Filed under: World wide web, Competitive strategy, Marketing and advertising, Market matters, Small business, Technology
After my post of last week lambasting NebuAd for using information obtained from internet service providers in order to serve ads to web browsers based on users’ browsing behavior, I was contacted by the CEO of NebuAd, Robert Dykes. He agreed to speak with me about his company and the internet advertising world.
I started by asking Dykes what steps NebuAD has taken to maintain the privacy of the customers of the ISPs with which they work. Dykes told me his company realized early on the security implications of its processes.
“In formulating the structure of how our equipment would work, (at this time) the government was subpoenaing AT&T and Verizon for their data… (and) AOL’s search data had become public. We realized that…we had to be extremely careful in the way we structured our equipment and what we did on the internet… so that we would never be the subject of a subpoena from the government. So our structure is such that we never have any information that would be of use to the government. (There) never would be any information there of a personal nature.
“(We) built our system such that, as we map a user over and over again… that mapping is reflected only as a hash number, not as any personally identifiable information, not even an IP address… All we track is that somebody qualified for certain interest categories…(we) don’t keep the raw data about what searches they did.”
He went on to explain that, as the information about an ISP customer is sent to NebuAd, it is put through a one-way encryption so that NebuAd receives and retains only that hash string, unidentifiable as a specific person. The browsing history of that person is used to define categories of interest of that person, but the history of pages visited isn’t retained.
To further diminish the possibility of misuse of sensitive information, NebuAD also doesn’t carry advertising for sex-related or sensitive drug products, and therefore has no categories for these.
Dykes went on to explain NebuAD’s business advantage. Most behavior marketing depends on cookie drops to track customer visits and interests, which limit this profiling to few instances and few interests. By using ISP information, NebuAD is able to better define the tastes and interests of those ISP customers, so that when they browse to an ad-supported page, NebuAD can serve up a more tailored marketing message.
For example, according to Dykes, advertising on the huge automotive sites for 2008 is already sold out, because advertisers know that they can reach hardcore auto fans there. NebuAD is able to find those people and follow them to other sites, such as BloggingStocks.com, and serve up the same car-related ads to them there. And since, according to him, three-fourths of world wide web ads this day are untargeted, there is a large market for NebuAd’s ISP-based targeting.
Dykes also told me that, since NebuAD cuts the ISPs in on the revenue stream, this becomes a new source of income for them. This is good news for the ISPs, because they have the ability to see the way the web is evolving to an ad-supported model, much like television. Since they’re, at present, in the business of selling the same internet connectivity that Google and others are busy preparing to offer for free via wide-ranging Wi-Fi and WiMAX networks, the long term viability of their business may depend on finding revenue beyond connection fees.
Most sobering, though, was Dykes’ caution that my concern that his company was capturing information that could be misused missed the big picture. He reminded me that packets are traversing the equipment of many massive companies all day each day. The potential leaks in the data stream are voluminous, and one would have to be very na
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