BT joins forces with Phorm
Three of the UK's largest Internet Service Providers, BT, Virgin and Carphone Warehouse, have all signed deals with Phorm regarding the delivery of internet advertising.
More and more websites carry advertising. I'm not sure the users want it, and the adverts are often intrusive and distracting, but advertising is big business, and most of the advertising goes through a small number of advertising brokers such as Google and Adclick.
People who want to advertise buy advertising slots off the ad brokers. People who want to carry adverts on their websites insert a small amount of code into their webpages which pulls in adverts from the ad broker, in exchange for a small fee every time someone clicks on the ad. The website owners get little say in which ads are displayed on their sites. The adbrokers try to tailor adverts according to the page being viewed. For example, if you are looking at a page about car maintenance, you are more likely to see adverts about cars. The ad brokers also try to track you using a cookie, so that they can identify you if you visit another site on their advertising network, with a view of building up a profile on you which allows them to better target the adverts, and hence charge advertisers more for the service. These days, profiling users is the holy grail of advertising. However, many people feel that such profiling is an intrusion of privacy and take steps to delete the tracking cookies and block the ads.
And now to Phorm. It has a deal with the three major ISPs representing 10 million UK subscribers in which it gets to monitor all the web traffic from every customer. Whenever you look at a page on the web, any page, that page will also be transmitted to Phorm which will analyse the page for keywords and use it to build up a profile of your surfing habits. The rationale for this is that when you visit a page carrying an advert from one of its participating ad brokers, the broker will be able to send adverts highly specific to your surfing interests. Confusingly, Phorm says the data it collects will be totally anonymous, yet at the same time it will deliver adverts personalised to the individual user.
Naturally this has rung privacy alarm bells, especially as Phorm will be able to see every page you visit, not just those of sites in its advertising network, and not just the page addresses but the full content of the page. That means if you are using webmail to read your mail, Phorm's servers get to read that too. BT and Phorm say that strict privacy rules will apply, no-one will be identifiable, and any numbers longer than three digits will be stripped out to safeguard phone and credit card numbers, (which means postcodes will remain in place and be legitimate information for its use in profiling).
Phorm's website promises stringent privacy policies are in place but to give a profiling company such unfettered access to a web user's traffic is still worrying. Phorm has offices in New York, London and Moscow, and it isn't clear at present if data will shipped off-shore, which would take it beyond UK regulation.
Technical details are hazy at present but it is hard to see how this differs from spyware running on my own PC, so why are ISPs signing up and giving away information about me without my permission? The answer is money. The ISP will get a commission on the advertising, and market analysts predict that for BT it will be worth £85 million a year to them by 2010. For the user, will it be a "better surfing experience"? I doubt it, but I do expect it will lead to yet more sites plastered with banner ads and devoid of content, battling with genuine sites for the top of Google so they can get a cut of the advertising dollar.
1st March 2008
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