• The Economist, Friday, June 6, 2008 11:15 AM

Behavioral targeting holds great promise, but attempts to sneak it through the back door threaten to undermine the promising advertising technology. Specifically, The Economist is referring to the new rush of "opt-out" behavioral targeting systems being deployed by British and American ISPs.

You may have heard of Phorm and NebuAd, companies whose technologies collect keywords from user surfing behavior in order to deliver targeted, relevant advertising. Phorm and NebuAd then share the ad revenue with the ISPs. Many regulators don't like this approach to targeted advertising, particularly because users have to opt-out of having these systems track their Web behavior.

"Done properly, behavioral targeting promises to make advertising more relevant for consumers, to increase conversion rates for advertisers and to make online publishers' advertising slots more valuable," The Economist says, but it need not involve the wholesale interception of traffic. Sites like Google, Yahoo and Amazon do a great job of building profiles on their networks and targeting ads based on those profiles. But if such targeting is going to extend to the ISP level, it's vital that the companies behind the technology clearly explain themselves, and give users full control over their personal information. It may be that customers are happy to opt-in to targeting programs that offer incentives. But the targeting companies have to play fair, or they risk ruining a promising idea.

Read the whole story at The Economist »