Good news day for companies offering mobile advertising services, like the newly-launched exchange marketplace from Adfonic. Mediapost writes that the advertising on mobiles could reach $28.8 billion within 5 years. The report published by Ineum Consulting states that mobile advertising will grow at an annual rate of 45%, reaching $28.8 billion in five years, up from $3.1 billion today. The location-based targeting should also attract marketing budget from small businesses – not normally part of the mainstream media buy.

Bad news day for behavioural targeting firms, as Phorm loses more ISP customers. The Times Online reports that Carphone Warehouse and BT are the latest Internet providers to stop using its service. Phorm has been fighting against a lot of negative publicity in the British press, and it seems to be scaring away the big ISPs who are fearful of being embroiled in any privacy issue scandal:

BT, Virgin Media and Carphone Warehouse’s TalkTalk had all signed up as partners in the service. Last year, however, Phorm came under fire when it emerged that BT had been conducting secret trials of its technology on 36,000 of its broadband customers. Privacy groups said that the system was intrusive and even Sir Tim Berners-Lee, creator of the World Wide Web, condemned it: “I feel it is very important that my internet service provider supplies internet to my house like the water company supplies water to my house — connectivity with no strings attached,” he said.

Phorm insists that users are stored as a “unique random number” rather than a name, that it does not gather personally identifiable information and it does not store IP addresses. It said yesterday that its British ambitions remained intact.

It’ll be interesting to see how the privacy issue affects other companies in the BT space. Standby for lots of hysteria in the press about user data.