all companies on this ranking have a Gross Margin of 50% or more.

    Key takeaways:

    • The Energy sector has the highest Gross Profit Per Employee, as well as Revenue Per Employee.
    • More Tech companies appeared in the Top 50 on GPPE vs. Revenue Per Employee due to high gross margins in the tech sector.

  • California Democrats Boycott Of In-N-Out Backfires Spectacularly

    A call from the head of the California Democratic Party to boycott In-N-Out Burger over its $25,000 donation to the GOP, appears to have backfired rather spectacularly according to the Los Angeles Times. Take Anthony Grigore, a true-blue Democrat. But as he waited Thursday at an In-N-Out Burger in El Segundo for his meal, Grigore made it clear party loyalty would only go so far.

    Just hours earlier, the head of the California Democratic Party called for a boycott of the famed burger chain after a public filing revealed that the company had recently donated $25,000 to the state’s Republican Party.

    “Eating at In-N-Out is such a standard thing to do across California,” Grigore told the LA Times dismissing the boycott idea as a bit silly.

    On Wednesday, Journalist Gabe Schneider tweeted a filing from the burger joint showing the $25,000 donation (while failing to note the $80,000 In-N-Out has donated to a liberal PAC over two years). 

    Hours after Schneider’s tweet, California Democratic Party chairman Eric Bauman kneejerked into action and called for a boycott, tweeting; “Et tu In-N-Out? Tens of thousands of dollars donated to the California Republican Party… it’s time to #BoycottInNOut – let Trump and his cronies support these creeps…  perhaps animal style!” along with a link to a local paper. 

    At this point, Bauman went too far for some California Democrats who distanced themselves from the political dust-up between their social justice warrior leadership and the California eatery owned by an evangelical Christian family with a history of support for GOP candidates. 

    By the end of the day, Democrats were distancing themselves from the idea and Republicans were enjoying a political feast, with many making big lunch orders to show their support for the chain and posting photos on social media. Some were even feeding their dogs:

    “We have all of our children eating In-N-Out burgers. Even my son’s German shepherd eats In-N-Out,” said state Sen. Jim Nielsen, R-Gerber, whose staff ordered 25 burgers and 50 bags of fries for lunch.

    Political experts said they aren’t surprised that In-N-Out has proved hard to demonize, especially if the company’s sin was simply donating to the Republican Party.

    “The stomach overrules the mind,” Jaime Regalado, emeritus professor of political science at California State University, Los Angeles. “A cheap, good-tasting burger is hard to dismiss politically.” –LA Times

    Shortly after the story went viral, In-N-Out issued a statement from Executive Vice President Arnie Wensinger noting that the company had “made equal contributions to both Democratic and Republican” PAC’s in 2018.

    “For years, In-N-Out Burger has supported lawmakers who, regardless of political affiliation, promote policies that strengthen California and allow us to continue operating with the values of providing strong pay and great benefits for our associates,” Wensinger said.

    The boycott quickly turned into a free publicity stunt for republicans: GOP gubernatorial candidate John Cox posted a photo of himself in front an In-N-Out on Thursday on Twitter and declared, “There’s nothing more Californian than In-N-Out Burger.”

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    After Bauman’s tweet went viral and made national news, Bauman referred questions to the party’s communications director, John Vigna, who responded that the Bauman’s tweet was “just his personal view,” and that the official California Democratic Party was not involved. 

    “We’re not happy that In-N-Out gave the money, but we’re not calling for an official boycott,” Vigna said. “Democrats are very fired up. Chair (Bauman) is definitely giving voice to a feeling a lot of people have right now.”

    Amusingly, boycotts of companies that give money to the opposition would take political partisanship to a whole new level. The SF Chronicle looked at 2018 donations to the two main California parties, to  shows just what dueling, tit-for-tat boycotts could mean for businesses.

    Democrats, for example, would have to avoid not only In-N-Out, but also Facebook, Target, Microsoft, Anheuser-Busch, McDonald’s and virtually every oil company. They’re just some of the many groups that have given money to the state Republican Party this year.

    For Republicans, boycotting Democratic supporters would mean never using Uber, not drinking Gallo wine or Pepsi, dropping T-Mobile cellular service, refusing to have garbage hauled by Recology or to go to a Paramount Pictures movie.

    Ultra-partisan fighting over who gives what to whom is something neither party wants to contemplate. If companies are forced to choose between a boycott by their customers or making political contributions, it would suddenly become much tougher for Democrats and Republicans to raise money to run their campaigns.

    For Democratic Party officials, the answer was to laugh off Bauman’s hasty tweet and hope the kerfuffle goes away.

    “Chair Bauman’s personal tweet reflects his belief that he shouldn’t support companies that support the Trump agenda, and that Jeff’s Gourmet Kosher Sausage Factory on West Pico Boulevard is the best All-American treat in California,” the party said.

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  • Google Tracking 70% Of Retail Purchases Thanks To Secret Deal With Mastercard

    Over the past year, certain Google advertisers have been able to use a “potent new tool” which allows them to track whether ads they run online translated to sales at physical stores throughout the United States, thanks to a secret deal between the Silicon Valley tech giant and Mastercard, reports Bloomberg. 

    Illustration: Tam Nguyen, AdAge

    Most of Mastercard’s two billion customers weren’t aware of this arrangement, since neither Google parent Alphabet Inc. nor the credit card company told the public about the deal which was brokered after four years of negotiations. The alliance, says Bloomberg, “gave Google an unprecedented asset for measuring retail spending,” as part of the search giant’s “strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.” 

    Through this test program, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.

    …

    It works like this: a person searches for “red lipstick” on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard. The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads “Offline Revenue” — only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase. –Bloomberg

    Last year Google boasted that that the service, called “Store Sales Management,” had access to “approximately 70 percent” of US credit and debit cards. 

    Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70 percent” of U.S. credit and debit cards through partners, without naming them. –Bloomberg

    Since Google doesn’t define what this means, Bloomberg speculates that it could mean “70 percent of the people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70 percent of those are logged into Google accounts like Gmail when they click on a Google search ad.” 

    The deal is likely to raise broader privacy concerns about the volume of consumer data is in the hands of data technology companies such as Google. Of note, “Since 2014, Google has flagged for advertisers when someone who clicked an ad visits a physical store, using the Location History feature in Google Maps.”

    “People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Electronic Privacy Information Center (EPIC) counsel Christine Bannan. “There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”

    Google reportedly paid Mastercard millions of dollars for the data, according to two people who worked on the deal. The companies also discussed sharing a portion of Google’s ad revenue, according to one source. A Google spokeswoman denied any revenue sharing agreement with its partners – while addressing privacy concerns: 

    “Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement. “We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.”

    The company says that google users can opt out of ad tracking using their “Web and App Activity” online console (though no word if the service will continue to secretly track your purchases like Google’s location history, which tracks users regardless of whether they’ve turned the feature off.) 

    Mastercard spokesman Seth Eisen said that the company shares transaction trends with merchants and service providers to assist them in measuring “the effectiveness of their advertising campaigns.” 

    The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. “No individual transaction or personal data is provided,” he said in a statement. “We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”  –Bloomberg

    According to people familiar with the program, Google has approached other payment companies fopr similar deals – however it is unknown whether they actually signed any. Google, meanwhile, confirmed that the service only applies to people who are logged in to one of its accounts and haven’t opted out of ad tracking. 

    Google is testing the data service with a “small group” of advertisers in the U.S., according to a spokeswoman. With it, marketers see aggregate sales figures and estimates of how many they can attribute to Google ads — but they don’t see a shoppers’ personal information, how much they spend or what exactly they buy. The tests are only available for retailers, not the companies that make the items sold inside stores, the spokeswoman said. The service only applies to its search and shopping ads, she said. –Bloomberg

    According to Bloomberg, Google’s first attempt to link consumer browsing habits with spending came in the form of it’s mobile payment service; Google Wallet – however adoption never took off.

    As we mentioned earlier, Google has been pinging advertisers through their Location Services feature when a user visited a store, however the advertiser wasn’t able to know whether the shopper made a purchase. 

    So Google added more. A tool, introduced the following year, let advertisers upload email addresses of customers they’ve collected into Google’s ad-buying system, which then encrypted them. Additionally, Google layered on inputs from third-party data brokers, such as Experian Plc and Acxiom Corp., which draw in demographic and financial information for marketers. –Bloomberg

    In May, 2017, Google introduced “Store Sales Management” which let companies with personal info on consumers such as encrypted email address, upload information into Google’s system and synchronize advertising expenditures with offline sales. The second component injects card data. 

    Early indications suggest the Mastercard deal has been a boon for Google. “Malcolm said her agency has tested the card measurement tool with a major advertiser, which she declined to name. Beforehand, the company received $5.70 in revenue for every dollar spent on marketing in the ad campaign with Google, according to an iProspect analysis. With the new transaction feature, the return nearly doubled to $10.60,” according to Bloomberg. 

    “That’s really powerful,” Malcolm said. “And it was a really good way to invest more in Google, frankly.“

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