Charter Communications to Enhance its Bottom Line with Behavorial Targeting

Last week, Charter Communications sent out letters to a test group of its high-speed internet subscribers informing them of a new feature that will provide them an “enhanced online experience“. Sounds great, right?

The truth of the matter is that Charter will begin to monitor its customers’ surfing activity and use that information to inject targeted ads into the sites they visit. According to Charter, the feature, “…uses completely anonymous information and, based on your surfing and search activity on the Internet, it infers your interests in certain product or service categories, such as automobiles/sports cars, fashion/handbags, or travel/Europe, and so forth.”

Charter will not only be monitoring what sites you visit but also their content. This is made possible by using deep packet inspection (DPI) technology. DPI allows an ISP to look at the actual information contained in packets traveling to and from your computer. The nation’s largest internet provider, Comcast, was recently investigated by the FCC for using DPI to throttle P2P traffic coming from programs like BitTorrent. After an initial blanket denial they eventually admitted that they were in fact using DPI to block or otherwise disrupt file-sharing traffic.

Why would Charter decide to essentially spy on its customers for the purpose of injecting targeted ads? Simple, extra revenue. Charter’s stock price is down roughly 68% over the past year and they were nearly delisted from the NASDAQ for having shares priced lower than $1. There is no telling how much this new “feature” could mean to Charter’s bottom line if it were to expand to all 5.7 million of its customers. This isn’t the first time Charter has used ad delivery to squeeze more cash out of its subscribers. Earlier last year, Charter started to redirect “server not found” error messages your browser displays when you mistype a URL to their own page that shows ads and referral links.

Customers are able to opt-out of these “enhancements” by visiting a website that will place a cookie on the surfers’ computer that will prevent the ad injection. The problem with this is that if you ever decide to clear your cookies, use a different browser, or connect from another computer you will have to visit the site again to have it reapplied. This might seem like Charter cares about the customer and wants to provide them with an option but it is really a red herring. Opt-out cookies or not, Charter will still be using deep packet inspection to monitor all of your web traffic, email, p2p, instant messages, etc. I would like to think that this monitoring will only be used as part of their ad targeting efforts but if the actions of Comcast are any indication I would imagine there is more going on that hasn’t been made public.

If this new feature is so harmless and will actually “enhance” the online experience why doesn’t Charter make it opt-in? Surely customers would signup in droves to have their surfing monitored for the purpose of advertising! Sadly, according to Ted Schremp, Charter’s senior vice president for product management and strategy, “opt-out has become the norm for all targeting on the Internet.”

Perhaps this is the norm in the minds of some marketers but the general public is starting to take notice and object to these annoying practices.