The next Big Thing in online marketing communications is so-called behavioral targeting.
The idea is that by building up a record of what content an individual looks at as they surf the web, advertisers can develop an understanding of what things that person would be most interested in buying.
Armed with this information, advertisers can then target that person with highly relevant advertising, no matter where on the web that person happens to be.
Why does this matter?
For the consumer, it promises to fundamentally change how they experience online advertising by only exposing them to ads which are relevant to their needs.
For advertisers, the benefit is that they only pay to reach people with an interest in their wares.
In other words, the benefits for both parties are huge.
However, things start getting tricky when it comes to implementing a behavioral targeting system.
In particular, if implemented without the consent of individual users, it poses a serious threat to individual privacy.
To understand this, one must understand how behavioral targeting is deployed.
Firstly, a given ISP must decide to set up a behavioral targeting system in order for its customers to be targeted.
This involves capturing the web browsing history of all its customers and then passing this data to a behavioral targeting partner like Phorm or NebuAd.
Working on behalf of advertisers, this partner takes responsibility for serving the highly targeted ads to each of the ISP's customers.
For its troubles, the ISP gets a share of the advertising revenues.
Unfortunately, behavioral targeting's reputation has been tarnished recently by a number of ISPs - including BT - which have trialed the technology without fully informing their customers.
Not surprisingly, this approach has led to a great deal of upset amongst web users.
Given the enormous benefits that behavioral targeting offers to both users and advertisers, the way out of this mess is simple.
ISPs must only apply it to customers who have opted in having fully understood how it works.
Once that safeguard is in place, behavioral targeting will have a bright future indeed.
For more information, don't miss an excellent introductory article in the New York Times along with another in this week's Economist.