BT moving forward with targeted advertising

BT this week wrapped up a controversial targeted advertising trial with vendor Phorm and is apparently ready to take the platform commercial across its markets, despite criticism that it intrudes on end-user privacy.

BT’s trial with Phorm has been much-watched – and much-criticized. That said, advertising is emerging as an important new potential revenue stream for operators, in particular if they are able to leverage their unique insights into customer behavior, activity and location.

In an investor note released yesterday, Phorm said it has wrapped up its trial with BT, having tested all the elements necessary to support a larger, commercial deployment. Following an analysis of the trial results, “BT has informed the company that it expects to move towards deployment,” Phorm said.

BT’s implementation of the ad-targeting technology is dubbed BT Webwise and is targeted at consumer broadband users. The provider’s description of the service leads with the service’s ability to serve as online fraud protection – by checking visited sites versus a list of untrustworthy sites – before mentioning targeted advertising. With BT Webwise, the company says in its description of the offering, “You won’t see any more adverts that you normally do – they’ll simply be more relevant.”

The challenge for carriers – including BT and its partner Phorm – is that the greater level of targeting is typically enabled by tracking and at times logging user behavior at a network rather than a user level. Although Phorm contends its system does not log or store such behavior, its approach has drawn concerns – though not a ban – from UK regulators.

Phorm has seen its own share of troubles recently, replacing four board members and its chief operating officer in a disagreement over the direction of the business.

In the US, Congress and the FCC have held hearings and information gathering on ad targeting – including collecting ad practice information from Web and communications companies. Service providers like AT&T and Verizon say they do not use behavioral targeting in their ad sales.

That said, more carriers are deploying technologies like deep packet inspection (DPI) boxes that provide them a greater level of control and understanding of the traffic that traverses their networks and which ultimately could be used as part of a behavioral advertising system.