Behavioural targeting – Not necessarily a bad idea

A new way to target online advertisements could do a lot of good. But only if it is handled sensitively.

IF YOU are reading this, it is a fair guess that you are interested in advertising, online commerce, internet regulation or online privacy. So it may make sense to display advertisements for computer hardware, software or services alongside the online version of this article. It may be, however, that you are reading this online after scanning a comparative review of flat-panel televisions on a technology blog, or visiting websites for villa rentals in Tuscany—in which case it might make more sense to show advertisements for televisions or villas. Targeting online advertisements at a web user, in short, should work better than targeting them at a web page. That, at least, is the idea behind “behavioural targeting”.
It holds great promise. In theory, the internet ought to lead to far more accurately targeted advertising than other media can. In practice such targeting means working out what a web user is interested in. And therein lies the problem: gathering information and building up profiles, if not done in a sensitive and transparent manner, can look an awful lot like snooping. The ultimate way to work out what someone is interested in would be to intercept his web-browsing traffic and search it for keywords. And that is exactly what companies such as Phorm and NebuAd enable internet-service providers (ISPs) to do (see Technology Quarterly). Equipment in the ISP’s network scans passing web pages for keywords that are then used to target ads. The ISP then gets a cut when someone clicks on an ad, which is why ISPs are so keen on the technology.
In recent weeks this technique has caused a rumpus on both sides of the Atlantic, however, because it has been deployed in an apparently underhand way. Several American ISPs have quietly switched on NebuAd’s system, inserted a brief reference to it in their terms and conditions, and hoped that nobody would mind. Britain’s biggest ISP, BT, secretly tested Phorm’s technology last year, perplexing some clued-up users who wondered why their traffic was being intercepted. Activists and politicians have questioned whether all this violates privacy or wiretapping laws. Britain’s Information Commissioner has warned that such systems should be “opt in”, and in America two congressmen have questioned the “opt out” approach of the NebuAd system that is being used by Charter, the country’s fourth-largest ISP.
Attempts to sneak in behavioural-targeting systems through the back door could give a promising idea a bad name. Done properly, behavioural targeting promises to make advertising more relevant for consumers, to increase conversion rates for advertisers and to make online publishers‘ advertising slots more valuable (since even slots on obscure web pages can have relevant ads placed in them).
Behavioural targeting need not involve the wholesale interception of traffic. A good example is the way Amazon uses customers‘ browsing and purchase histories on its website to recommend products (customers can erase their footprints if they choose). Large internet portals such as Yahoo! and AOL can generate profiles for users based on their web-mail and browsing, and partner sites can then use that information when deciding which advertisements to display. Similarly, Google can use the stream of keywords typed into its search engine to target advertisements on other sites.
It ain’t what you do, it’s the way that you do it
But as behavioural-targeting systems become more sophisticated and invasive, it is vital that the companies behind them are open with users about what is going on, and give them control over their personal information. “It’s mine—you can’t have it,” says Sir Tim Berners-Lee, the inventor of the web, of such information. “If you want to use it for something, then you have to negotiate with me.”
Behavioural-targeting systems that intercept web traffic should be “opt in” rather than “opt out”. Customers may, for instance, be happy to opt in if they are offered a discount on their broadband bills: after all, most web users seem to be willing to reveal some personal information provided they get something in return, such as free web-mail or the use of a search engine. But unless they play fair, the proponents of behavioural targeting risk ruining a promising new idea.

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