Who's picking up your scent?
Facing allegations that it falls afoul of a privacy law called Ripa, Phorm enlisted a third-party to assess its tracking and behavioral ad-serving technology.
It also appealed to the UK's Leading Council and Home Office, equivalent to the US Department of Homeland Security. The Home Office is the only body that can raise a formal accusation of Ripa non-compliance.
The parties reportedly deemed the technology legal under reasonable interpretation of the law. Through the lens by which it was accused, even Gmail and spam filters would be illegal, Phorm asserted (PDF).
Phorm works with ISPs to catalog user interests based on browsing habits. ISP customers are assigned unique numbers, for which a profile of keywords is compiled.
Profiles are matched to ads that appear on participating websites as the person surfs the web. The site and browser data used to create the profile are instantly destroyed — making Phorm more privacy-friendly, argues CEO Kent Ertugrul, than search engines, which store identifiable search data for 18 to 24 months.
In a phone interview yesterday, Ertugrul said that in two weeks Phorm will start serving banner ads that inform users their information is being collected. The ads will enable them to opt out. To disassociate themselves from whatever data Phorm has on them now, users can just clear their cookies, he said.
But an Off switch may not be enough. Yesterday the UK Information Commissioner, which is responsible for enforcing certain data protection and privacy acts, published an assessment of Phorm's technology. The ICO concluded "Phorm products will have to operate on an opt in basis to use traffic data as part of the process of returning relevant targeted marketing to internet users."
Firms working with Phorm include BT, TalkTalk and Virgin Media — 70 percent of the British ISP market, according to Paid Content: UK. The company's technology enables ISPs to monetize online advertising.
ISP-wide tracking for ad delivery also relieves pressure on small websites to generate large readerships for ad endorsement, which in any case aren't tailored to unique individuals, Phorm said.
As for online surfers? Ertugrul made the classic argument: that its brand of behavioral targeting will lower ad exposure and increase ad relevance across the board, making for a more pleasant sponsored-content experience.
Following the controversy about its technology, Phorm is aggressively courting online journalists and bloggers with webcasts and interview opportunities. "We have a responsibility to explain to the public that this is safe," Ertugrul declared.
Early this week Phorm was caught in the act of deleting passages in its Wikipedia article that related to concerns about its ad deals with ISPs.
Ertugrul attributed the covert deletions to green PR people. "Our PR company was a little overzealous […] It didn't know the rules of the game. A when it came to our attention we said sorry. That's pretty much what happened."
