When you think of Google, the first thing that should come to mind is...Advertising, because that is what they make their billions from doing. They take information from their users (and yes, that means you and me) and they sell it to the many hungry companies out there that live to find out where we go, what we buy, our demographics, and more. What is the ultimate goal for these companies is the ability to identify YOU, and what ads would interest YOU the most...after all, advertising dollars are precious and expense, so if they can target your specific interests, they will not waste advertisements for female products to burly old men (most burly old men).
Like it or not, gender plays an important part in advertising - during a football game, for instance, the ads are generally geared more towards men; new cars, beer, hunting, fishing, those rugged truck ads, etc. But during a soap opera, the advertisers will target more feminine products, such as hygiene, make-up, perfumes, family meals, etc. - you get the picture.
The area of the world you live in, the country, the state, region, or even down to the city or town - all of these factor in to an advertisers target area. They wouldn't try to sell a Russian shapka-ushanka hat to someone in Miami, Florida, it would be a waste of advertising dollars.
For years there was no way to identify a specific individual, only a group that we may or maynot be a part of. But then this most wonderful device came a long - the smartphone - we take it everywhere with us, and for the most part, "they" know exactly where we go. Each device has a couple unique identifiers - The International Mobile Equipment Identifier, known to you as the IMEI, that identifies your device to your carrier. The second piece of unique information is all about you, the International Mobile Subscriber Identity, or IMSI number, which is normally stored on your SIM card. Between those two numbers, the advertisers can pretty much know all they need too about you.
This is rather a scary scenario when you think about, and thankfully the newest release of Google Play Services 4.0 gives us some protection via Advertising ID. They have found a way to provide the advertisers information about you, but not about you specifically. For one thing it is no longer permissible to use the IMEI, or its equivalent.
The new Android Advertising ID can only be used for advertising and user analytics, and features an Opt-Out option. Each time an app attempts to check your personal Advertising ID, it must first check to see if you are Opted-Out of interest based advertising, and if you are, then too bad. This ID cannot be linked to any other personally identifiable information. You can also generate a new random ID any time you desire, and your old number and new number cannot be linked backwards.
It is very easy to Opt-Out - Press your App Drawer button-->Press on Google Settings-->Select Ads-->Place a checkmark at the end of "Opt out of interest based ads." That's all there is to it and you will not be "watched" as much. Let us know in the comments or on Google+ if you chose to Opt-Out.