Telephore - advertiser's dream or privacy nightmare?

1st April 2008

Advertising is all around us, on the web, in print, on hoardings and even on SMS text messages. The industry is worth billions worldwide, so it's logical to assume that anyone who can open up a new market stands to make a great deal of money.

Hoping to find a gap in the market is Telephore, a recent startup company with ambitious plans to place advertising within phone calls. Telephore calls these voice ads, and they play during your phone call to all the parties involved. And Telephore's partnerships with major cellular carriers mean that this technology could be coming to your phone soon.. whether you want it or not.

These advertisements are not just random - they are context sensitive. Most web users will be familiar with this type of advertising (Mobile Gazette uses it, for example), but this is a relatively trivial technology. What Telephore can do is analyse the content of your voice calls by using a highly sophisticated voice recognition system. These calls are then analysed and stored, and a database of the caller's interests are compiled. Ads are then generated to meet the subscriber's preferences, and these are played back in call at a later date.

Telephore says that the exact technology that they use is secret, but an insider from the company has given us an overview of the way it works (pictured left - click for a larger image).

Calls are intercepted from within the carrier network (so the carrier itself must be involved), and are then processed through a complex system which eventually leads to "network reinjection" where the ads are played back within the call.

Telephore are very pleased with this advertising technique, and they hope that their upcoming partnerships with several large carriers will lead to a substantial amount of revenue.

According to Telephore's marketing department, the ads are unobtrusive and actually aid in the flow of conversation, see the example below.

Almost inevitably, various individuals and campaign groups have come out against the Telephore system. One criticism is a simple on - why should subscribers get ads in any case? Telephore claims that the ads are a benefit to users as they actively target the needs and interest of individuals.. and therefore the voice ads are something that people will actually want.

Other critics say that the privacy implications have not fully been considered. In particular, the way that Telephore will play ads based on past conversations to other people you are speaking to is a serious issue. For example, if you call your doctor about an erectile disfunction problem, then Telephore may well play back ads for Viagra during subsequent phone calls.

Telephore say that they have addressed this problem, partly through a comprehensive audit programme, but mostly by moving operations offshore when privacy laws are more relaxed. Telephore's press releases show that the company is confident that they are not doing anything wrong.

Somewhat disturbingly, their website alludes to partnerships with companies [providing treatment] for medical conditions, marital aids, pornography, gambling, alcohol and firearms as being particularly popular, which will be a worry for many people. The site also features a large number of scantily-clad women, which is surely rather gratuitous.

The rumour are that Telephore has scored contracts with several well-known mobile networks, so there is a good chance that you will get to experience this new form of contextual advertising sometime later this year.

Update: 1200BST 1/4/08 - we discover an even more sinister truth about Telephore.. read on..