Behavioral Targeting Has Its Day in the UK

British behavioral targeting firm Phorm will begin a limited test tomorrow in the UK, working with ISP British Telecom  to launch what it dubs its Webwise platform. Phorm will work directly with British Telecom, monitoring users web surfing habits to deliver up more relevant advertising. A whole host of questions about just how far behavioral targeting can go in the UK are about to be answered.

In the States, those questions have been pretty safely put to bed. NebuAd, an ad firm offering up a service very close to Phorm’s, suffered through a barrage of bad press, Congressional hearings, layoffs, and eventually even losing its CEO.

Phorm, meanwhile, has had to delay its tests, originally set to run in April, and it currently still under regulatory scrutiny. From a ClickZ article:

Earlier this month, the U.K.’s Department for Business, Enterprise and Regulatory Reform (BERR), responded to concerns from the E.U. Information Commissioner, Viviane Reding, surrounding the legality of Phorm’s practices. The City of London Police were also reportedly inspecting the Phorm/BT relationship.

According to the BERR, the technology is capable of being introduced “legally, appropriately, and transparently in the U.K.,” as long as users are presented with an “unavoidable statement about the product and asked to exercise a choice about whether to be involved.”

Phorm and British Telecom suffered a mild slap on the wrist in 2006, after it was discovered that the two had started tracking users without their consent. The extreme baby steps the two are taking now are a clear reaction to that episode.

Which, in a way, shows the that in this case, the system is working better in the UK than in the US. What Phorm and British Telecom are doing, if done with clear consent, isn’t illegal or unscrupulous. If the tests are successful, every side of the equation wins. Advertisers get at the people who may actually buy their product, publishers can charge higher CPMs, and consumers get ads at are at least nominally more relevant to their interests. Anyone who has an interest in quality content on the Internet, which is again every side of the equation, should hope that Phorm and British Telecom’s test is a success.