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The Evolution of Online Advertising Technology - More Targeting, Less Privacy (Part 2) 
By Scott Buresh (c) 2008

Even with the cookie-type behavioral advertising technology,
there was a way for users to prevent these ads from targeting
them. They could set their machines not to accept any cookies at
all by setting their browser security setting to high. This
solved the privacy issue, although many websites would
(intentionally or not) render improperly with this setting on.

In recent news on the behavioral advertising technology front,
Microsoft announced that its newest Internet Explorer, version
8, would have a mode called "InPrivate Blocking" that would
prevent cookies from being placed on any machine. At first
glance, it would seem that either:

A. Microsoft is genuinely concerned about online privacy, to the
point that the company would allow users to block ads that come
from the Microsoft network as well, or

B. Microsoft realized that the paltry share of the ad serving
market that it currently controls is not as important as
inflicting serious damage to Google, which owns a much more
significant slice of the online advertising pie (in actuality,
at this point, Google's "slice" looks more like Pac-Man, but
I digress).

Whatever happens with this flavor of behavioral advertising,
there was recently a new type of advertising technology that
raised some serious eyebrows, and this one could have been the
most nefarious of all.

This latest behavioral advertising technology, brought to the
surface by a company called NebuAd, is aimed at tracking user
behavior at the ISP level. In other words, there ain't really a
whole lot you can do about it. You need your ISP to get online,
so your ISP has access to the information that you are accessing
when you are online. They don't need no stinkin' cookies, so
you can erase them to your heart's content and they'll happily
keep tracking along.

For the unscrupulous ISP, this is a no-brainer. You allow NebuAd
to install its platform at your service hub and then you split
the profits. And this is exactly what some of the smaller firms
did in several "trials" of the behavioral advertising
technology in the U.S.

Of course, there is a caveat - even a firm with cash flow
problems and without an iota of ethics would probably want to
create an opt-out system before unleashing this behavioral
advertising technology platform on its users (you know, the
people that already pay them and probably assume privacy).
However, there's something very interesting about how these
behavioral advertising trials were done - in just about every
case, the ISP seemed interested in keeping the opt-out
information as obscure as possible from its users. According to
Anick Jesdanun from the AP (1).

1. CenturyTel Inc. rolled out the platform to 20,000 of its
subscribers. To inform them of the new advertising technology,
the company sent an email letting these subscribers know only
that the privacy policy had been updated and had added a
paragraph about NebuAd to the privacy policy. 85 out of 20,000
opted out.

2. Embarq Corp. rolled out the platform to 26,000 of its paid
subscribers. Embarq didn't bother sending any emails to its
subscribers; the company merely put a general notice within its
privacy notice online. A whopping total of 15 out of the 26,000
people opted out.

3. WideOpenWest (or WOW) rolled out the NebuAd platform on
330,000 customers. The only notification before the fact was a
posting on the company's website, along with a reminder in
billing statements to review privacy policies online. They did
email the 330,000 customers to tell them about the advertising
technology trial - after it had concluded. 3,355 people opted
out, but that figure may be inflated, because they aren't sure
how many came from a single customer. WOW indeed.

4. Bresnan Communications, LLC, tried the platform on 6,000 of
its customers. Unlike the other three providers above, the
company did send an email directly to its users about the trial
itself (although I have no idea how it was presented and whether
the info was buried in a footer somewhere) and posted notices on
its website. 18 people opted out.

There were two other participants in the trial - Cable One, Inc.
and Knology, Inc. For the purposes of my numbers below, I've
left them out - not because they don't support the general
theory, but because they don't fit the parameters. Knology
won't reveal how many customers were involved and how many
opted out, although the company did post a notice on its
website. Cable One, Inc. ran the test on 14,000 customers, but
did not give them the chance to opt out.

To sum this up, the total number of "participants" of the four
providers for which we have sufficient data was 382,000, and the
number that opted out was 3,473 (which may be inflated due to
the WOW factor, but let's leave that alone). The total
percentage of opt-outs was less than one percent. I don't know
about you, but I'm guessing that the number of opt-outs would
have been much higher if each of these providers had sent a
piece of direct mail for the sole purpose of informing the
subscribers that this type of behavioral advertising technology
tracking method was going to take place and that they needed to
opt out at such-and-such address. Better yet, they needed to
opt-in at such-and-such address (but I'm guessing that would
doom the trial from the beginning).

All testing for behavioral advertising technology at this stage
has been halted - it would appear because the U.S. House Energy
and Commerce Subcommittee has decided to look into the matter.
Which I guess is fortunate, at least in the short term, for
Google, Yahoo, and other big players in the search world. If
anyone is going to be force-feeding you behavioral advertising
and other targeted ads without your explicit consent, it's
going to be them, not some snot-nosed little start-up.

Recently, the CEO of NebuAd announced his departure, and the
company has announced plans to move forward with a more
"traditional" advertising technology model (probably similar
to the cookie-based platforms we're already used to worrying
about). However, another company in Europe named Phorm has been
having success with a similar behavioral advertising technology
business model (ISP-based), but EU regulators are starting to
jump into the fray.

If I had to guess, I would say that in the future any type of
behavioral advertising technology on the ISP level will have to
be done on a strict opt-in basis, meaning that the person has
taken an action that shows that he agrees with the process. Will
there be a company that emerges that is willing to provide free
or very cheap broadband to people who are willing to be targeted
at the ISP level? Time will tell.

(c) Medium Blue 2008

Source: (1) http://tech.yahoo.com/news/ap/20080831/ap_on_hi_te/
tec_web_tracking_participants
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Scott Buresh is the CEO of Medium Blue Search Engine Marketing,
which was named the number one organic search engine optimization
company (http://www.mediumblue.com/)in the world in 2006 and 2007
by PromotionWorld. Scott has contributed content to many
publications including The Complete Guide to Google Advertising
(Atlantic, 2008) and Building Your Business with Google For
Dummies (Wiley, 2004), MarketingProfs, ZDNet, WebProNews,
DarwinMag, SiteProNews, ISEDB.com, and Search Engine Guide.
Medium Blue serves local and national clients, including Boston
Scientific, DS Waters, and Wake Forest University Baptist
Medical Center. Visit MediumBlue.com to request a custom SEO
guarantee (http://www.mediumblue.com/seo-guarantee.html) based
on your goals and your data.
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