Why behavioural targeting isn’t necessarily Big Brother
BT is the latest company to come under fire for trialling Phorm, a system that tracks users’ web habits and serves them with targeted ads. A leading digital rights lawyer has accused the firm of an ‘illegal intercept’ of data by running tests without the knowledge of users. Even Sir Tim Berners-Lee, the ‘founder’ of the internet, has attacked the concept, asking 'I want to know that if I look up books about some form of cancer, it's not going to get back to my insurance company so that I find my insurance premium going up by 5%.' Alain Portmann, co-founder of Web Liquid explains more.
In its defence, Phorm argues that it does not hold any personally identifiable information on the users that it tracks, and that its system allows them to serve internet users with appropriate, rather than irrelevant, advertising.
The Information Commissioner's Office (ICO) service has thus far ruled that Phorm does not infringe the privacy of ISP customers, because it does not collect information which would allow that person to be identified. In a statement, the ICO said: "Users of Phorm will be presented with an unavoidable statement about the product, and asked to exercise a choice about whether or not to be involved on that basis. In addition, they will be able to easily access information on how to change their mind at any point and free to opt into or out of the scheme at any point thereafter."
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The ICO's decision was significant because it suggested that a computer's IP address - the number given to any device connected to the internet - does not necessarily constitute 'personal information' for the purposes of privacy law. However, this is in contrast with the view of the European Commission, which concluded that IP addresses were 'personal information' for legal purposes. Internet companies such as Google have argued that whether IP addresses constituted 'personal data' depends on the use to which they are put.
There are still clearly many questions to be answered. Following a discussion with industry colleagues on the topic of Phorm, three pertinent queries surfaced:
1. How long is the data stored for?
2. Will the Phorm source code be made openly available for public inspection (without of course impacting on Phorm's proprietary rights)?
3. Why is this system opt-out instead of opt-in?
But there is another argument in its favour. Phorm – and other so-called ‘behavioural targeting’ systems - could actually offer consumers real benefits: for example, ISPs such as Talk Talk could subsidise the cost of their services through the revenue generated from behavioural advertising, offering users free services or at least discounts on their services in exchange for their ‘opting in’ to being profiled. In fact, ISPs could even reward users by offering them unlimited broadband in exchange for their profiling information. The reality is that the benefit of receiving more relevant advertising is of no value to the average consumer – relevant or not, consumers still view advertising as advertising.
By offering free services or upgrades for free, the ISPs could effectively increase the amount of pages viewed through their servers, therefore increasing the volume of advertising impressions served and therefore their advertising revenue. The potential growth of behavioural advertising is considerable; spending for internet advertising with a behavioural targeting component will soar from $575 million this year to $1 billion in 2008.
Advertising-funded models currently exist in other sectors: for example, Blyk is an ad-funded mobile platform aimed at teenagers. It gives users free texts and calls in return for brands being able to target them directly.
The question is: would consumers’ willingness to be profiled, based on a clear opt-in, increase if rewarded? I believe so. After all, millions of supermarket shoppers are happy to be profiled via their loyalty cards in return for rewards points, and that in turn helps fine tune their shopping experience. However, the challenge online is that at a certain degree people want to remain anonymous in regards to their surfing and consumption behavior. The other challenge is ensuring that the “data controller” abides by strict regulations and code of ethics.
This is largely an issue of trust. Concerningly, people are less trusting of the ‘data controllers’ following the issues with data management in the public sector. Behavioural targeting firms, and the ISPs and media owners who use them, need both to better educate the public on their methods - and give consumers something tangible in return for their trust.
