Monday, February 18, 2008

British ISPs get into Behavioral Targeting

According to Herald Tribune three major internet service providers in Britain (British Telecommunications, TalkTalk and Virgin Media) have jumped into the growing Behavioral Targeting and Online Advertising space.
Phorm , the company behind the BT technology, created an online advertising platform called the Open Internet Exchange. The company will use ISPs data to target right ads on the websites (publishers) participating in this network. These three providers, that represent two-thirds (66+%) of internet access market in Britain, have agreed to provide the customer’s surfing data to this internet exchange. The exchange will be open to any website that wants to join so smaller publishers will also be able to derive value from behavioral targeting.

ISP based BT has certain advantages compared to traditional (cookie based) BT Networks (e.g. Revenue Science, Tacoda, Blue Lithium etc.)

  1. Reach - ISP based BT networks have a bigger reach (granted major ISP participate in it - the one by Phorm does have that reach) compared to the likes of Revenue Science and Tacoda. Even though Revenue Science and Tacoda claim to reach 60%+ internet users, I don’t think they do collect data on and target 60+% of internet users. With their partnerships with other ad servers, they might be capable of reaching 60% of internet users but that is to just to serve any ads not collect behavior and serve targeted ads. ISP on the other hand can collect data on all their users and hence show targeted ads.

  2. Relevance – BT’s promise to provide relevant ads to the online visitors. Networks that work with large number of different kinds of sites (different verticals) can collect wide variety of user behavior data and accurately identify users segments. ISP based BT networks have the potential to collect much richer data (because of their reach) than any network like Revenue Science and Tacoda ever can. Revenue Science and Tacoda collect data on select sites (those that participate in the network) while ISP’s collect data on any site that is accessed by their customers. ISP can better understand their customers’ behaviors and hence serve more relevant ads than traditional BT networks.



Privacy Issues

However, ISP based ad networks also pose a bigger privacy threat than traditional BT networks, as I wrote in my post on NebuAd, another ISP based BT network. NebuAd, one of the first company to enter into ISP based advertising. NebuAd responded to my post and said that the data is anonymized so there is no issue of privacy. Phorm promises the same level of anonymity but I still think that the chances of privacy leaks are more in an ISP based network than they are in a traditional BT network.

Phorm also says that consumers are are in control, they can switch relevance 'off' or 'on' at any time at a site called Webwise.com, site that educates users on how ISP based advertising works. This is somewhat in line with what I predicted earlier this year, where I said:

Behavioral Targeting will continue to grow this year, however, there will be greater push for protecting consumer privacy. The privacy concerns will result in two things:
  1. Clear instructions (or links) on Behaviorally Targeted Ads that will allow behaviorally targeted visitors to opt-out of Behaviorally Targeted advertising.

  2. Opt-in system – Some networks (maybe new ones) will move towards opt-in rather than opt-out (I favor opt-in over opt-out as I wrote in past. So I am making this prediction that this year networks will pay attention to it). A new type of networks or services might come up which will allow users to be an active participant in BT and control who can use their online behavioral data and how they can use it.

Phorm is moving in the right direction by providing proper education (I mentioned the need for education in my post on Google and Doubleclick) and an opportunity to opt-out in an easy way. I think soon we will see the actual opt-out link on the ads served by Behavioral Targeting networks.

Comments?