04.16.08
Good Phorm
(Updated with links and expanded personal view 16/04/08)
Advertising is all about extracting money, but they missed a trick by not charging for tonight’s “Town hall event”.
I loved the format of the town hall event, it was often chaotic with people talking over each other responses cut short (perhaps obeying the Roberts Rules of order might have helped).
Perhaps a meeting reminiscent of a scene from “there will be blood”, Kent Ertugrul (CEO of PHORM) hoping that a few walk troughs and an general appeal that this technology would benefit the UK economy, would take some of the heat away and allow him to resume tapping the precious oil.
Civil liberty pitched against opportunist corporation. This is a fairly unusual meeting outside of a court of law, but probably a necessary PR for a company who’s investment was in jeopardy.
What’s the problem?
I think there are concerns with the technology and the precedence it sets for similar services. But these issues alone would not have been so inflammatory if it wasn’t for the panic caused byt he ISP retrospectively announcing that Phorm was already active, already profiling blissfully unaware users.
As badphorm.com puts it:
“Naturally the ISP’s are not too keen on telling their users this, they’d much rather feed us all platitudes about how it’ll help combat phishing and how the targeted adverts will be so much better than the random ones we see today. In fact, they didn’t even announce it to the UK press, we had to find out about it from the New York Times!”
What is phorm?
A advert brokering system targeted to ISPs.
Why is form different?
Advert slots on participating web sites show adverts based on who is looking at the web site rather than the content of the web site being viewed. I.e a user who is browsing a medical site might get an advert for a BMW rather than for Viagra (if they had been surfing a lot of car web sites previously).
The idea is that by sitting on the ISP’s computer scanning each page a user views, Phorm can find words which link to a predefined marketing persona, or hat as Phorm call them.
Lets say that Phorm keeps a top 5 of most useful hats, with a suitable aging algorithm. Then when visiting a site with a Phorm billboard (a participating site which could be anything from a big organisation to a tiny blog). The adverts are shown and rotated from the top 5 – effectively following you around the web. This is seen as providing a much more direct and relevant way of advertising to users.
It’s not really clear how specific the categories are, and a lot of the talk was contradictory. At one point alluding to the catogaries being as s broad brush as the old ’self-actualisers’ or ‘aspirationals’ lifestyle segments – while a oncrete walk through provided by Phorm’s CEO, showed how a specific advert for “luxury paris hotel” was generated based on the user previously surfing on travel sites related to paris and more expensive hotels. The linkage of specific details there – location, price range and service implies a lot more personal context captured than the simplistic hat’s model proposed in the introduction.
Phorm’s pitch:
- Revolution in privacy (compare with incumbent search engines)
- Your choice, always your choice to opt in or out
- Subsidising Internet connections is the only way to achieve infrastructure and low cost – Phorm provides the best solution
- Opt in not a problem – Permission based advertising is ‘the new black’ – unsolicited adverts perceived as a menace
Opposition
- Phorm does good job with the issues of data protection – no real problems with storage of user’s details, but privacy is compromised
- Phorm management appear open, and engage with academics and lawmakers.
- Issues with mission creep. Commercial company would always be under pressure by its shareholder/VC to bring in revenue. The placement of the technology in the ISP (easy access to IP addresses), could prove too irresistible?
Technical analysis from Dr Richard Clayton
The full report can be found here: http://www.cl.cam.ac.uk/~rnc1/080404phorm.pdf
But basically he points out that the mechanics of the idea isn’t very good:
1. Keyword scanning is a rubbish way of matching, it’s what search engines used to do before google – he provided the most popular words on a guardian page which came up with words such as “offensive”
2. By placing the PHORM server right in the path of the users, it creates a point of failure (e.g DNS table poisoning) which wasn’t there before
3. Forging cookies is dodgy and might even be unlawful
The odd twist and turn emerged – The opposition stated that the Guardian had backed out of a Phorm deal due to fear of brand tarnish. This was denied by Kent(Phorm CEO), who stated that Phorm hadn’t yet lost a single account, but Kent’s view was immediately challenged challenged by a gentleman in the audience who stated that he worked for the guardian and was sure that the Guardian was not using the service.
Here is my take.
I believe that banner/strip adds in other’s websites simply do not work. I find it hard to hold this view while being aware of Google’s overflowing coffers. But as a user, the ad-sense sprays complete nonsense at me to the point where I have learned how to blank the ads out completely.
I’ve trained my brain to ignore adverts, and a few examples might help to illustrate
- After breaking my leg in a car crash – ad sense (within the gmail page) suggested that I get insurance. Thanks!
- After buying a load of C++ books for my team in work, Amazon’s ‘new for you’ thinks that that’s all i’m interested in now. It’s aging forgot about my Pablo Neruda, my Dostoyevsky, my Paris lounge by night vol 4 and my Feynman lectures.
I totally understand how google’s search sponsored links are revenue generating, but not adsense.In general I’m suspicious of any software which tries to pre-empt what I want to purchase or do. Just because I’m searching for photos of Kylie, doesn’t mean I want to buy her CD or DVD. Keywords alone cannot provide a revolution in targeted advertising.
Most of my smaller purchases in the past few years – my books, CDs, software, Films are products that have been sold to me by bloggers. I’ve spent a lot of time refining the selection of blogs that I tune into, choosing ones which reflect my current tastes and interest and killing subscriptions to blogs which have become stale or uninteresting. For me the list of my blogs provides a pretty good lump of data to mine for things which interest me, and I’m happy to purchase things in my own time based on my own reading. I view a lot of junk sites which only mildly interest me, or that I followed by mistake.
The problem with this sort of purchasing by recommendation pattern is that there is no room for a broker to make a cut. It’s not easy to understand the model, hard to centralize and monetize. I do find product reviews useful – but only if I know something about the person who is reviewing.
Despite my personal view, it’s pretty clear that anyone who takes even a fraction of the google advertising pie will become immensely rich, and this greed has so many companies and opportunistic individuals licking their chops. Phorm and Facebook’s were the first company to push ahead to satisfy their shareholders. So it’s important that we have this debate – on line advertising is different- the first solutions are likely to be flawed.
I vote for more town hall debates.
The BBC has covered the event. http://news.bbc.co.uk/1/hi/technology/7349715.stm