Ofcom supports Phorm

Ed Richards, chief executive of Ofcom, has approved controversial advertising technology from companies such as Phorm as a way for broadband providers to fund investment in new superfast networks, the Financial Times says.

Behavioural targeting uses consumers' browsing data to show them more relevant advertising. Phorm and similar companies such as US-based Nebuad plan to use targeting to generate advertising revenues for internet service providers. Broadcasters and other online publishers also use variants of the model.

"In our view the underlying idea that ISPs can enable delivery of behavioural targeted advertising has much potential," said Richards, "if done sensibly and done correctly, transparently to the user and with the consent of the user."

At the annual conference of Isba, the advertisers' association, in London, Richards said that such new forms of advertising could pay for digital content creation "and in turn fund the cost of investment of those high speed [broadband] networks we also want to see deployed".

The Internet Advertising Bureau has just released its own "good practice principles" for behavioural targeting.

Google, Microsoft, AOL and Yahoo, as well as Phorm - have signed up to the guidelines, which pledge to give notice to consumers when such technology is being used and educate them about how to opt out of it.

Consumer groups are not convinced and the European Commission has written to the government expressing its concern about data protection and is still investigating - see today's Opinion piece.