ISPs Get into the Ad Game

There is a movement afoot for ISPs to get into online advertising, in terms of providing data support and tracking for ad serving purposes. Phorm in the UK and and ISPs in the US are seeking to take data on users and their behavior and factor it into online ad targeting.

From a “local” standpoint, this will potentially improve geotargeting. But the emphasis and focus of discussion is on BT and serving brand advertising that relies on deeper data mining about individuals. In my opinion, BT may ultimately collapse under the weight of its own “greed.” It reportedly works but there are going to have to be very high-profile and voluntary consumer privacy measures taken by the involved companies themselves or outside forces are going to try and reign it in.

BT is fairly shadowy right now in terms of consumer awareness and understanding. Consumers want more “relevant” ads but are also uncomfortable with being “tracked.”

While US regulatory agencies are generally ambivalent about consumer interests and tend to favor business, in Europe the European Commission is going much farther to safeguard privacy. We may see some fairly aggressive positions taken in Europe that require actions on the part of search engines and portals at odds with BT capabilities and objectives. It’s not clear at the moment what these might be as a practical matter.

Privacy is a once again a huge issue (see my post on Google Health and consumer privacy).

The online ad industry’s general disregard of the consumer — notwithstanding rhetoric to the contrary — and its desire to offer ever more specific and powerful targeting capabilities to marketers may ultimately “kill the golden goose” by failing to properly self-regulate or educate the public and legislators.

Search is largely immune because it’s “directional” and doesn’t rely on data mining, although Google has experimented with BT in search in the form of ads based on past queries.

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