Isp ad partners nebuad and phorm eye overseas expansions

Although the engineering differ somewhat between the two companies, both scheme essentially observe users' online interactions, such as which sites they visit and which hunt terms they use, and deliver targeted ads based on this behavioral data.

"ISPs have been the also-ran in the online advertising boom so far, but this engineering will provide them with a valuable new gross stream," said Paul Goad, NebuAd's U.K. Managing Director. Goad, who antecedently worked at AOL-owned behavioral targeting firm Tacoda, joined NebuAd in Jan to run the Greater London office. The company acts like an ad web, reselling low-cost display ad stock list from other networks to advertisers and agencies.

According to research firm silver screen Digest, BT, TalkTalk and Virgin media presently serve at least 50 percentage of U.K. Net users. Nevertheless, this does not necessitate that Phorm will have entree to that part of the marketplace. Phorm communicating Director David Sarday would not reveal whether Phorm's agreements with the ISPs are scoop.

With NebuAd up and run in the U.S. And edifice its U.K. Operation, Phorm may fancy a slice of the pie across the pond in the U.S. The company already has a New York computer address, and though Sarday did not explicitly state that Phorm is eyeing the U.S. Marketplace, he did tell ClickZ News that senior U.K. Staff are presently in the U.S.

NebuAd's Goad said the firm is currently continuing discussions with a number of U.K. ISPs, and suggested he wasn't overly concerned about competition from Phorm. "I don't think it's a winner-takes-all market," he said. "Different ISPs have different needs and different business models. There's definitely space for more than one company."

NebuAd has had a presence in the U.K. Since late last year, and Goad said he hopes NebuAd will launch in the U.K. This year. In the U.S. The company claims to track Internet usage of between 10,000 and 30,000 users, and to have contracts with multiple ISPs.

The deciding factor in the success of these companies is likely to be consumer tolerance. In theory, ISPs have the power to construct extremely detailed profiles of their subscribers, a practice that clearly raises privacy concerns.

According to Phorm, user data is observed entirely anonymously, and the system does not log or store any personal information or IP addresses at any point. Users that demonstrate an interest in certain products or services through their browsing will be assigned a number, placed in "channels", and served ads accordingly.

Sarday said users can opt-out of the system fully at any time, and no data will be collected. "Users can visit Webwise.com to switch the service on or off at any point," he continued. "It's ironic that the discussions surrounding this are about privacy considering the standard is so high."

Google, MSN and Yahoo currently store information on user searches for at least a year, partly in response to concerns from EU regulators.

Though Goad acknowledged the potential privacy issues with systems like NebuAd's, he stressed, "We have gone to great lengths to validate our model in terms of privacy."