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Phorm warned is fore-armed

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Contextual advertising company Phorm looks as if its recent deals with ISPs have caused a storm around consumer privacy concerns, potential increase in network latency for consumers and very little upside from a consumer point-of-view apart from a browser-based anti-phishing service called Webwise.

Phorm used to be adware company 121 Media. Consumers were not reassured by Phorm’s ISP partners, for instance BT is alleged to have run shadowy bucket tests of the Phorm service last summer. Phorm hasn’t answered the network latency issue (yet), but is principally relying on a report by Ernst & Young to reassure consumers.

My thoughts below:

  • Social media corp. comms 101 – if you are likely to have a crisis and have contingency planned for it (like having Ernst & Young reports on tap), then you should be really blogging well before you are knee-deep in the media merde, not starting when the coverage hits the fan ;-)
  • A professional services organisation like Ernst & Young is no guarantee of respectability: McKinsey did management consultancy at Enron and Arthur Andersen was an immensely respectable organisation who fell in flames when Enron imploded. Other accountancy firms like Grant Thornton had been associated with scandals such as Parmalat. Phorm would have been better off letting hackers and crypto fanatics loose on the system
  • Your privacy is an illusion anyway in the longer term. In order for ISPs to do traffic shaping and align themselves in their new role as the UK government’s content police they will be examining data at the application layer (OSI Layer 7) using tools like Narus software or TopLayer Networks appliances (these two companies have a customer base that includes various government departments and various intelligence agencies)

Unanswered questions

  • How does Phorm differ from the approach of web analytics firm Hitwise?
  • Webwise – what browsers will be supported and how good is this service compared to the anti-phishing solutions offered for free to consumers by the likes of MSN and Yahoo!?
  • How relevant to the consumer will the adverts be, how will Phorm have a better understanding of customer intent than say Google or Yahoo! to provide fewer, but more relevant adverts?
  • IF Phorm’s technology works as promised will this create a surplus of ad inventory driving the price of online advertising artificially lower?
  • Consumer search terms on Google or another search engine – who really owns that data? What are the legal and ethical issues about one advertising platform eavesdropping on the customer interaction with an advertising rival like that? Could this considered to be industrial espionage?

Disclosure: I used to work with David Sawday, Phorm’s director of corp. comms when we were both part of the Yahoo! Europe PR team.