Advertising Technology

Advertising was once a business model only available to media companies. These companies specialized in building large audiences by creating programs or entertainment that allowed them to also sell advertising to companies that wanted to reach their audiences. The Internet allows much smaller, non-media companies to both advertise and make money by accepting advertising on web sites. Traditional CPM (cost per thousand) advertising involves advertisers paying based on the number of ad impressions, or views. Other traditional options also available online include negotiated sponsorships of all types. Online advertising also includes Internet-only strategies like Pay Per Click keyword advertising (like Google’s Adsense) that allow anyone to promote products and pay only when someone clicks on their ad, or affiliate marketing, where advertisers pay web site owners commissions on sales or customer referrals. These strategies represent a revolution in advertising because they allow any blog publisher or web site owner to make money online by advertising to their audiences.

Even with the cookie-type behavioral advertising technology, there was a way for users to prevent these ads from targeting them. They could set their machines not to accept any cookies at all by setting their browser security setting to high. This solved the privacy issue, although many websites would (intentionally or not) render improperly with this setting on. In recent news on the behavioral advertising technology front, Microsoft announced that its newest Internet Explorer, version 8, would have a mode called “InPrivate Blocking” that would prevent cookies from being placed on any machine. At first glance, it would seem that either: A. Microsoft is genuinely concerned about online privacy, to the point that the company would allow users to block ads that come from the Microsoft network as well, or B. Microsoft realized that the paltry share of the ad serving market that it currently controls is not as important as inflicting serious damage to Google, which owns a much more significant slice of the online advertising pie (in actuality, at this point, Google’s “slice” looks more like Pac-Man, but I digress). Whatever happens with this flavor of behavioral advertising, there was recently a new type of advertising technology that raised some serious eyebrows, and this one could have been the most nefarious of all.

This latest behavioral advertising technology, brought to the surface by a company called NebuAd, is aimed at tracking user behavior at the ISP level. In other words, there ain’t really a whole lot you can do about it. You need your ISP to get online, so your ISP has access to the information that you are accessing when you are online. They don’t need no stinkin’ cookies, so you can erase them to your heart’s content and they’ll happily keep tracking along. For the unscrupulous ISP, this is a no-brainer. You allow NebuAd to install its platform at your service huband then you split the profits. And this is exactly what some of the smaller firms did in several “trials” of the behavioral advertising technology in the U.S. Of course, there is a caveat – even a firm with cash flow problems and without an iota of ethics would probably want to create an opt-out system before unleashing this behavioral advertising technology platform on its users (you know, the people that already pay them and probably assume privacy). However, there’s something very interesting about how these behavioral advertising trials were done – in just about every case, the ISP seemed interested in keeping the opt-out information as obscure as possible from its users.