I remember when the iPad came out and I sensed that the biggest fear Google had about the iPad was that it was Apple’s grand claim to the home. While I think Google was concerned about Apple locking up additional conduits for delivering media, the company seemed equally worried that Apple could further control the point of contact in the home for communicating with everything from your TV to how you discovered new content.
The Nest acquisition made a lot of sense in this regard. It gave the company direct access to a hardware input device—a thermostat—that most people use almost everyday. Add to that the reality that this device is collecting information in your home, from the temperature to whether you’re at home, and one can see how the connected thermostat could be very interesting to a company that had honed its business model optimizing the delivery of advertising to consumers. The more Google knows about you, the better its advertising becomes, particularly in a mobile, location based world.
And so what about the minor controversy, spawned by Google’s letter to the SEC that The Wall Street Journal’s Rolfe Winkler picked up on? From the letter:
We expect the definition of “mobile” to continue to evolve as more and more “smart” devices gain traction in the market. For example, a few years from now, we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities.Our expectation is that users will be using our services and viewing our ads on an increasingly wide diversity of devices in the future, and thus our advertising systems are becoming increasingly device-agnostic.
Wait, did Google just say we could be looking at ads on thermostats? Isn’t this precisely what loyal Nest supporters don’t want done to their sleek and refined thermostats? More importantly, would Google aggregate Nest user data to improve advertising?
Now to be fair to Nest, CEO and founder Tony Fadell has always said two things. First, that the data he collects is used for product improvement. Second that any changes would be transparent and perhaps most importantly, opt-in. Most of the biggest privacy flouters, like Facebook, rely on opt-out models where the onus is on the user to figure out how restrict data collection and opt out of data collection policies. Additionally, Nest’s business model isn’t an ad supported one, something Fadell reminded everyone when the WSJ article showed up. He went beyond that, actually, to say that he doesn’t think ads are right for the Nest experience. Which is fairly apparent in that Nest feels very much like a premium Apple hardware experience better left unsullied by low brow Google ads.
But, the question for me is not really will we ever see advertising on a thermostat. But rather, is the data that Nest has access to more important for Google than any device specific advertising? And for, Google, is it more important to begin building out a smart home ecosystem that one day becomes governed by a Google account so that Google has the richest data possible to optimize advertising across not a single thermostat but across tablet, phones, watches, glasses?
If it’s not apparent already, I’m not worried about seeing ads on a Nest thermostat. I do, however, have my eye on Nest’s privacy policies. I don’t think it’s imminent but I wonder if there will be an Instagram moment when it becomes apparent that the acquiring company wants the acquired company to fall in line with its overall business strategy.
No doubt Google and Nest have learned from the Instagram terms of service debacle. But I also wouldn’t be shocked if Google figures out a new way to to acces Nest’s data, like for example in future generations allowing users to easily control their Nest through a Google account, which further tie together the product offerings. But for now, one can rest assured that neither company is dumb enough to show you ads for ice cream on your thermostat.