Google’s announced today that the have a new feature for its adsense advertising Network, "Bringing the science of search to the art of display".

Google is using the knowledge it has gathered in search, where relevance plays a big part, to take a shot at the display ads market. Google believes there is a lot to be gained in that area.

Google Content Network

Google will be using placement targeting and contextual targeting to help advertisers reach their targeted audience. They will be doing that in the Google Content Network. Everybody (yes everybody!) visiting a site in the Google Content Network will be getting targeted ads based on a cookie Google is placing in your browser.

Not only will Google now target ads at you based on your interest, but it will also let you target yourself. Anyone can go to Google’s Ad Preferences Manager and see exactly how Google is categorizing their interests. (Most people will probably see nothing right now, since this program is only being rolled out on a test basis and will gradually expand). Now, here’s the really smart part: Google lets you add or remove any interest. In effect, it is inviting you to declare what kind of ads you want to see. You can also opt out of the program completely

Google's Response to Privacy Concerns

This kind of tailored advertising does raise questions about user choice and privacy — questions the whole online ad industry has a responsibility to answer. Many companies already provide interest-based advertising and they address these issues in different ways. For our part, we’re launching interest-based advertising with three important features that demonstrate our commitment to transparency and user choice.

• Transparency - We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. You can click on the labels to get more information about how we serve ads, and the information we use to show you ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google’s ad serving.

• Choice - We have built a tool called Ads Preferences Manager, which lets you view, delete, or add interest categories associated with your browser so that you can receive ads that are more interesting to you.

• Control - You can always opt out of the advertising cookie for the AdSense partner network here. To make sure that your opt-out decision is respected (and isn’t deleted if you clear the cookies from your browser), we have designed a plug-in for your browser that maintains your opt-out choice.

I seem to remember Facebook trying this with beacon and it having a bad backlash. Of course Beacon took this a step deeper telling your friends your search/buying habits but isn’t that the logical next step for this?