The ultimate way to work out what someone is interested in would be to intercept his web-browsing traffic and search it for keywords. And that is exactly what companies such as Phorm and NebuAd enable internet-service providers (ISPs) to do (see Technology Quarterly). Equipment in the ISP's network scans passing web pages for keywords that are then used to target ads. The ISP then gets a cut when someone clicks on an ad, which is why ISPs are so keen on the technology.Until now, Internet ads involved a content site partnering an ad serving technology company. They planted a cookie in a customer's computer and delivered ads to the user depending on the country/state/town of the customer, day of the week, hour of the day etc.
Ad technology companies like Doubleclick (Now owned by Google) provide services to several content sites. In a way, this allows Doubleclick to track the web usage behaviour of the clients, albeit, only partially.
Now, the new proposal tries to target a user's behaviour completely, by bringing in the ISPs. Until now, the ISPs made no money from the Internet advertising. The money stayed with the content sites and the ad serving companies. ISPs will certainly like the proposal from Phorm and NebuAd.
Personally, I don't feel this is a major violation of customer's privacy data. Customers have agreed to view ads in content pages. How these ads are customised shouldn't get them worked up too much.
As for myself, I use Adblock in Firefox and filter out all the ads from the sites that I visit regularly.