Digital Media

Update at 9:08 a.m. PDT, with a statement from Phorm.

Amazon.com has reportedly blocked the use of the controversial behavioral-advertising system Phorm on its British site, according to a BBC report.

The move comes as the European Commission takes action against the United Kingdom, alleging that the country failed to adequately comply with data protection laws in Europe.

In the case involving the United Kingdom, the Commission initiated action after complaints arose over Phorm trials British Telecom launched in 2006 and 2007, in which it allowed Phorm's behaviorial-tracking technology onto its network without users' consent, according to a ZDNet UK report.

Amazon was not immediately available for comment Wednesday morning.

Phorm, however, said in a statement

There is a process in place to allow publishers to contact Phorm and opt out of the system, but we do not comment on individual cases.

Phorm's technology is designed to allow its customers to observe a user's behavior while online, such as Web sites visited or keywords entered, and then serve up relevant advertisements based on that behavior. The controversy over Phorm's technology revolves largely around privacy issues.

In the case of Amazon.co.uk, the BBC reported that the online e-commerce giant issued a statement that it had contacted British Telecom's Webwise, which markets the Phorm platform, and requested that all of its domains be opted-out of the program. According to the BBC report, Phorm noted that it has policies that allow customers to opt out of its system.

And that is what The Open Rights Group is hoping a number of major Web site publishers will do. Last month, the organization called upon Google, Yahoo, Microsoft, eBay, and Amazon to opt out of the Phorm system, according to the BBC report.

And from that group, Amazon marks the first company to give an indication that it is taking such action, the BBC noted.

Corrected at 9 p.m. PDT: An earlier version of this story mischaracterized Nick O'Neill's relationship with Facebook. O'Neill works for AllFacebook.com, which has no official relationship with the social network.

Facebook has announced new ad-targeting features that allow advertisers to expand their target location radius.

Facebook told advertisers Wednesday that they will be allowed to expand the radius of their target audience by a specific number of miles. Whereas advertisers could target Washington, D.C., now they will be able to expand their sphere by adding 10, 25, or 50 miles to their target radius.

"Previously if I targeted Washington, D.C., I would use ads that included Arlington, Virginia, Bethesda, Maryland, and other local cities," AllFacebook's Nick O'Neill wrote in a blog, adding that he hopes the social-networking site will soon add the ability to target based on ZIP code.

Facebook also added the ability to target audience members based on language instead of just by country, which comes in handy when dealing with countries that have more than one major spoken language.

Facebook's announcement comes as Google says it will show ads to people based on their habits. This behavioral targeting is designed to make ads more "interesting," according to Google.

O'Neill addressed that move in his posting:

This move clearly reduced the value gap provided by Facebook advertising and other social networks like MySpace who offer targeting by interest. Facebook still has advertising advantages in that you can target based on an individual's job position, age, location, and gender.

O'Neill also reported that social-networking site also it had reached 190 million active users, however, this is a stat a Facebook representative denied to CNET News.

This was originally posted at ZDNet's Between the Lines.

Google said Wednesday that it will show ads to people based on their habits. This behavioral targeting is designed to make ads more "interesting," according to Google.

In a blog post, Google said (Techmeme):

Google has worked hard to create technology that makes the advertising on our own sites, and those of our partners, as relevant as possible. To date, we have shown ads based mainly on what your interests are at a specific moment. So if you search for [digital camera] on Google, you'll get ads related to digital cameras. If you are visiting the website of one of our AdSense partners, you would see ads based on the content of the page. For example, if you're reading a sports page on a newspaper website, we might show ads for running shoes. Or we can show ads for home maintenance services alongside a YouTube video instructing you on how to perform a simple repair. There are some situations, however, where a keyword or the content of a web page simply doesn't give us enough information to serve highly relevant ads.

We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching "interest-based" advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest -- say sports, gardening, cars, pets -- with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads.

Advertisers have asked for this targeting forever and Google is happy to oblige. What's unclear is whether this move--or other targeting efforts--will raise a long-term ruckus. My hunch is there may be initial concerns and then users will just forget about it.

In advance of what could be a targeted-ad firestorm, Google given users access to their profiles, allow them to edit them and opt out of the program. Google is providing a tool called Ads Preference Manager that allows you to delete interest categories. There's also a plug-in to maintain your opt-out choices.

Want no part of targeted advertising? Google will let you opt out.

(Credit: Google, via ZDNet)

(Credit: Stephen Shankland/CNET Networks)

As part of its effort to make its core revenue engine more powerful, Yahoo introduced new ad targeting features Tuesday, including the ability to select advertisements based on what a person has searched for.

The technology, called search retargeting, is one of three new features designed to tailor ads based on user behavior. The other two are enhanced retargeting, which lets advertisers tune ads according to what users have done on the advertisers' Web sites, and enhanced targeting for search, which lets advertisers adjust ads shown next to search results according to user age and other factors.

Yahoo has argued that it's a stronger company when able to serve both online ad formats, the search ads next to search results and the "display" ads such as graphics and videos. Indeed, as evidence of its hybrid philosophy, it's begun testing display ads next to search results, something rival Google doesn't do.

New Chief Executive Carol Bartz thinks Yahoo is stronger as a whole than "pulled apart and left for the chickens." Of course, if Yahoo did sell its search business, a possibility that Microsoft Chief Executive Steve Ballmer indicated he's still interested in, it could arrange the partnership to use that search engine and thereby get access to the same search query data for targeting display ads.

The new targeting technology is an example of online advertising's advantages over conventional print, TV, radio, and billboard ads. At least in theory, ads can be shown to people whose characteristics or behavior give some indication they're the people advertisers want to reach. Search ads have long had this ability, since they're selected on the basis of specific search terms.

Although Yahoo's advertising business has suffered from the recession, it hopes the new technology will make its ad options more compelling.

"As the economy continues to put pressure on advertising budgets, marketers are looking for increased accountability for every dollar they spend. Yahoo's new targeting products significantly improve the ability for search and display advertisers to reach their target audience, providing increased efficiency and accountability," said Michael Walrath, senior vice president of Yahoo's advertising marketplaces group, in a statement.

Several of the nation's largest Internet service providers were called to Capitol Hill on Thursday, as lawmakers delved whether new laws are needed to protect consumers' privacy amid targeted ad campaigns.

Representatives of AT&T, Verizon Communications, and Time Warner Cable addressed the U.S. Senate Committee on Commerce, Science, and Transportation during a hearing on broadband provider practices and consumer privacy.

The ISPs urged committee members to forgo passing new laws to regulate the use of targeted online advertising, instead advocating for a self-regulation of the industry to keep consumers' Web surfing habits secure and private.

During the hearing, the ISPs, along with Gigi Sohn, president of public-interest advocacy group Public Knowledge, outlined measures that ISPs, advertising networks, and search engine companies should be deploying, as the use of targeted online advertising gains favor with advertisers.

Targeted advertising tracks the various Web sites a user visits, culling information on their surfing habits to deliver specific ads to the user based on that information. In describing the deep-packet inspection of a user's Internet traffic, Sohn compared it to a postal worker ripping open a user's mail.

"Deep-packet inspection is the Internet equivalent of the postal service reading your mail. They might be reading your mail for any number of reasons, but the fact remains that your mail is being read by people whose job it is to deliver it," Sohn said during the hearing.

She added: "Until recently, when you handed that envelope to your ISP, the ISP simply read the address, figured out where to send the envelope in order to get it to its destination, and handed it off to the proper mail carrier. Now we understand (that) more and more ISPs are opening these envelopes, reading the contents, and keeping or using the contents inside for their own purposes or to pass it on to third parties to use."

The Internet providers offered several recommendations for members of their industry, as well as advertising networks and search engines, with respect to behavioral-targeted advertising.

One recommendation includes requiring users to opt into a deep-packet inspection program, or DPP, rather than automatically signing them aboard. And, more importantly, ensuring that they have the ability to sign out of such a program if they initially allow DPP, said Thomas Tauke, Verizon's executive vice president of public affairs, policy, and communications.

Consumers should also have a clear understanding of what the program will do with their information, as well as a prominent location to read about that policy, noted Peter Stern, Time Warner Cable's chief strategy officer. Stern also advocated the safeguarding of the information.

Although targeted online advertising is most popular among advertisers, at least one ISP noted that it also is taking advantage of its methods.

"AT&T does not use a deep-packet approach but will engage in targeted ads, only after a consumer has consented," said Dorothy Attwood, AT&T Services' vice president of public policy and chief privacy officer.

This is what MySpace's new Self-Serve Ad Service looks like. (Click for a larger image.)

MySpace looks to be kicking off a new do-it-yourself service for creating and placing ads on its site.

The service, called the Self-Serve Ad Service and still in beta, lets anyone capable of filling out a basic Web form promote a band or business on MySpace.com.

Users can choose to either upload their own ad or create one using MySpace's system. After selecting from a few dozen templates and uploading an image to place in the ad, users get to select their target audience: gender, age, region, city/state, and interests. For instance, you could target your ad to women ages 27-52 who live in Rancho Cucamonga, Calif., and who love the book Brave New World.

Next, you set your budget--that is, the amount of money you're willing to spend on the overall ad campaign (minimum: $25), and how much you're willing to spend per click (minimum: 25 cents). After reviewing the details of your ad campaign and giving up your credit card number, you're up and running.

Presumably, people who fit the profile you set will get served your ad and directed to any Web site specified by you during the process. Click-through rates on ads served to 27-52 year olds who live in Rancho Cucamonga, Calif., and who love the book Brave New World were not available at the time of publish.

(Via Social Times)

Getting started with a new ad. (Click for a larger image.)

Choosing an ad template> (Click for a larger image.)

Licensing agreement. (Click for a larger image.)

A stealth start-up on Monday plans to take the wraps off a new advertising data exchange designed to connect publishers and advertisers so they can target ads to Web surfers. The privacy pitch: consumers can tweak the advertising data held about them.

The start-up, Bellevue, Wash.-based BlueKai, is taking a novel approach in an otherwise crowded new market for Internet advertising technologies. Many start-ups, ad networks, and Net media giants are honing technologies to leverage vast troves of data about people online so that they can tailor ads to their behaviors, preferences, or demographics--so-called behavioral ad targeting. One targeting trick is to collect data about what someone does at one site, (e.g., reading a Las Vegas travel article at CNN.com), and then target an ad (e.g., cheap flights to Vegas) while they're visiting another site.

BlueKai CEO Omar Tawakol

(Credit: BlueKai)

BlueKai wants to play middleman in that equation. With BlueKai's exchange, sites like AutoBytel can sell anonymous data about the people, for example, who have configured a BMW Mini Cooper on its site in the last month. (AutoBytel would use a tag called a cookie to identify that person's computer, without a name or address.) Then sites like CNN.com could buy that data (in the form of identifying cookies) so that when those people show up at its site, BMW could show a Mini Cooper ad.

BlueKai CEO Omar Tawakol said data exchanged on its service is anonymous. To participate, publishers, sites, and advertisers must agree not to combine personally identifiable information about people with non-identifying cookies. Consumers will also be able to see what information is linked to them (cookies on their PC) in BlueKai's registry database, which will launch Monday. Data might include the person's ZIP code and interests like luxury cars, BMWs, Las Vegas travel, and so on, depending on how often they visit BlueKai's partners.

"We're creating a data economy, where you can get data from a seller to a buyer as long as they meet privacy rules and make the payment. Our job is to set the rules, ensure payment, and guarantee some notion of quality," said Tawakol.

The consumer registry, he said, is meant to get people accustomed to the idea that their data is worth something. For now, BlueKai will let people give to charities like the March of Dimes by maintaining data on the site, but five years down the road they might invest their data like they invest money.

BlueKai's online ad model, keeping consumer privacy in mind.

(Credit: BlueKai)

"We need to stop trading data in the shadows," he said.

Tawakol, who previously worked at behavioral ad targeting company Revenue Science, said this is the first ad exchange focused on so-called intent data, meaning that people have demonstrated an explicit interest in buying a product or service. Ad experts say such intent data is why search engines like Google have had so much success--people simply type what they want into the search bar and a related ad appears. BlueKai aims to do the same thing to improve the targeting of banner or display ads by trading intent data from sites related to auto buying, travel, and shopping.

A publisher like video site Tremor can go to the exchange to buy data for 3 million people who are in the market for an SUV, for example, demonstrated by whether they've configured a car. Tremor can then upsell to those people from Ford, General Motors, or another SUV maker. Like Google, the exchange is based on bid pricing, meaning that advertisers bid against each other for the data. Advertisers or publishers may pay half a cent for a unique cookie, or in the case of the 3 million SUV shoppers, $15,000 for the campaign. But just like with search, the cost varies by the type of consumer.

BlueKai's Tawakol compares the idea to the direct mail marketing business. Offline, marketers call up a data company like Axciom to buy the names and addresses of household decision makers in a certain ZIP code, for example. Then they would take that data and create a campaign.

He said that there's a huge opportunity to take data from sites like Orbitz or Amazon.com to establish shopper intent.

"The behavioral targeting problem is when you rely on context, like someone reading about travel so you assume they're going to book a ticket somewhere, whereas if they go to a travel site, they book something. You know more than Google does about that potential travel," he said. "Buyer data specifies exactly what the user wants."

Consumers buy-in
Still, consumers will need to buy in, too.

"It's already a large opportunity but the Holy Grail is if it becomes something consumers buy into. If they think of it as something they care about and view it as something improving their Internet experience, then you're entrenched," said Ali Partovi, founder of music site iLike who's an angel investor in the company. Partovi founded LinkExchange in the dot-com heyday.

Founded in December 2007, BlueKai has raised a total of $4.7 million from Redpoint Ventures and other angel investors. The company makes money by collecting a percentage of the money exchanged between sellers and buyers of data, but Tawakol would not disclose the split.

So far, only two companies participating in the exchange, Autobytel and video site Tremor, have gone public about their relationship with BlueKai. But Omar said it has relationships with many of the top 10 advertisers, publishers, and travel, auto, and retail sites. All of its partners, however, have had to agree to privacy standards and potentially change their privacy policies to notify people that they are sharing cookie data with a third party. They also must allow consumers to remove specific details, such as travel or shopping interests, or to opt out altogether through a link to the NAI, or the Network Advertising Initiative.

BlueKai's exchange also does not require sites or advertisers to disclose their name to a buyer or seller, but the company will guarantee a site's status and allow a company to say which sites it won't work with.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, has been a critic of the NAI and industry self-regulation. The NAI, he said, has an opt-out system in which people must maintain a cookie on their computer to prevent other Web sites from profiling them, which is counterintuitive to privacy-conscious people who would typically delete all of their cookies.

"In the original , when they were targeting people based on preference without knowing who they are, we thought that was great. But of course the model changed very quickly, and Internet ads started to link names with cookies," Rotenberg said.

"Where we stand now is that the government should regulate any company that's collecting any personal identifiable information. The company should be liable for any misuse of the data, including security breaches," he said.

"And if there's commercial value I think it should be shared with the individual," he said.

A slide illustrating BlueKai's privacy approach.

(Credit: BlueKai)

Target and an advocacy group for the blind announced Wednesday that they've settled a class action lawsuit regarding the accessibility of Target.com for the visually impaired.

The retail giant will establish a $6 million fund for settlement claims and promised to make its site fully accessible to blind visitors as part of a deal ending a class action lawsuit filed two and a half years ago.

The suit against Target was first filed in early 2006 by the Baltimore-based National Federation of the Blind, which claimed Target.com contained thousands of access barriers making it difficult, if not impossible, for blind customers to use.

Bruce Sexton, one of the original named plaintiffs who we talked to in February 2006, expressed frustration with the lack of alt-text on the site that screen-reading software detects in order to vocalize a description of an image. Without such features, the site violates federal and state laws that entitle the disabled equal access to business and government services, the lawsuit claimed.

Specifically, the settlement, filed in the U.S. District Court of Northern California, requires that blind guests using screen-reader software on Target.com "may acquire the same information and engage in the same transactions as are available to sighted guests with substantially equivalent ease of us." The NFB will certify the Target Web site through its Nonvisual Accessibility Web Certification program once the agreed upon improvements are completed in early 2009.

Sexton, in a statement, said the settlement "marks a new chapter in making Web sites accessible to the blind," and commended Target for its efforts. Likewise, NFB President Marc Maurer said he hopes "other businesses providing goods and services over the Internet will follow Target's example."

Veoh Networks, an online video start-up featuring content such as Lost, ESPN SportsCenter, and The Bachelorette, has begun a beta test of advertisements geared to users' earlier video-watching history and other activity at the site.

The new ad system "combines video consumption, searching, browsing, and community activity data from Veoh's more than 28 million viewers to deliver branded ads and content to viewers across multiple lifestyle and interest categories," the Los Angeles-based company said Monday. Tests of the system showed targeted ads perform more than twice as well as ordinary ads, the company said.

Behavioral advertising offers the promise of more closely matching advertisements to people who are likely to be interested, but they've led to controversy because of privacy issues stemming from potentially close monitoring of people's online activity. They've been a particularly touchy subject at social-networking sites, where users store a wealth of personal information and connections to friends and other contacts.

Behavioral advertising as a concept spans a range of monitoring possibilities: everything from showing ads related to what a user is doing on a site at a particular moment, to including the user's history of behavior on that site, to incorporating the user's personal profile data or contacts, to monitoring all of a user's Internet activity.

Veoh is optimistic about the technology, though.

"With more than a billion video views every quarter, Veoh is in the unique position to observe viewer behaviors and patterns across various forms and sources of content at an unprecedented scale," Veoh Chief Executive Steve Mitgang added in a statement.

The initial system will target ads to more than nine categories of users, but the company also can set up customized categories around specific advertiser preferences, Veoh said.