The ISPS Strike Back

In the quest for behavioral targeting, companies who control ad networks have been working as hard as possible to allow advertisers to reach web surfers based on their online behavior and not just what page they happen to be on.

The company best positioned to take advantage of behavioral targeting without a doubt was once Yahoo. The wealth of services the company offers is surely staggering and they are able to ascertain what stocks you are considering, what content is in your e-mails, what sports teams you track and much more.

Google has one-upped Yahoo with their purchase of DoubleClick and in an article titled Google Achieves Behavioral Targeting Nirvana, written about ten months ago, I spelled out why Google is now in a better place than Yahoo! to take advantage of the most accurate behavioral targeting. As a reminder, between Google and DoubleClick the surfing habits of virtually all web surfers will be known to Google.

But it is really the ISPs who have a better handle on where people go online than even Google. In an article titled Maximizing Service Provider Revenue from September of 2006 I wrote about how service providers have invaluable surfing information. Here is an excerpt:

But wait, isn’t the cable company in a position to also let you know how many of their customers are browsing Sal Pizza’s website, or Southwest’s? Are you seeing what is happening here? Service providers and many internet companies are sitting on invaluable customer and competitive data. It is staggering in fact.

So the day has finally come where the ISPs will be in a position to fight against Google for a piece of the lucrative advertising market. If you remember a while back the Chairman of SBC Ed Whitacre Jr. complained that Google was using his pipes to make all their money. SBC later purchased AT&T and changed took the name as their own. It would seem clear however that Whitacre perhaps should have been less concerned about who owns the pipes and instead focus on who owns the IP addresses people surf to. It should be noted that Whitacre retired in April of last year.

But you can be sure he is watching with great anticipation as the dream of ISP IP address harvesting for the benefit of behavioral targeting is becoming a reality as a company called Phorm has launched a platform called the Open Internet Exchange with the hopes of attracting websites which will show ads in the UK supplied by Phorm. The hook? Phorm has access to the surfing histories of all customers of BT, Carphone Warehouse and Virgin Media.

To be fair, the Yahoo and Google toolbar allow similar functionality and are certainly not limited to the UK as this initiative is. Still, this technique could make traditional service providers advertising power players. At least these companies will now be able to have a reason to take a share of the advertising pie.

One has to remain skeptical however as Yahoo has had virtually unlimited behavioral targeting data available to it for years and this information hasn’t helped the company in its quest to out-Google Google. Will these new service provider backed networks be a serious threat to Google or just weaken Yahoo? Time will tell of course but I am not sure that the Open Internet Exchange is the guaranteed success the analysts predict.

More from TMCnet and the Financial Times.

  • BILL
    March 11, 2008 at 11:37 am

    ISPs, portals, and ad networks have dropped the ball. They have allowed the behavior targeting debate to spin out of their control, leaving the conversation in the hands of privacy evangelicals that represent only a vocal minority. As a result, most consumers and law-makers have concluded that ad targeting is a corporation vs. consumer issue.
    My recommendation to ad networks, ISPs and portals is to take back the debate. With a modicum of marketing and consumer-friendly product offering, behavioral targeting can become the hero of its age, instead of the defiling villain.Read the analysis at http://www.BroodingSavage.com

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