Posted on 22. Mar, 2006 in Online Advertising
Follow the moneyBy John Leyden
Large corporations and dot.com firms are funding the distribution of software that loads invasive pop-up ads with their advertising dollars, according to a report by the Centre for Democracy and Technology.
The US consumer rights organisation named and shamed a number of firms over the practice, including Club Med Americas, uBid, PeoplePC and GreetingCards.com. It is calling on mainstream firms to become more vigilant about policing their advertising practices.
In its report Following the Money: How Advertising Dollars Encourage Nuisance and Harmful Adware and What Can be Done to Reverse the Trend, CDT explains how the adware works through a complicated series of middlemen to persuade advertisers to pay for ads generated by unwanted advertising software or “adware”.
In most instances, surfers unintentionally install adware after visiting maliciously constructed websites or responding to online solicitations. The CDT report (PDF) documents the financial relationship between one unscrupulous adware distributor and mainstream firms.
“Knowingly or not, these companies are fueling the spread of unwanted programs that clog people’s computers, threaten privacy, and tarnish the internet experience for millions,” CDT deputy director Ari Schwartz said. “Because the adware financing model is willfully convoluted, many companies may not know where their advertising dollars are ending up. We’re urging those advertisers to be more vigilant to ensure that they aren’t unwittingly bankrolling one of the internet’s fastest-growing problems.”
Several organisations, including the Interactive Travel Services Association, Dell and Verizon, have established policies that prohibit or discourage the use of nuisance or harmful adware in serving ads. CDT wants to see these policies adopted by other advertisers. It also wants corporates to monitor the advertising practices of their marketing affiliates.
Earlier this year, CDT filed a complaint with the Federal Trade Commission alleging that 180solutions, engaged in a “pattern of unfair and deceptive trade practices”. In its latest report, CDT looked at firms that advertised through 180solutions, and enquired about why their marketing messages were been propagated using 180solutions’ advertising software.
Two of the firms identified responded to CDT’s requests by establishing ad placement policies, and five more said they already had policies in place. Eleven others – Altrec, Club Med Americas, GreetingCards.com, LetsTalk.com, NetZero, PeoplePC, PerfectMatch, ProFlowers, True.com, uBid and Waterfront Media – failed to respond to CDT’s request for information about their ad placement policies. CDT said firms that support nuisance or harmful adware with their advertising dollars deserve increased scrutiny.
“The time is now for companies to take a more active role in policing their own online advertising activity,” CDT deputy director Schwartz said. “Although unscrupulous adware companies bear the greatest blame for the spread of the unwanted programs, those programs wouldn’t exist without advertising dollars to fund them. We need to cut that revenue stream off at the source.”
180Solutions rejects CDT’s criticism over its business practices. “We object to the overall premise that consumers are duped into installing our software,” 180Solutions chief executive Keith Smith told The Washington Post. “It’s no different from what’s on television. People are paying for this content by agreeing to some ads.”