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it cannot tell if a purchase has been made or interest has been lost
Once again - THAT'S NOT GOOGLE, THAT'S THE ADVERTISER. I don't mean to yell, but you gotta understand the system if you wanna understand the system, ya know?It is a fundamental flaw in Google's IBA. Shouting doesn't change the flaw. It is not a closed loop. Interest based advertising uses the browser's history (there is an option to allow or disallow third party advertisers to use such data) to target advertising. IBA, as a model, is broken unless that critical feedback loop exists. It doesn't.
How would Google know you bought the product? Do you WANT Google to know everything you're buying online, so they no longer show you ads for it? Really?