Adware under the microscope
Published: 28 Jun 2002 16:08 BST
One of the earliest and most popular adware companies is Gator, of Redwood City, California, which offers an "eWallet" service to store financial data and purchase preferences on individuals' hard drives. Roughly 9 million people have subscribed to its free, ad-supported service, which fills in their credit card numbers and other information each time they purchase items online. Gator software was automatically installed on the hard drives of another 9 million people when they downloaded other programs bundled with it.
In exchange for eWallet, Gator solicits voluntary demographic information and funnels people into thousands of consumer categories, such as affluent travelers or new mothers. It also classifies hundreds of thousands of Web sites and monitors visitors' browsing habits to determine so-called psychographic categories such as beauty-conscious women (who frequent makeup and fashion sites), would-be sport-utility vehicle purchasers (who go to truck sites for specifications and prices), or people who trade stocks and bank online.
The ability to target specific groups while people shop online makes its advertising much more effective than blanket banner ads, said Gator Chief Marketing Officer Scott Eagle. For instance, a recent Gator campaign for an international, high-end cosmetics company identified people who met three standards: They were mothers, they considered themselves beauty conscious, and they were affluent. Click-through rates averaged 24 percent, compared with the industry average of roughly 0.2 percent for general pop-up ads and roughly 0.01 percent for banners.
"Someone who's about to become a new parent would find information about diaper [nappy] rash or nurturing an infant as blurring the line between an advertisement and information," Eagle said, noting that in such cases the pop-up ad could include a coupon for nappies or baby clothes. "Same thing if I buy a car or am researching cars online and someone offers me insurance purchase information at the right price and at the right time. It's value-added."
Some direct-to-consumer retailers that use adware say the format works, but they are unwilling to provide specifics.
Jeff Denenholz, director of public relations for X10 Wireless Technology of Washington, says the company serves millions of pop-up ads per month for its surveillance and entertainment cameras. X10 estimates that it is the largest online advertiser, though the private company refuses to provide specific numbers about how many ads it serves, the number of items it has sold as a result of the ads, and how much the advertising costs.
Denenholz also concedes that X10 has received complaints for its ubiquitous pop-up and pop-under ads, which were so prolific that the company's Web site rocketed to one of the most heavily trafficked on the Web shortly after the campaign was launched in spring 2001. He said it was the most effective way that the company could introduce its product to its target audience of "do-it-yourself" equipment installers and people who operate small and home offices.
"We're not naive, and we understand it doesn't work for everybody," Denenholz said. "But it's helped us introduce to a whole new audience...the advantages of the wireless systems we create."
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