The initials for British Telecom (“BT”) might now come to stand for “behavioral targeting” as the company prepares its opt-in trial with Phorm. Phorm is a UK-based firm that seeks to tap ISP behavioral data in an effort to serve more relevant ads to end users. The BT-Phorm “Webwise” test begins tomorrow and promises both “protection against online fraud and makes ads that appear on participating websites more relevant to your interests.”
BT allows Phorm to collect user data and serves behaviorally targeted advertising “anonymously” but based on individual behavior:
Webwise assigns a unique, randomly-generated number to a user’s browser to preserve anonymity and privacy, and then matches the categories of browsing activity with relevant advertising. When the user’s interests match an advertiser’s category, the user can see a relevant ad in place of a generic, untargeted ad. With Web wise, a user doesn’t see more advertising; just more relevant advertising media.
While most people prefer relevant ads there are a number of surveys that also reflect consumer discomfort with tracking. Phorm’s US counterpart, NebuAd faced a firestorm of bad press and political criticism and his shifted its model in response.
In addition, US ISPs AT&T and Verizon last week adopted a position that requires “affirmative consent” from users before they’ll enable any tracking and targeting.
The BT trial with Phorm also requires an opt-in. It’s not entirely clear, however, whether the explanation and disclosures on the Webwise site are going to be fully understood by users.
Separately a lawsuit was filed by Front Porch (a Phorm-like company) against a range of others, including NebuAd and Hitwise for patent infringement. The patent doesn’t directly address advertising but is very broad and would certainly appear to cover customized ads, based on user profiles and behavior:
To attract traffic flow from other web sites, such as Internet Service Providers (ISPs) and organizations that have direct access to the Internet, an Internet Content Provider (ICP) dynamically forms customized web pages for its participating web sites. Specifically, the ICP stores web page files designed for itself and its participating web sites. Upon receiving a service request from a participating web site, the ISP dynamically forms customized web pages for the participating web site by combining the page files designed for itself and the page files designed for the participating web site.
As targeting becomes more prevalent and sophisticated privacy becomes more of a battleground. Phorm argues that it protects privacy even as ISPs collect data on behavior and usage. The burden is on the Phorms of the world to prove to users and skeptical privacy advocates that they don’t create databases of personally identifiable information that can later be mined for improper purposes.