1. Test accounts that visited substance abuse websites were much more likely to be shown ads for Watershed Rehab but nothing shows up on the ad settings page indicating the change.
2. Test accounts where the ad settings page has gender=male were much more likely to be shown ads for the recruiter careerchange.com, which offered "$200k+ Jobs - Execs Only".
The first case sounds very much like retargeting. The substance abuse website would drop a cookie and get a small payment from a central db for telling them that this cookie is associated with viewing substance abuse websites. Then Watershed Rehab wants to advertise to substance abuse website visitors, so they pay the central db for a list of cookies, which includes this one. Then Watershed sets up an ad campaign with Google and asks to target visitors with cookies on this list. This can't show up as an "interest" on the ads settings page as "substance abuse" because the association was made by third parties; Google doesn't have enough of the picture to see what happened. You can opt out of retargeting by turning off "interest based ads" at https://www.google.com/settings/ads
The second case sounds like careerchange.com submitted an ad campaign that looked at the gender field. Advertisers have tried to target specific genders for a long time through color and where they advertise, but the internet does make it much more explicit. Still, this is a very small sample to be drawing large conclusions about, especially as careerchange.com stopped doing it (observed in their May run but not the June one).
Disclaimer: I work at Google, on open source software, and I don't know anything about these specific cases.
"The substance abuse website would drop a cookie and get a small payment from a central db for telling them that this cookie is associated with viewing substance abuse websites."
Any substance abuse website that does this is run by charlatans and has all the morality of a hyena. This is such a violation of trust that I cannot imagine any healing coming from it.
The effect of this is that people who visit substance abuse websites see ads for rehab centers. This seems generally positive, though there's a risk of other people seeing the computer and asking "why are you getting ads for rehab centers?"
Or is there something else that makes this bad that I'm missing?
Yes. It is also a huge violation of privacy and will encourage people not to get help. The "Target flyer - My Daughter is Pregnant" scenario could happen to a person looking for help and make their situation worse or untenable.
The main thing is the level of plausible deniability. There are lots and lots of reasons why someone might see an ad for a rehab center on your screen. Perhaps a friend or relative has a drug problem and you're reading about it. Or the rehab center is advertising widely.
Your profile says you work for Google. Maybe Google has an "enlightened" policy towards substance abuse, but I wonder what your manager would do if s/he thought you were in need of rehab? In a lot of companies, getting rid of you would be the manager's reaction. Starting the death spiral for someone who is looking for help is horrible and to treat it like any other targeted advertising is insensitive at best.
Given the down votes, I would guess people agree with you, but I really wish our profession would think about these things and the affects on normal people.
1. Test accounts that visited substance abuse websites were much more likely to be shown ads for Watershed Rehab but nothing shows up on the ad settings page indicating the change.
2. Test accounts where the ad settings page has gender=male were much more likely to be shown ads for the recruiter careerchange.com, which offered "$200k+ Jobs - Execs Only".
The first case sounds very much like retargeting. The substance abuse website would drop a cookie and get a small payment from a central db for telling them that this cookie is associated with viewing substance abuse websites. Then Watershed Rehab wants to advertise to substance abuse website visitors, so they pay the central db for a list of cookies, which includes this one. Then Watershed sets up an ad campaign with Google and asks to target visitors with cookies on this list. This can't show up as an "interest" on the ads settings page as "substance abuse" because the association was made by third parties; Google doesn't have enough of the picture to see what happened. You can opt out of retargeting by turning off "interest based ads" at https://www.google.com/settings/ads
The second case sounds like careerchange.com submitted an ad campaign that looked at the gender field. Advertisers have tried to target specific genders for a long time through color and where they advertise, but the internet does make it much more explicit. Still, this is a very small sample to be drawing large conclusions about, especially as careerchange.com stopped doing it (observed in their May run but not the June one).
Disclaimer: I work at Google, on open source software, and I don't know anything about these specific cases.