As Phorm screws up – again – Feeva is in the rear view mirror

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It’s clear now that Phorm is slowly but surely deadpooling – and I don’t use that phrase lightly. It’s lost the battle to convince customers that its ‘deep packet inspection’ technology isn’t an invasion of privacy (whether it is or not is now almost irrelevant, that’s how it’s seen). It’s been exposed as having had dealings with the British government it previously denied. It’s launched a ham-fisted, aggressive blog (StopPhoulPlay, oh come on…) to argue its case, which bizarrely attacks potential customers. It’s – to use to that handy phrase – all over bar the shouting. Phorm is now irrevocably associated with controversy. So who and what comes after Phorm?

Because it’s as simple as this: The idea of tracking user behaviour is simply not going to go away, not matter how much “privacy campaigners” like Privacy International might rail against it. Ever since the first cookie embedded itself into a browser, Internet and media companies have been trying to figure out ways to increase revenues via greater ad targeting – and user tracking is a huge part of that.

So, in Phorm’s rear-view mirror is another company, Feeva. Word on the street is that some time ago – well before all the above happened – people from Phorm and people from Feeva met, trying to convince each other that each one was right on how to go about user tracking. Phorm, lead by Kent Ertugrul, was convinced it had the solution and duly launched. But Phorm’s plans to track BT users via a cookie has lead to scrutiny from European regulators and a wave of attacks from consumer activists. Likewise Silicon Valley-based NebuAd was sued in November in the US and is now liquidating its assets. Another, Adzilla, is also attracting law suits galore.

But Feeva has kept its powder dry. Did it decide to lie in wait until Phorm had taken all the heat? We’ll probably never know. What is clear is that Feeva proposes a radically different approach, which may well win out in the end. And it goes like this:

The San Francisco company targets Internet users with geographic and demographic precision. It does this by harvesting geographic and other information directly from ISPs – but, crucially, in a way that doesn’t identify individual users and in such as way as to put distancing between it and other players like Phorm.

Feeva merely obtains the user’s location down to zip/postcode as they request pages by placing tags on Web page requests (called HTTP header requests) as they pass through an Internet router. There is no software on the consumer’s device, no cookies or IP addresses obtained and no tracking of the user’s web surfing. Feeva doesn’t use IP addresses – as Phorm does – to obtain the postal code, but via its software sitting on the ISP’s router.

With information on the community that an Internet user lives in, and no information about the user or their web behavior, Feeva taps into the well-established method for ad targeting used by TV, Radio, Magazines, Classified Ads, direct mail marketers for years: postcodes.

Once Feeva has the user’s zip code (remember, not their exact location) it can match it with other information it knows about the users in that area code (average incomes, demographics, census data etc) and advertisers can use the identifying tag to send appropriate advertising – an ad for a BMW to a central London address, an add for a MacDonalds to a suburban one for instance.

How’s it going to do this? Well, remember that software on a router? It’s going to embed itself via a partnership with Internet router giant Cisco. (Back in February it quietly announced this: PDF). By partnering with Cisco the solution scales almost immediately in a huge way.

Make no mistake, they have done their home-work: Feeva has been working on this technology for *nine years*. CTO Jaz Bangacomes from the WiFi and cable industries. CEO Nitn Shah has worked at Cambridge/Bell Labs and the FCC. People like Richard Purcell, ex-Microsoft Chief Privacy Officer are advisors. Feeva is so far backed by angel money and then an undisclosed VC round in 2007.

Phorm isn’t doing that. It’s using cookies. Yes, Phorm says it does not identify individuals either, since it assigns a random number to the cookie’s browser, and then forgets the surfing history once the browser is tagged. The trouble is it’s still tracking that user on that browser, on that computer, not the much more general profiling information of people in that postcode. Thus Phorm keeps having to fight fires about it “spying” on users, while Feeva simply says it’s just like any other long-existing marketing company, targeting on postcode. It’s slightly crazy that no-one has thought of this before, in relation to ISPs I mean.

Ad agencies pay Feeva to access the tags it produces (60-100 with categories) and Feeva distributes a share of the revenues backs to the ISPs it works with. QED. Plus, this is a completely new revenue stream for the ISP, remember, which doesn’t get them into the kind of hot water with their users that an association with Phorm does.

Feeva’s main route to market may be slower – it has to work with ad networks like DoubleClick to access and educate advertising agencies – but its unlikely to draw the kind of firestorm Phorm has. And of course, it can do that same kind of thing on the mobile web, especially with better handsets like the iPhone, which has a decent browser which is location aware.

So, while Phorm is pummeled daily by the press and activists, I would expect Feeva to be announcing deals with Ad agencies and ISPs fairly soon and attracting a great deal less controversy with it.

  • http://none joe malley

    Mike:

    Interesting story, until you noted: “Feeva merely obtains the user’s location down to zip/postcode as they request pages by placing tags on Web page requests (called HTTP header requests) as they pass through an Internet router”. We need a bit more description of the dpi activity, and the “INTERNET ROUTER”. let’s just say you need more analysis of these issues, or let’s say a little more, “tech crunch”, on this one.

    Once again you lost me when I read this section:
    “It does this by harvesting geographic and other information directly from ISPs – but, crucially, in a way that doesn’t identify individual users”. What is the ” OTHER INFORMATION” harvested, and why would the isp not know the ip user’s zip code, thus limiting all the bother to go to this extreme?

    Let me try to help you with your research, list out all the isps that have tested this system, cities tested and dates. I will then be pleased to help you with your research.

    joe malley

    ps: So as not to mislead anyone, yes I am one of the class counsel on the nebuad and adzilla case. Anyone wanting to contact me, in confidence, to discuss any issues related to isp-dpi-oba, feel free to contact me at: malleylaw@gmail.com

  • http://tradejim.com/phorm-controversy-sparks-up-again/ Trade Jim News » Phorm controversy sparks up again

    […] accusations. Unfortunately, it may just serve to fan the flames. Mike Butcher of TechCrunch is now calling the death of Phorm, saying that it will be hard for the company to ever escape the stench of […]

  • Zoot Cadillac

    The San Francisco company targets Internet users with geographic and demographic precision. It does this by harvesting geographic and other information directly from ISPs – but, crucially, in a way that doesn’t identify individual users and in such as way as to put distancing between it and other players like Phorm.

    Does not identify individual users? I’m afraid that in the UK, with my postcode you have the means to identify every person living in my house along with those of my near neighbours with a cursory check of the electoral roll.

    I’m afraid Feeva will be met with the same short shrift as Phorm whenever they rear their ugly head.

    • David

      Feeva appears to have developed an intelligent non-invasive method of delivering targeted audiences to advertisers. Identifying you does not appear to be their goal, they would seem to be after identifying your neighborhood demographics.

      Advertising is not going away. If we have to have advertising it would seem to make sense to have it targeted to one’s demographics if it can be done without affecting our privacy.

      Do they not market by postal code in the UK?

  • PointOfOrder

    It should be noted that the documents referred to by Baroness Miller and certain other people, which reference conversations involving the Home Office were posted here: https://www.dephormation.org.uk/index.php?page=12 last year. This is rather an old story and one that is being spun out of all proportions. One has to ask why now when the anti-Phorm lobby have been in receipt of this information for nearly a year?

  • http://blogs.bluegumtree.co.uk/vista/2009/04/28/82 Vista » Blog Archive » Ph off

    […] for  the anti-anti-Phorm website they launched today.  Unfortunately, it’s not been as well received as Phorm might have hoped and may now even be something they’d prefer to be shoving […]

  • http://www.strategiclists.com James C. Ingram

    I think feeva should be commended on it’s awareness of the issues. Sure, they can wait to see which way the wind is blowing on certain legalese but marketing to people by zipcode is a very effective campaign technique, such as a direct mail list.

  • samd

    so people will stop buying cisco routers …ehh

  • http://none joe malley

    James:

    Your name seems familiar, but I can’t recall where I have seen you post before:however , “HOWDY FROM TEXAS”. Let’s discuss a separate issue about your interest in these matters, and tell us more about your company:
    http://www.strategiclists.com
    “Strategic List Services is a list brokerage representing over 54,000 databases worldwide.”

    James C. Ingram,
    VP Marketing

    “Marketing offline and online requires my skills in areas of copy writing, SEO, web site maintenance, email marketing, telemarketing, and direct mail marketing. I will be happy to assist your business and marketing goals in 2009. ”

    Tell me more about information databases. Let’s say that I wanted to obtain driver licenses or registration information of individuals in , let’s say, the state of washington, USA. How can a website online obtain such information for resale? Company “A” purchases the information from the state of washington DPS. We then see online websites that sell that information. How did the website company gain access to that information? Are there databases of USA driver license and car registration for sale? How does all that work ,and what companies would I need to contact to gain access to that info.

    appreciate any info, and feel free to email me, in confidence, at: malleylaw@gmail.com

    joe malley

    • http://www.strategiclists.com James Ingram

      Hi Joe,

      No, we cannot obtain drivers license or registration information for any person in the USA due to the Drivers Privacy Protection Act, otherwise known as the Shelby Amendment.

      List vendors compile their lists in various ways. In general, they start with the phone books, so every person that has a phone number is on a list. Then they overlay information on each person based on magazines they subscribe to, surveys they have filled out, etc.

      There are literally thousands of different variables that can go into a list. If you are looking for a custom marketing list, give us a call and we would be happy to discuss your project and explain how we can go about putting together a list for you.

      Getting back to the car list you mentioned, we can get lists of consumers who own certain types of cars, based on information they have provided (self reported).

      I hope this information has been helpful.

      Cheers,
      James Ingram

  • http://www.facebook.com/people/Kirk_Ketefian/613061227 Kirk Ketefian

    It is worth pointing out that none of the players in this space is/was dealing with personally identifiable information (PII). The IP address isn’t technically PII since it is generally not unique to a subscriber. However, it seems that the general tone of the recent conversation in the privacy realm, at least in the US, seems to be leaning towards considering IP addresses as PII.

    As for Feeva, it’s been very smart of them to keep flying under the radar all this time. Let the others take the heat and allow the privacy conversation to take place without being tainted. They have also taken a much more benign approach to ISP-based ad targeting (i.e. not touching behavioral tracking and not tracking by IP address), which could be their saving grace.

    However, if this article is correct and Feeva is actually modifying packets in the network (by modifying HTTP header requests), they could still potentially find themselves in legal hot water. Fundamentally, what they are doing isn’t very different than what Phorm is doing — leveraging the ISP’s knowledge about the user to pass additional user data (non-PII) to the ad ecosystem by modifying packets in the network. In the United States, this may possibly violate the Electronic Communication Privacy Act (ECPA) and/or other privacy legislation unless it’s done via user consent.

    I think it’s inevitable that this whole industry will move to an “opt-in” model if it is going to succeed (much less survive). I’ve just written a bit more about this topic on my blog at http://kketefia.wordpress.com/2009/05/05/the-fate-of-the-isp-based-advertising-industry/.

  • Peter

    I wonder how Feeva’s business model will be viewed by Google, who are trying to drum up custom for their cloud computing concept (online Office suite). Anyone looking to collaborate on what may be quite private documents online could be put off completely by the thought that every access by anyone to those online materials would go through Feeva first, if the users’ ISP collaborates with Feeva or their ilk.

    Is the only solution for every email to be encrypted using PKE, and every HTTP access to be HTTPS from now on?

    Google is not above forgetting its principles when it suits the company (think about their collaboration with Chinese authorities over search terms put into the engine by Chinese users), but if they stand to lose revenue because of the work of outfits like Feeva, maybe they’ll exert some muscle and make it impossible for Feeva to operate…

  • J D

    Feeva et al now trying to justify these invasions by wearing the wrong clothing!

    WOLVES anyone!

    http://blogs.reuters.com/mediafile/2009/05/28/new-internet-ad-technique-can-warn-of-emergencies/

  • http://uk.techcrunch.com/2009/08/29/not-another-phorm-we-hope-struq-launches-behaviourally-targeted-ad-platform/ Not another Phorm, we hope: Struq launches behaviourally targeted ad platform

    […] on prior behavior but without, or so it claims, the privacy violations ascribed to the ill-fated Phorm. “Unlike Phorm,” CEO Sam Barnett told me back in June, “We don’t partner with ISPs […]

  • http://www.newsjacker.co.uk/media/not-another-phorm-we-hope-struq-launches-behaviourally-targeted-ad-platform/ Not another Phorm, we hope: Struq launches behaviourally targeted ad platform 

    […] on prior behavior but without, or so it claims, the privacy violations ascribed to the ill-fated Phorm. “Unlike Phorm,” CEO Sam Barnett told me back in June, “We don’t partner with ISPs […]

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    Does Fiva still exist ?

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