Yesterday BT Group was the latest to distance itself from the Phorm behavioral targeting advertising technology for broadband and cable television. Phorm has gotten into a bad spat with Tim Berners-Lee and policymakers over its use of consumer data for targeting ads.

This is a bad development but comes on the heels of many other concerns over privacy. The ad business is—and always has been—about matching advertisers with consumers who might be interested in buying a product. That’s why we have niche magazines like Cape Cod Bride and daytime soaps. Behavioral targeting as I discuss in The Online Advertising Industry: Economics, Evolution, and Privacy helps consumers get relevant information while avoiding seeing irrelevant stuff, and helps advertisers find the right consumers for less money.

Unfortunately, various players in the online advertising industry have given targeting a bad name by invading people’s privacy without permission and engaging in other bad behaviors. They have shot the industry in the foot for sure—the bigger question is whether they’ve shot it in the head. The online advertising industry really needs to get this back on track—otherwise we’ll lose much of the technological promise of the online ad industry.

What should the industry do? I will give my thoughts in future posts.