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Now that behavioral targeting has become more pervasive (and more effective), it is being talked about not only by publishers and advertisers, but also by privacy advocates -- organizations like the NAI and IAB and, in Washington, the FTC. At issue is if BT players are doing enough to disclosure to consumers how BT works and offering them the opportunity to opt out of being tracked by BT vendors and publishers. There has been much discussion about how to regulate behavioral marketers; but no solution that satisfies everyone. The BT industry so far has contended that website privacy policies are sufficient disclosure since many of them contain links to opts out opportunities like the NAI site. Google and Bluekai have announced 'preference pages' or registries that allow Web users to say what type of BT they are interested in receiving. But, the other, more common option is to put that information in the Privacy Policy of the site. But the problem with that is that no matter where disclosures are placed on the service provider's site, most people won't ever see them. How will a customer visiting Retail SiteX know that Company Y is going to use their browsing behavior to later display relevant ads to them as they surf the Web on Network Z? The average customer won't. The only way a customer will know what forms of BT advertisers are using is if the advertisers themselves tell them. I think that it's time for advertisers to step up in this privacy debate. Thus far the pressure for disclosure has been placed on networks, behavioral marketing providers and publishers. The key players in those industries have done a good job of becoming more transparent (though there is still work ahead of us), while advertisers haven't been asked to do anything. Advertisers are clearly benefiting from behavioral marketing, and its time they disclosed what type of behavioral marketing they participate in, and allow customers to opt-out. How they do this is open for discussion: Tag each

A data protection group has warned that opting out of Phorm will not prevent the technology from processing data that users enter through web site search portals. Companies such as Amazon, Wikipedia and LiveJournal have taken the decision to block the controversial advertising technology from scanning their sites because of the privacy implications. However, Open Rights Group executive director Jim Killock has since admitted that, even if web sites opt out of the programme, ISPs supporting Phorm will still be able to profile users visiting those sites. "This is because Phorm can scan search requests entered in those sites, even if it cannot detect the web site pages users are viewing," Killock said. "For example, even if Google opts out of Webwise, when a user types in a Google query and they are using BT, it will still go through Phorm before it reaches BT." Killock added that Phorm does not gain permission from either senders or receivers of the information before it processes the data. Phorm uses browsing information to serve accurately targeted advertisements, and is soon to be rolled out under the Webwise brand by internet service providers BT, Virgin Media and TalkTalk. However, as the time for deployment nears, the controversy surrounding the technology only seems to be increasing.

On Monday, U.K.-based digital rights organization Open Rights Group submitted an open letter to major online media players, urging them to prevent ISP-level behavioral targeting firm Phorm from tracking user interactions on their Web sites. The letter, sent to Google, AOL, Microsoft, Facebook, Yahoo, Amazon and Ebay, said, "[ORG] believes that it is clearly in your company's interest, it is in the interests of all of your customers, and it will serve to protect your brand's reputation, if you insist that the Phorm/Webwise system does not process any data that passes to or from your website." "We have received the letter and are giving it careful consideration from privacy and business perspectives," a spokesperson for AOL and its social network Bebo told ClickZ News. Similarly, in reference to the ORG correspondence, a Google spokesperson told ClickZ, "We've received the ORG's letter, but we're still considering the points they raised, so we don't have a response to make at this time." According to information published on the British Telecom Web site (one of Phorm's ISP-partners,) site owners can specifically request that their properties are not "scanned" by Phorm's technology, by contacting the firm directly. Phorm announced deals with three major U.K. ISPs over a year ago, but its technology is still yet to be fully deployed. BT has, however, carried out live trials of the platform with some of its customers. Phorm's CEO, Kent Ertugrul, claims that BT will implement his company's technology by the end of the year, but BT itself remains less committed to that timeline. Both AOL and Google have vested interests in the behavioral targeting space, although not in the controversial area of deep packet inspection (DPI), in which Phorm's technology lies. AOL-owned Tacoda targets ads based on users' activity across a range of partner sites, but does not directly intercept ISP-data. Google also announced this month that it will begin testing similar behavioral targe

Will there be one major catastrophe, or just smaller disasters? Panelists discuss what security issues we should be watching out for, where the threat might come from, and the difficulties in predicting the unpredictable. Panelists include: Whitfield Diffie, vice president and chief security officer for Sun Microsystems; Ronald Rivest, Viterbi Professor of Electrical Engineering and Computer Science at MIT; Adi Shamir, professor of computer science at the Weizmann Institute of Science in Israel; and Bruce Schneier, chief security technology officer for BT Counterpane. Moderating the panel is Ari Juels, chief scientist and director of RSA Laboratories.

The European Commission threatened Britain with sanctions on Tuesday for allowing an Internet service provider to use a new advertising technology to track the Web movements of customers. The European telecommunications commissioner, Viviane Reding, said that use of a tracking tool created by Phorm violated European privacy laws. The country's largest service provider, BT, acknowledged last April that it used the tool without customers' consent in 2006 and 2007, Ms. Reding said. "European privacy rules are crystal clear: a person's information can only be used with their prior consent," Ms. Reding said. The case could become a test for the limits of ads that aim at online behavior. Supporters of the practice say it has the potential to transform advertising by allowing marketers to show Internet users only ads that are considered relevant to them, based on their surfing habits.

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Plans by Internet service providers to deliver targeted adverts to consumers based on their Web searches threaten online privacy and should be opposed, the founder of the Web said Wednesday. "I just want to know that when I click on a link it is between me and the Web, and the Internet service provider is not going to immediately characterise me in different categories for advertising or insurance of for government use," Tim Berners-Lee told a Web conference in Madrid. "The postman does not open my mail, the telephone company does not listen to my telephone conversations. Internet use is often more intimate than those things," he added. New software called Webwise allows Internet service providers to show adverts to their clients based on their Web browsing habits instead of based on the content of a single Web page as currently happens. Several British Internet service providers, including BT and Virgin Media, have said they are considering using the software, which is aimed at making the Web more financially profitable for advertisers. With the help of other scientists at the European Organisation for Nuclear Research (CERN), Berners-Lee set up the Web in 1989 to allow thousands of scientists around the world to stay in touch. The WWW technology -- which simplifies the process of searching for information on the Internet -- was first made more widely available from 1991 after CERN was unable to ensure its development, and the organisation made a landmark decision two years later not to levy royalties.

European Union's move indicates growing government concern over how Internet companies are using individuals' private data The European Commission began legal action against the U.K. Tuesday over its failure to protect Internet users from Phorm -- a covert behavioral advertising technology tested by the U.K.'s biggest fixed line operator, BT, in 2006 and 2007. The move signals growing concern in Brussels over the way new Internet-based technologies are using people's personal data. In addition to taking legal action against the U.K., the Commission also issued a general warning to all 27 E.U. countries to uphold privacy laws, especially regarding social-networking Web sites and users of RFID (radio frequency identification) technologies. In Canada, the federal government has even proposed a legislation that will provide law enforcement agents sweeping powers to obtain user information from ISPs. The Commission, the executive body of the European Union responsible for upholding laws, said the U.K. had failed to enforce E.U. data protection and privacy rules, because broadband Internet subscribers were not informed that their browsing was being tracked.

More consumers are growing comfortable with online behavioral targeting, perhaps as a result of an increase in familiarity, but the majority remain uneasy with the practice. That's according to a new study conducted by TNS on behalf of the privacy group Truste. For the study, consumers were asked whether they agreed or disagreed with the statement: "I am comfortable with advertisers using my browsing history to serve me relevant ads, as long as that information cannot be tied to my name or any other personal information." Twenty-eight percent of respondents agreed, up from 24% who agreed when the same study was conducted last year. At the same time, 51% said they disagreed that they were comfortable with anonymous behavioral targeting. While that figure represents a slim majority, it's down from last year, when 57% of respondents said they disagreed. At the same time, more respondents than in the past now say they delete cookies. Almost half--48% of survey respondents--said they erase cookies at least weekly, up from 42% last year. It's not clear how much overlap there is between the respondents that regularly delete cookies and those who say they're uncomfortable with behavioral targeting. Colin O'Malley, vice president of strategic business at Truste, attributed the increase in the proportion of consumers who said they were comfortable with behavioral targeting to increased publicity over the issue. He said the recent attention to the issue in the mainstream media has helped to increase transparency. He added that the increased cookie erasures showed that consumers want to be able to manage their experience. "Cookie deletion is just one more indication that consumers are seeking tools to increase their level of control," he said.

Wikipedia told the controversial U.K. advertising firm Phorm on Thursday not to spy on Wikipedia's users, saying the company's plan to monitor what sites people visit on the net invaded people's privacy. Wikipedia now joins Amazon.co.uk in opting out of the Big-Brother-esque marketing scheme and creating the possibility of a mass opt-out by the net's largest websites. Phorm wants to pay ISPs -- such as British Telecom -- to let it build marketing profiles of its subscribers by installing boxes inside the ISP that monitor every url users visit and every search they run. Using those profiles, Phorm can charge advertisers high rates to serve targeted ads. But in an email sent Thursday, Wikimedia.org told Phorm not to record anything about urls from domains it controls, ranging from Wikiquotes to Wikipedia -- one of the most popular sites on the net. Phorm operates an opt-out system for sites and ISP customers, but it would be virtually impossible to verify if the company actually complied with such requests. "The Wikimedia Foundation requests that our web sites including Wikipedia.org and all related domains be excluded from scanning by the Phorm / BT Webwise system, as we consider the scanning and profiling of our visitors' behavior by a third party to be an infringement on their privacy," the email read, according to a Wikimedia blog post.

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Broadband is cheaper in many other countries than in the United States. "You have a pretty uncompetitive market by European standards," said Tim Johnson, the chief analyst at Point-Topic, a London consulting firm. Other countries have lower costs for the same reasons their DSL service is faster. Dense urban areas reduce some of the cost of building networks. In addition, governments in some countries subsidized fiber networks. But the big difference between the United States and most other countries is competition. "Now hold on there," you might say to me. Since I wrote that many countries don't have cable systems and the bulk of broadband is run by way of DSL through existing phone wires, how can there be competition? Aren't those owned by monopoly phone companies? True enough. But most big countries have devised a system to create competition by forcing the phone companies to share their lines and facilities with rival Internet providers. Not surprisingly, the phone companies hate this idea, often called unbundling, and tend to drag their feet when it is introduced. So it requires rather diligent regulators to force the telcos to play fair. And the effect of this scheme depends a lot on details of what equipment is shared and at what prices. Britain has gone the furthest, forcing BT Group to split off a unit that operates the actual network and sells to various voice and Internet providers, including its own telephone service, on an equal basis. The United States was early with this sort of approach, requiring telephone companies to allow rival Internet service providers to sell DSL service using their networks. The way these rules were written, however, meant the wholesale cost was so high that providers like AOL and Earthlink couldn't offer a better deal than the telcos themselves. And the plan was largely abandoned in 2003 by the Federal Communications Commission on the theory that the country is better served by encouraging competition

Bruce Schneier is the chief security technology officer at BT and a celebrated writer and speaker on privacy, cryptography and security issues. Welcome to the future, where everything about you is saved. A future where your actions are recorded, your movements are tracked, and your conversations are no longer ephemeral. A future brought to you not by some 1984-like dystopia, but by the natural tendencies of computers to produce data. Data is the pollution of the information age. It's a natural byproduct of every computer-mediated interaction. It stays around forever, unless it's disposed of. It is valuable when reused, but it must be done carefully. Otherwise, its after effects are toxic. And just as 100 years ago people ignored pollution in our rush to build the Industrial Age, today we're ignoring data in our rush to build the Information Age. Increasingly, you leave a trail of digital footprints throughout your day. Once you walked into a bookstore and bought a book with cash. Now you visit Amazon, and all of your browsing and purchases are recorded. You used to buy a train ticket with coins; now your electronic fare card is tied to your bank account. Your store affinity cards give you discounts; merchants use the data on them to reveal detailed purchasing patterns.

Educating consumers about what behavioral targeting is and is not up to, deep within the cookies of their browser, seems to be a bit like alternative energy development. Pretty much everyone says the industry should be doing more about it, and yet it is hard to see where and with whom it starts. Most online materials related to BT are pitched to one end of the value chain, marketers. It's not clear to me that most of the companies in this space are even comfortable talking directly to consumers, let alone taking the time to develop an accessible language to describe their process. Specific Media controls the BehavioralTargeting.com domain and uses it to educate marketers about its methods. Even the Wikipedia entry for this field is really an explanation for advertisers. This is understandable, since most people who are familiar with the term likely come from the industry. But it seems to me the industry misses an opportunity to practice more often, and in more places, what it knows ultimately needs to be done. You guys need to find better, clearer, simpler ways to explain what it is you are doing in our browsers -- and why you are doing it. And what are the real benefits and risks a consumer incurs by tacitly agreeing to your presence? Isn't every possible point of contact with a suspicious consumer a teachable moment? In an earlier post, I recounted how I struck some retargeting gold when FetchBack tagged and remarketed me during my travels online. An opt-out option is clearly available at the front page of the FetchBack site. Unfortunately, from there you either opt-out (kick over to the Network Advertising Initiative site) or click into a long scrolling privacy policy that doesn't actually get around to explaining retargeting until a few screens down.

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.

As online shopping becomes a greater force each year, the behavior of online shoppers becomes more and more scrutinized. Ad net AudienceScience, a key scrutinizer, announced today the findings of a commissioned study conducted on its behalf by JupiterResearch designed to measure the receptiveness of online shoppers to behavioral targeting. And the survey says: They like it -- at least that they are more responsive to ads that are behaviorally targeted than those that are contextually targeted. And they were pretty clear about it, with 65 % responding that they are more receptive to BT, and only 35% saying they paid more attention to contextual ads. "Since its inception, behavioral targeting has been an evolution of contextual advertising, and these findings are testament to its power to more effectively engage with consumers on their own level," said Marla R. Schimke, VP of Marketing, AudienceScience. "If we conduct the same study in a year, five years, ten years, I believe we'll see this already substantial gap between the two continue to widen as more and more brands and marketers realize that they can use behavioral targeting to specifically target their ideal customer."

A third (34 per cent) of discarded hard disk drives still contain confidential data, according to a new study which unearthed copies of hospital records and sensitive military information on eBayed kit. The study, sponsored by BT and Sims Lifecycle Services and run by the computer science labs at University of Glamorgan in Wales, Edith Cowan University in Australia and Longwood University in the US, also found network data and security logs from the German Embassy in Paris on one purchased drive. Researchers bought 300 drives from eBay, other auction sites, second-hand stalls and car boot sales. A disk bought on eBay contained details of test launch routines for the THAAD (Terminal High Altitude Area Defence) ground to air missile defence system. The same disk also held information belonging to the system's manufacturer, Lockheed Martin, including blueprints of facilities and personal data on workers, including social security numbers. Lockheed Martin denies that the disk came from it. The arm manufacturer has launched an investigation that aims to uncover just how the sensitive data might have been wound up on the disk. Two discs bought in the UK apparently came from Lanarkshire NHS Trust, including patient medical records, images of X-rays and staff letters. Lanarkshire NHS Trust runs the Monklands and Hairmyres hospitals. In Australia, the exercise turned up a disk from a nursing home that contained pictures of actual patients and their wound photos, along with patient details. A hard disk from a US bank contained account numbers and details of plans for a $50bn currency exchange through Spain. Details of business transactions between the bank and organisations in Venezuela, Tunisia and Nigeria were also included. Correspondence between a member of the Federal Reserve Board and the unnamed banks revealed that one of the deals was already under scrutiny by the European Central Bank, and that federal investigators were also taking an interest. Yet anothe

If behavioral targeting is the key to providing Web users with advertising that's better tailored to their particular needs and interests--instead of banner ads that they ignore--then what's the harm to consumers? That was a central question tackled by a panel of privacy and online marketing experts Thursday at the OMMA Behavioral conference in New York. Whether online user tracking--even when anonymous--represents a growing threat to privacy has become a hotly debated issue in the last year, with FTC, Congress and state governments considering increased regulation of behavioral targeting. For Jules Polonetsky, co-chair and director of the AT&T-funded think tank Future of Privacy Forum, that debate has become almost superfluous. Whatever side one takes, he emphasized that there is now a widespread perception among consumers and regulators that online tracking is creepy at the very least. The key to diffusing the controversy is for publishers and marketers to give Web users notice that their behavior is being tracked in order to provide them with more relevant content, recommendations and marketing offers.

Google will unveil new privacy measures today that will give consumers more control over behavioral targeting. Now, when Google serves banner ads on outside publishers' sites, the ads will include links that provide more information explaining why they were served. Clicking through will lead to details about the company's behavioral advertising program, which categorizes consumers as interested in particular types of goods or services based on the sites they visited. The program is only in beta for now, but once Google signs up publishers, consumers will be able to view the categories they have been placed in--such as "interested in travel"--and also tell Google to remove them from whatever buckets they wish. Consumers also will be able to opt out of the program permanently via a browser plug-in. Or, if people want to receive ads for certain types of products, they can edit their profiles to reflect that--in effect, opting in to particular types of ads. Google's new measures come at a time when online behavioral targeting is facing increased scrutiny. Last month, two Federal Trade Commissioners warned that the online advertising industry could face new laws if it didn't take steps to self-regulate on privacy issues. Recently, Google rival Yahoo announced enhancements to its privacy policies. Among other changes, Yahoo said it would allow consumers to opt out of behavioral targeting on its own site. Google's move drew praise from the Interactive Advertising Bureau's Mike Zaneis, vice president for public policy. "It's really a consumer empowerment tool, which is great," he said. "It's one more example of how industry is competing on the privacy issue, to the benefit of consumers--and also to the benefit of businesses."

A recent talk by some Federal Trade Commission officials confirms that the agency is taking a hard look at online advertising practices. Speaking at an American Bar Association conference, new consumer protection chief David Vladeck had harsh words for the behavioral targeting industry's current privacy practices. The "current approach is not working," he said, according to the law firm Arnold & Porter, which blogged about the speech. Vladeck reportedly said many companies' current practice of notifying users about online ad targeting and allowing them to opt out is inadequate, largely because people don't understand the policies. He's not the first to make this observation. Advocates and policymakers have said for years that privacy policies are incomprehensible even to sophisticated users. A recent study by UC Berkeley School also shows that the policies are filled with enough loopholes as to be meaningless. Meanwhile, consumer protection deputy Eileen Harrington, who also talked at the same event, reportedly called deep packet inspection the most dangerous form of data collection, according to a blog post by the law firm Perkins Coie.

"The Network Advertising Initiative will unveil a new tool on Thursday that allows people who want to avoid behavioral targeting to permanently preserve their opt-out cookies. Currently, Web users who don't want to receive targeted ads can opt out via cookies. But those cookies have notoriously short lives -- often because users who want to avoid tracking frequently delete all of their cookies, including the opt-out cookies. Once the opt-out cookies disappear, behavioral targeting companies revert to tracking users and serving them targeted ads. "

"For more than a decade, Web companies have said that behavioral targeting, or tracking people anonymously as they navigate around the Internet and then serving them targeted ads, doesn't harm users. On the contrary, they argue, such targeting benefits people by providing them with more relevant messages, and also lets marketers spend their ad dollars more efficiently. When privacy advocates complain about behavioral targeting techniques, industry executives tend to respond by condemning the critics as ivory-tower elitists. But new research is increasingly casting doubt on the idea that the average consumer doesn't care about behavioral targeting. "