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AdWare – Controversial Contextual Advertising

Adware and “contextual targeting” were some of the hottest buzzwords of 2003 and are destined to continue to thrive and reinvent themselves through the rest of 2004. Contextual targeting can be anything from syndicated search engine pay-per-click buys on editorial-related web sites to delivery of ads by way of software, typically downloaded by a user but sometimes surreptiously bundled in with another download – known as AdWare (and in some cases such software that tracks user behavior has been deemed Spyware).

This AdWare software have also earned the disreputable name of “scumware” or “theftware” because their ad serving tactics woo visitors away from one publisher’s site and over to another’s, hence taking with them the ad dollars the publisher might have otherwise earned.

What Exactly Is AdWare? (er, ah…Contextual Targeting Tools??)

As with most things in life, there are two sides to every story and these adware packages have brewed up quite a bit of controversy. Ask a web publisher and, if they can say it in a nice way without cursing while they do, they’ll tell you that scumware are browser-embedded applications which serves *unwanted* advertising overlaid on their site, thereby defacing the site while worse yet, possibly diverting the user away.

Now, ask an advertiser employing these contextual targeting tools and you’ll get a very different answer. By using contextual targeting tools, an advertiser can run a campaign which places advertisements on, over, or *IN* a relevant or competitor’s site. The ad is served by the browser-based application with offerings ranging from simple pop-ups to in-browser ads to the highlighting of site content indicating links to advertisers with related content. By their very nature, these tools have been successful at driving highly targeted users to a site, in many cases yielding a profitable return on investment for the ad dollars spent.

These ads are also distributed when the user searches on a search engine or enters a search term into their IE Browser Navigational Window (where you type in URLs)

So who’s in the right?

Who Is AdWare?

Before you decide which side of the fence you fall on, it’s important to know who the players are and what controversies have surrounded them. Bear in mind that all these tools must be downloaded somehow by the user.

Claria’s Gator and GAIN Network

Claria/Gator’s initial attraction to Internet users was (and probably still is) the fact that its software fills in online forms in one easy click. In exchange for free use of this eWallet, Gator then introduced ads and the free user must now allow themselves to be subjected to these ads; if the user prefers not to see the ads, they can purchase the no-ad version for $30.

Gator’s advertisements consist of pop-ups, “fly-ins,” “sliders,” and in some cases images that appear over the banner ads purchased on sites. It calls its ad programs Gator Advertising and Information Network (GAIN).

According to Gator, its ad programs receive “response rates of 5% on average, with some campaigns as high as 48%. GAIN users are 100-400% more likely to convert than consumers who are not.” From the sounds of it, Gator delivers results.

eZula (TopText)

eZula TopText highlights words on sites and suggests definitions and information on such terms. Think of it as a browser-embedded dictionary. Not so evil.

On the other hand, what eZula also does is highlight words related to the advertisers working with eZula, creating a kind of misleading link. If an eZula TopText user clicks on one of these links, they are taken from the original site to the eZula advertiser’s site. Since eZula works on a CPC basis, these clicks earn revenue for eZula while stealing traffic and potential revenue from web site owners.

In the webmaster field, this practice is known as web site hijacking — having someone else alter the actual look and functionality of your web site without your permission


WhenU bundles with and installs itself through a variety of partner downloads including other software, MP3 players, screensavers, online games and shopping tools. It describes its contextual targeting solution as software examining “keywords, URLs and search terms currently in use on the consumer’s browser — without collecting or transmitting this data — and then select[ing and displaying] relevant and useful advertisements.”

WhenU works like Gator by suggesting advertising and offers on shopping sites like Amazon or eBay. Publishers have also accused WhenU of revenue stealing because WhenU ads are shown after an affiliate link to Amazon or another site has been clicked, which could potentially divert the user from the affiliate purchase which would in turn divert dollars earned from that purchase.

Court Battles Around AdWare

In a court case that may decide the future of online competitive and contextual advertising, last December U.S. District Judge Deborah A. Batts blocked WhenU from displaying Vision Direct’s ads over the website of 1-800 Contacts.

According to the ruling, which overturned two previous decisions, Judge Batts declared that WhenU users may not be able to differentiate the WhenU browser utility pop-up advertisements and those advertisements which would be generated from the targeted website.

Avi Naidern, CEO of WhenU, stated that “There have been two judges that have already ruled that there is no use of a competitor’s trademark when you target advertising this way. We’re confident the ruling will be overturned on appeal.”

The ruling may lay the groundwork for a larger Federal court appeal and perhaps even a US Supreme Court decision on the subject of browser embedded contextually targeted advertising. According to opposition of the practice, such advertising defaces commercial websites and steals their profits.

What are your thoughts on AdWare, Search, and Advertising on such tools? Please leave a comment:

SEJ STAFF Loren Baker Founder at Foundation Digital

Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing ...

AdWare – Controversial Contextual Advertising

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