Adware faces a serious image problem that it wants to handle ASAP. It’s hardly a point of disagreement that many of the companies that produce the software that serves pop-up ads have behaved badly in the past, bundling their software with applications such as toolbars and screensavers so that users don’t know what they’re downloading and have no meaningful way to eliminate them. Just ask New York Attorney General Eliot Spitzer. Last month his department got the former CEO of adware maker Intermix Media to pay $750,000 in penalties for folding ad-serving software into free Web games—without admitting any wrongdoing, of course.
But in the current climate, several of the biggest adware purveyors are claiming to have gotten religion and vowing to clean up their acts. They’re motivated in part by the stick of potential state and federal legislation against both spyware and adware; but they’re also being tempted by the carrot of increased online ad spending, some of it shifted from spending on offline media. While much of that will continue to flow to paid search ads, there should be a substantial windfall left for ads that target either specific Web page content or user behaviors—areas where adware’s technology will be useful.
Among adware vendors who’ve changed their business ways, New York-based WhenU stands out as one of the first converts. The company, which calls itself a “desktop advertising network”, hit some rough times in 2002 with a spate of lawsuits by companies like Wells Fargo, U-Haul and 1-800 Contacts intended to stop it from serving pop-up ads for competitors over their Web pages. In 2003, the company itself actually saw its Web site banned from the Google and Yahoo! indexes for trying to raise its search ranking through “cloaking”, a technique that uses hidden code to redirect searchers to a different page.
Today, WhenU is back on Google and Yahoo!; the lawsuits have either been dismissed or—in the 1-800 contacts case—had their initial adverse judgments reversed in WhenU’s favor; and the company is under a new CEO who has shaken up both the processes by which it sells its ads and the technology used to serve them up. Bill Day, appointed to the top executive post a little over a year ago, has also become an outspoken proponent for reform among the adware-sellers—maintaining that they need to make their products more transparent and less intrusive to users.
Day thinks more anti-spyware vendors will learn to look beyond their early positions that lumped adware together with truly threatening spyware to see that the desktop ad business can be conducted in a way that does no lasting harm to consumers and even does some good.
“The anti-spyware vendors, at least the very big ones, are themselves consumer-centered,” he says. “They can sometimes get extreme and sound almost anti-advertising, but they’re reacting to legitimate concerns and complaints by users. They’re reacted en masse to the adware guys, but now they’re coming on the realization that adware is not black or white but shades of gray. They’re beginning to see the difference between adware vendors who do business with a degree of thought and respect and others who are less discriminating.
“In the end, I think any of the anti-spyware guys who see the change in how we do business are going to end up in a positive space.”