Call it the arrival of the Cookies 2.0.

A small U.S.-based firm is quietly testing its behavioural advertising technology with a number of Canadian Internet service providers that some industry observers say could create an outcry over consumer privacy concerns and reshape digital marketing strategies.

In an interview, NebuAd cofounder and chief executive Bob Dykes confirmed his company is testing its hardware with a number of undisclosed Canadian Internet service providers and has launched a sales team in Canada to locate more business.

"We simply map what people are interested in and then sell advertising which is more relevant to their person than previously could be done," Mr. Dykes said. "It's very similar to other behavioural targeted ad networks but has a greater capability to make better connections."

Similarly to how "cookies" -- a list of addresses of recently viewed Web pages-- are embedded within Web sites to record users online traffic, NebuAd's service to ISP's offers marketers a more sophisticated view of users' online activities.

It uses so-called "deep packet inspection."

By installing hardware directly onto ISP networks, Mr. Dykes said NebuAd is able to effectively monitor Web traffic in greater detail and deliver ads based on those behaviours, much more effectively than traditional search-based online advertising pioneered by Web giants Google Inc. and Microsoft Corp.

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