Phorm … what’s the issue?

Our weekly columnist Raymond Snoddy wonders why Phorm, the “marketing Holy Grail”, is being drummed out of town on privacy issues, when “half the population is voluntarily surrendering any conventional idea of privacy on a succession of social networking sites”…

A first acquaintance with Phorm, the online advertising group, would leave most people very impressed indeed. After all, here is the closest you are likely to get to the marketing Holy Grail – precisely targeted advertising for the first time. A system that reacts in real time to actual consumer behaviour so that you are only offered ads that are likely to be of interest. Book a ticket for a tennis tournament online and by definition you are interested in tennis, so great deals on tennis, balls, racquets, trainers etc will pop up immediately. Bingo! Physically active consumers are happy not to be offered ads for zimmer frames and marketeers are ecstatic because at long last the pistol has replaced the blunderbuss.

But isn’t there a privacy problem?

Absolutely not, explain the Phorm top brass. If anything, it’s the exact opposite. The likes of Google hold vast amounts of information about online consumers in their databases. Phorm holds none. Instead consumers and their interests are matched with advertisers in continuously renewed streams of information, which leave no permanent trace. Ask further and Phorm will enthusiastically offer to prove that their technology cannot amass permanent commercial profiles of the individual.

What about the perception that privacy is being invaded at the speed of light?

Phorm may find that problem rather more difficult to deal with, whether it is a strictly rational fear or not. It is not even totally clear what the issue is. Do consumers distrust what the company is saying and believe that the personal information will all be stored in some secret database somewhere whatever the storyline? Or more likely is there simply a deep residual fear of Big Brother in the Orwellian sense, a shying away from anyone knowing too much about us – rather like the visceral opposition in the UK to identity cards even though they are commonplace elsewhere.

Eighteen months ago Phorm looked as if it had the world at its feet. Three major players – BT, Virgin Media and Carphone Warehouse’s TalkTalk broadband service – were all lined up for trials. Formal launches would surely happen within the year. All have now clearly got cold feet in the face of opposition from consumer groups and no less a figure than the inventor of the world wide web, Sir Tim Berners Lee. There are different degrees of enthusiasm and varying levels of honesty in the explanations but they all add up to the conclusion that nothing much is going to be happening anytime soon.

BT says it wants to focus on super-fast broadband and online television and has no “imminent plans” to launch Phorm’s Webwise service. TalkTalk announced that this was not the right time “from a commercial or operational viewpoint to work with Phorm”. Virgin Media claims to be still interested, it’s just that the company has not managed to perform trials of Phorm technology yet. Quite.

It is difficult to see how Phorm can now launch in the UK and perhaps it should concentrate its efforts on other countries, which do not have such an ambivalent and complex relationship with the concept of privacy. And yet at the same time as Phorm is effectively being drummed out of town on the privacy question, half the population is voluntarily surrendering any conventional idea of privacy on a succession of social networking sites. Without a moment’s qualm, personal images, predilections, present activity and current location are all being offered up to half the world.

What do you do about people who complain pitifully about breaches of commercial privacy as in Phorm, but who insist on shattering their own privacy day in day out?

Sometimes this can cause intense personal irritation. There was recently a family barbeque in the household that went admittedly somewhat awry. Still bloody annoying to find out that the second born had denounced the slowness of the BBQ, the unfortunate attempt to revive coals with white spirit and provided a greatly exaggerated account of getting lucky in a chess game all in real time on Twitter. No-one consulted on invasion of my privacy. “Thought you’d never notice,” trilled the young sprog when confronted.

The lessons though are clear. There is all the difference in the world between the extent to which the young – in most cases ill-advisedly – decide to expose themselves to their peers and often potential employers and university admissions tutors, and commercial activities that dare to enter the private space uninvited.

We have already seen the difficulties of introducing even routine advertising into what is seen as the “personal” space of Facebook, Bebo or MySpace. In such a context the activities of Phorm seem to be a step too far. Or rather the perception of Phorm’s activities appears to be a step too far and in this place perception is everything.

The advice for marketeers moving towards highly targeted behavioural advertising has to be move with caution and extreme sensitivity. Or else.