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Phorm Launches Newsletter, Tackles 'Distorted Reception' of BA Space

Today UK-based behavioral ad firm Phorm launched an e-newsletter, in part to address the negative press that attached itself to the company throughout 2008.

Phorm works directly with ISPs to build profiles of user interest, based on their overall web surfing behavior, and serve relevant ads to them across participating websites. Early last year, privacy advocates attacked the firm under grounds that it is invasive to user privacy.

Months of ceaseless barrage from the press in both the United States and United Kingdom led to a tough year-end: participating ISPs left Phorm to the vultures; and by December it lost UK CEO Hugo Drayton and CFO Lynne Millar.

The new year yielded a change in sentiment for behavioral advertising. In January the AAAA, BBB, DMA, ANA and IAB united to prepare guidelines to position behavioral advertising in a way more favorable to consumers. This month, the IAB's UK arm released a series of guidelines, to which all major search engines agreed to comply.

Today there are a number of behavioral ad models that follow Phorm's philosophy but do not partner directly with ISPs: TARGUSinfo's AdAdvisor uses legacy data from participating companies to build profiles of consumers; Headup tracks user activity, and serves ads, at the browser level; and Google is tentatively experimenting with a behavioral model that leverages its clout as the most-oft-used search engine in the world.

The first issue of Phorm's newsletter, dubbed inphorm, went out this morning. In a post labeled "Distorted reception," Founder/CEO Kent Etugrul reviewed a recent roundtable on privacy and online advertising hosted by Baroness Miller at the House of Commons.

After clarifying to readers that Phorm does not keep any personally identifiable information ("we don't know who you are or where you have been"), Ertegrul wrote:

In their haste to condemn a particular technology, the panelists entirely ignored the matter of users' actually having a choice. It's a denial of the fact that a new online advertising business model has emerged that offers both more meaningful levels of user notice and consent as well as increased protection of consumer anonymity. We uniquely can offer that unmissable and persistent choice.

He also seize the opportunity to plug the behavioral guidelines recently released by the IAB, and emphasized the importance of closing the knowledge gap between what users perceive is a privacy threat and "the actual workings of the online world."

"This newsletter aims to shine some light on cyberspace’s complex web of relationships and technologies such as that found in online advertising," he concluded.

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