Sunday, December 09, 2007

ISP based Behavioral Targeting

In an articles titled Watching What You See on the Web Wall Street Journal talks about ISP (Internet Service Provider) based behavioral targeting.

ISP based behavioral targeting idea has been kicked around for some time and NebuAd is one of the first company that made a product know as “deep-packet inspection boxes” for ISP to track user behavior online and then serve ads based on these behaviors.
This kind of targeting enables ISP’s to be a player in growing behavioral targeting market and generate a new stream of revenue.

This kind of technology is beyond simply using anonymous tracking. ISP do have a lot more information than just the browsing behavior. They have name, location, age, social security number (SSN). They know what time users login to their machine, when is the internet being used, what kind of sites are visited at what times, which sites provided information before a user made a purchase etc etc. This is far more information than companies like Revenue Science or Tacoda has and obviously can provide better targeting than Revenue Science or Tacoda can do.
However this also raises far more privacy concerns than companies like Revenue Science and Tacoda raise.

According to the article
The technology does raise privacy issues. The Internet-service providers often know other information about consumers, such as their names, locations and age and income ranges, which can be very valuable to potential advertisers, especially when combined with Web browsing habits. "Some of these [Internet equipment] guys are traveling in dangerous territory," says Emily Riley, an advertising analyst with Jupiter Research. "Should one company have all of that data in one place? It's a little troubling."

Other than user privacy there is another huge issue that this article did not talk about. In a network like Revenue Science or Tacoda publishers and advertisers (data providers) have to opt-in to participate. If a publisher/advertiser does not want to enable advertisers to use their data then they simply do not participate in the network. Advertisers can also choose to just use their site’s data to be used to only power their own advertisements. E.g Delta airlines can choose to participate in a retargeting campaign on a network like Revenue Science. They can retarget all the users who viewed fares to a particular destination but left the site without buying the ticket. To do so they will allow the network to collect information on all those users whom they want to target and then only allow the network to use those behaviors (users) to target their ads only. Alaska airlines cannot use Revenue Science and target their ads based on the behaviors on Delta airlines network. This is an explicit agreement between the publisher/advertiser and network.
However in case of ISP based targeting; data providers (publishers, advertisers and other sites) don’t have to opt in. They are opted in by default. Using the example above, a user’s behavior on Delta airlines site (and also information about who clicked on Delta’s ads across internet) is captured without Delta Airlines explicit approval. Now, ISP’s can use that information to power Alaska airlines advertisement and drive all those users, who could have purchased their tickets from Delta, to Alaska airlines. I am sure Delta won’t be happy about it. This applies to every single site on internet, they do not have an option their data will be used and in most cases to power competitors ads, this is a huge deal. I think it is, what do you think? I am sure there will be advertiser backlash too with this kind of technology.

It is also not clear to me if the ISPs will work with individual publishers or networks and provide behavioral data to power their ads on publishers inventory or if they will override publishers inventory with their own ads (which will probably cause sudden death of ISP based targeting) or if they will do popups (pop under) creating new inventory. NebuAd does however have a service for publishers where publishers can use their services on their own inventory, however I am not clear how ISPs plan to use it.

As I predicted earlier this year Behavioral Targeting has become a very common term among marketers. To cash in on this phenomenon a lot of new technologies and companies are springing up, I expect this trend to continue in 2008, we will see more innovation in coming month. Mobile and TV behavioral targeting is next in line too.



  1. Good intel on ISPs getting into BT. The convergance of offline and online data is going to happen. I think it is now migrating to the enterprise, see:

  2. Excellent commentary. I've recently launched a similar blog covering ISP targeting and other digital advertising related topics.
    we should chat some time. I'd be happy to add your blog link.

  3. Zachary Hueras1:58 PM

    Great article.

    You brought up a great point that I had personally overlooked. Now it's my turn:

    Under NebuAd's system, it seems as though they will be swapping out ads on the fly. Ignoring the privacy concerns, what's happening to the content provider?

    Suppose a content provider has a deal with Delta Airlines to display their ad. The provider is paid some sum of money to display the ad alongside their content for a week. But if the ad is being swapped by NebuAd's system, is the contract still valid? This is effectively coercing (read: forcing) the content provider to invalidate their contract with Delta Airlines, and is very illegal. A third party may not interfere with a contract existing between two other parties.

    And what about the existing copyright on every web page ever? By swapping out advertisements (HTML source code), NebuAd and whatever ISP they partner with is effectively creating their own published copy of the copyrighted work for their own profit.

    If a Google AdSense ad is swapped on a home page for a banner, the clicks the ad might have received is stolen revenue from the content provider.

    Something like this can't be allowed to happen. Please? Someone do something, and if you do can I help? Please?

  4. Zachary- I've answered you here.
    Short answer- Publisher's will gladly participate and be contractually involved. No one is suggesting a 2008 version of Gator.


I would like to hear your comments and questions.