Digital News

Legalised hacking – Phorming an opinion

The controversy over online advertising company Phorm continues to rumble on with an announcement by the company that the trial with its ISP partner BT has been completed. Phorm uses web-tracking software to deliver targeted advertising based on user browsing habits by using deep packet inspection. It is one of several companies developing behavioural targeting advertising systems, seeking deals with ISPs to enable them to analyse customer’s websurfing habits in order to deliver targeted advertising to them.

The trial with BT apparently achieved its primary objective, which was to test all the elements necessary for a larger deployment of the service, including sending out small volumes of targeted advertising to customers that had opted into the scheme. Once all the data has been analysed by both BT and Phorm, BT has informed the company that it will “expect to move forward towards deployment”.

A few months ago the story broke that BT had been conducting secret trials of web-tracking software in 2007. Privacy organisations were up in arms at the potential of the system to breach privacy laws, but BT insisted that everyone taking part in the trials had voluntarily ‘opted in’, allowing the company to track their web habits so that they could be served advertising that mirrored their interests. Now that the trial is over it looks certain that BT will push ahead with the deployment of the system on a much wider audience.

What hasn’t been made clear at this point is whether users have to opt in or out of the service. If it is an opt-out service, then BT will be faced with a furious backlash from customers, accusing the ISP provider of spying on its customer’s broadband lines without consulting them. If BT decide to go with an opt-in system, it remains to be seen how many of its customers choose to have targeted advertising delivered to their in-boxes by their own ISP provider. The two other ISP providers looking at the system – Virgin Media and TalkTalk – are watching carefully to gauge reactions. It remains to be seen if this form of legalized hacking is the next generation in New Media advertising or the basis for a fight of biblical proportions between ISP providers and Privacy Law stalwarts.