Jun 8, 2012

IPv6 upgrade could prove a boon for ad networks

The Internet quietly underwent a seismic change this week, with many websites shifting from IPv4 to IPv6, an updated standard that increases the total number of possible Web addresses exponentially. That's a big deal for advertising networks, writes Peter Pachal, since it makes it possible for individual networked devices to have their own IP addresses, making device-level tracking far easier to orchestrate. Here is the article from Mashable:

For everyday users, yesterday’s big shift in Internet addresses — from the IPv4 to IPv6 — will go unnoticed. To anyone doing business on the Web, though, it’s of extreme interest, and there’s one group who may benefit from the re-organization more than others: advertising networks.

First, a little background: Since its inception, the Internet has been based on an system called IPv4. This is how IP addresses get distributed — those numbers in your device’s network preferences that usually look like “″ — and determine how machines talk to each other.

However, IPv4 only allows for about 4 billion total addresses, and the supply has been completely used up. That’s why the Internet today finally officially opened the doors on IPv6, a newer standard that provides more than 340 trillion, trillion, trillion addresses — so many that we’ll (probably) never run out. Many Internet Service Providers (ISPs) and major sites (like Google) have already begun to switch.

Beyond the mere benefit of keeping with the times, Google may have another good reason to support the change to IPv6: It has direct benefits to digital advertising, says Bob Hinden, chair of the Internet Engineering Task Force (IETF) and one of the architects of IPv6 along with Steve Deering.

Here’s why: The 4 billion or so addresses in IPv4 aren’t nearly enough for even the number of connected devices in the world today. But they don’t have to serve every single one, since network address translators (NATs) can distribute “private” addresses to devices on a local network. It’s analogous to an apartment building — each unit has the same street address, but their numbers are different.

Those NATs are how your printer, laptop and tablet can all connect to the Internet via your home router through the same address. The same tech is at play in other parts of the network, at a larger scale. Network operators like AT&T and Comcast sometimes have bigger NATs, distributing addresses to large areas.

SEE ALSO: IPv4 & IPv6: A Short Guide

However, every time there’s another layer of these private addresses it gets harder to tell who or what is on the other end of a connection — a real problem if your business model depends on that information, the very lifeblood of digital advertising.

“If all they’re seeing is the address of this big carrier-grade NAT in the middle of some network, they lose the ability to see who’s viewing those ads,” Hinden told Mashable. “That has a big effect on their current business model. They see [IPv6] as being very important to them for that reason.”

Today, networks can use many alternatives to direct IP addressing if they want to find out information about their users. Using cookies, detecting device IDs, and looking at which ports are being accessed are all possible tools.

“[Networks] can tell who’s connecting to some degree already,” says Hinden. “But when that information looks the same for a whole city, their ability to know more about the user is compromised.”

With IPv6, determining a precise IP address becomes a much simpler task due to the system’s “end to end” nature, Hinden says. Since the number of IPv6 addresses is nearly limitless, private addresses become unnecessary, and those unwieldy NATs should eventually disappear.

That opens up another potential benefit of the switch to IPv6: a faster Internet. As use of network translators decreases, there should be fewer delays in web traffic.

“You won’t have as many boxes in the middle that are trying to do things to traffic,” Hinden says. “There are two things that a router can do when it gets a packet — it can either forward the packet to the next stop, or it can think about doing that. Thinking about doing that adds delay.”