Need to Know: Phorm

Phorm is struggling to keep ISPs on side in the UK - but what's all the fuss about?

If you haven't bothered to learn about Phorm until now, you're getting in at what could be the last chapter of the story in the UK, at least.

The UK-based firm has had a rough week. BT kicked things off on Monday by releasing a statement saying it had no plans to implement the controversial advertising system, despite multiple trials over the years - including two secret ones.

TalkTalk then jumped on the bandwagon and ended its contract with the firm, leaving many to wonder if Phorm is now dead in the water.

What exactly is Phorm?

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Phorm is a behavioural advertising firm. That's not so special; there are many of those even Google uses behavioural advertising. But where most other such firms use cookies or other browser-based techniques to find out what you like in order to target ads, Phorm scans your web movements at network level, using deep packet inspection.

This means their computers see everything that you look at on the internet; anything you send or receive over the network goes through their servers. They use this information to create a profile about you, and use that profile to decide which ads to display.

Why is this different to standard advertising?

When you go to a website such as, say, IT PRO the advertisements are usually targeted to the content on the page. So a tech site will display tech-related ads. Google does this with its ads by reading the content of the page, so it can decide what's on the page to show related text ads. The thinking is that if you're reading about tech, presumably you might buy tech stuff.

Phorm looked to do something different. Consider a newspaper. What advertising can you display next to a story about a car bomb in Iraq? Aside from the fact that scanning the page content won't give you many choices auto sales? there's no reason to think anyone reading the story would necessarily be interested in such ads.

Phorm claimed its system would let media companies show advertising unrelated to the page's content - but rather than just show random ads and hope to get lucky, it would know the sorts of things you were interested in.

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So if you'd been shopping for a flight to Amsterdam lately, you might see flight ads. Or if you'd been looking for a new camera, you'd see camera ads even if the page had nothing to do with travel or photography.

How does it know what people like?

Phorm's system is called Webwise. If an ISP implemented it - or trialled it, like BT did - then any page an internet user on their network goes to is rerouted through Phorm's system.

So if you went to IT PRO, the request would travel over the network and be intercepted by Webwise. It would check if you were opted out, and if not, would look at the information you were requesting - adding those details to your profile. Then you would carry on to the website you originally requested.

When you ended up at a site which used Phorm advertising, that profile would come into play. After going to IT PRO for example, Phorm and its advertising partners would know you were the techie sort, so you might start seeing more IT-themed ads.

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