Phorm eyes launch after hard year

By Darren Waters
Technology editor, BBC News website

The ad-serving system profiles the sites people visit online

Online advertising firm Phorm is pressing ahead with plans to launch more than a year after it first drew criticism from some privacy advocates.

Phorm executives will meet with members of the public on Tuesday, following a similar meeting in 2008.

The service has proved controversial for some campaigners who believe it breaks UK data interception laws.

The firm received clearance from the Home Office and police closed a file on BT trials of the technology.

"We have been supported or endorsed by all of the leading stakeholders," Phorm chief executive Kent Ertugrul told BBC News.

"Ofcom, the Information Commissioner's Office, the Home Office, leading privacy advocates like Simon Davies, the advertising industry and publishers have all backed our service," he said.

He added: "We are very, very happy with where we are one year on."

Trawling websites

Phorm's system works by "trawling" websites visited by users whose ISPs have signed up to the service and for whom the technology is switched on, and then matches keywords from the content of the page to an anonymous profile.

Users are then targeted with adverts that are more tailored to their interests on partner websites that have signed up to Phorm's technology.

I am surprised by the fact, after it has been repeatedly explained how the technology works, they seem to be very keen on misunderstanding what it does Kent Etugrul, Phorm

The firm has recently completed trials with BT's customers, and Talk Talk and Virgin have an expressed an interest in the service.

Mr Ertugrul would not give a launch date for the service but said the timescale remained 2009/10.

A spokesman for BT said the company was "still evaluating and considering the results of the most recent trials".

He said the firm remained committed to rolling out the technology but had no more information on how and when that might be.

The UK government has said the technology can only be rolled out if users have given their consent and it is easy for people to opt out.

It has been a turbulent year for Phorm, with the departure of four directors and the UK chief executive from the firm, and the continued campaigning from some privacy advocates.

The Open Rights Group and the Foundation for Information Policy Research remain resolutely opposed to the implementation of the technology.

They argue the technology breaks UK law because of the way it scans websites visited by users to look for keywords with or without the consent of the website owner.

Profile sites

The technology differs from other behavioural advertising systems which tend to use data only from partner websites visited by users and do not work in conjunction with ISPs.

The Open Rights Group has written to seven of the world's leading websites and asked them to block Phorm's attempts to profile their sites.

Mr Ertugrul said some people would continue to have questions "that could never be satisfactorily answered".

He said he had "no regrets whatsoever" about the events leading up to the first trials of the Phorm technology with BT which involved thousands of customers without asking their consent.

"The reality is that before anything goes into a network it has to be tested.

"And there was an enormous amount of legal advice taken before initiating the trial. Testing it was essential."

Small number

He added: "That being said, what we did not take into account was the fact there would be a very small number of very determined people who would do their very best to make it appear in the worst popular light.

"I am surprised by the fact, after it has been repeatedly explained how the technology works, they seem to be very keen on misunderstanding what it does."

Phorm has recently signed a deal with an ISP in Korea to launch a trial of the service, and Mr Ertugrul said it was in conversation with a number of other ISPs globally and partner advertisers.

He said the firm was also exploring the mobile space.

"Mobile is an obviously very exciting opportunity for the advertising world. We are very excited about its potential".

Mr Ertugrul said he remained confident in the technology's privacy measures, despite an ongoing European Union investigating into behavioural advertising systems and more broadly into so-called deep packet inspection of user data.

"We far exceed an regulation out there in terms of privacy, data protection," he said.