Internet Service Providers To Compete With Web Giants For Ads

Google (GOOG), Yahoo! (YHOO), and AOL have spent billions of dollars to buy software firms which target ads based on consumer behavior. They look at which websites people visit and what they do there. Social networks like Facebook also look at the behavior of their members to target marketing messages. As a matter of fact, Facebook has been attacked for its targeting program.

Now internet service providers like CenturyTel (CTL) are using data which they can collect to set up ad systems of their own. The advantage that the ISPs have is they know the names, addresses, and phone numbers of their subscribers, giving them a big advantage over websites.

The privacy police are out in force because they believe that the level of data an ISP can use is equivalent to sitting in someone’s house and watching their behavior for a good part of the day. The Wall Street Journal writes "Some of these [Internet equipment] guys are traveling in dangerous territory," says Emily Riley, an advertising analyst with Jupiter Research. "Should one company have all of that data in one place? It’s a little troubling."

On paper, the ISP targeting data is better than what Google or Yahoo! can field because it includes specific user information which cannot be gathered based on web surfing statistics alone. That means the investments made in their new targeting software by the big portals could be undermined by a better system.

Of course, all of this only works if marketer know more and more about what consumers do.

Spying for money. Good business.

Douglas A. McIntyre