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3 Internet Providers in Deal for Tailored Ads

Bad Phorm? UK ISPs to sell clickstream data to advertisers

While internet giants like Google, Microsoft, and Yahoo have made millions from online search advertising, three UK internet service providers, along with a company named Phorm, are taking an entirely different strategy towards targeted advertising. The primary difference is in the way in which the data is collected. Online search-based advertising, such as Google Adsense, collects data from users utilizing its search engines, and then uses that information to sell advertising space. Phorm has the ambitious goal of collecting user data directly from its source: by monitoring the user directly. After tracking the content of a user’s internet activity, the ISPs are then planning to sell this information (with identifying information removed) to advertisers, who presumably would be thrilled at this unprecedented level of targeting. Using a web-based advertising platform, advertisers would be able to customize their ads to each individual customer.

This is particularly significant because it provides a level of targeting that is far more accurate than even the best algorithms, because advertisers now have access to individual browsing habits, which may differ drastically from keyword searches. With such an advantage, could this make services like Google Adsense obsolete?

Perhaps not. The primary roadblock to this kind of advertising is that due to its intrusive nature, it raises many privacy concerns. Already, many websites have sprung up in the UK protesting the creation of this service. Phorm claims, however, that it offers a level of privacy higher than Google Adsense, since any identifying data is removed. Furthermore, users are currently allowed to op out of the service. Whether or not enough users are willing to subject their personal information to such scrutinization remains to be seen, but the results could potentially have a massive impact on the market for targeted search.