Monday, April 14, 2008

Internet Surveillance Steps It Up

New hardware raises bar on surveillance on Internet
Advertising Tool
David George-Cosh, Financial Post Published: Monday, April 14, 2008
Call it the arrival of the Cookies 2.0.
A small U.S.-based firm is quietly testing its behavioural advertising technology with a number of Canadian Internet service providers that some industry observers say could create an outcry over consumer privacy concerns and reshape digital marketing strategies.
In an interview, NebuAd cofounder and chief executive Bob Dykes confirmed his company is testing its hardware with a number of undisclosed Canadian Internet service providers and has launched a sales team in Canada to locate more business.
"We simply map what people are interested in and then sell advertising which is more relevant to their person than previously could be done," Mr. Dykes said. "It's very similar to other behavioural targeted ad networks but has a greater capability to make better connections."
Similarly to how "cookies" -- a list of addresses of recently viewed Web pages-- are embedded within Web sites to record users online traffic, NebuAd's service to ISP's offers marketers a more sophisticated view of users' online activities.
It uses so-called "deep packet inspection."
By installing hardware directly onto ISP networks, Mr. Dykes said NebuAd is able to effectively monitor Web traffic in greater detail and deliver ads based on those behaviours, much more effectively than traditional search-based online advertising pioneered by Web giants Google Inc. and Microsoft Corp.
However, Mr. Dykes said NebuAd does not retain any information that can identify who users are and that subscribers are given the opportunity to opt out of the service once the ISPs have activated it on their networks.
"Because we see more data, we have to be more careful," he said.
Although nascent, this form of behavioural advertising is beginning to see a rise of interest from ISPs in North America and Europe looking for a way to profit from a market long dominated by Google, Yahoo and Microsoft. Mr. Dykes says that in less than a year of operations, NebuAd reaches about 10% of all U.S. online activity and the company's main U.K. rival Phorm Inc. has partnered with companies representing approximately 70% of the UK broadband market.
"Traditionally, marketers find compelling new ways of marketing very seductive," said David Hallerman, a senior analyst with eMarketer. "It can tell marketers where people go and what they did, such as shopping for a new bike."
But as interest grows, so does the backlash from Web users who fear that their online privacy has been compromised.
Internet founder, Sir Tim Berners-Lee, has fueled controversy in the U.K. after he criticized Phorm's tracking technology and said he would change ISPs if faced with such a service. Similarly, Facebook encountered widespread criticism last year after a new ad system, called Beacon, used data from Web sites users visited outside of the site to provide personal ads.
Although NebuAd may confirm to Canadian privacy laws, University of Ottawa law professor Michael Geist said it highlights that many Canadians don't know about the monitoring that may take place as they surf the web.
"You're implementing new levels of surveillance within the network presumably with the consent of subscribers though in some ways it's a bit of a legal fiction," Mr. Geist said. "Many of the subscribers may have agreed though they are unaware to that kind of level of monitoring."

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