Adware under the microscope
Published: 28 Jun 2002 16:08 BST
Despite its rising popularity among marketers, adware has yet to become a mainstream tool. Although click-through rates tend to be much higher than for banner ads, it's impossible to say whether the better rates translate into higher sales.
Early research in academia has been inconclusive. Some question whether click-through rates are high because many consumers, tired of enduring unsolicited X10 pop-ups or other ads, simply click on them to find out which company is responsible.
"All I'm getting from students I've interviewed is, 'They're incredibly annoying,'" said Steve Jones, professor of communications at the University of Illinois at Chicago. "If what we consider success is putting a brand name in someone's head, it might do that successfully--but it might not put it in a positive light."
The theory behind adware breaks down especially fast when more than one person uses the same computer. The people who authorized adware to be installed on the machines--often teenagers or children eager for free software to download music and videos--are usually not the relatively affluent, credit card-carrying adults sought most by advertisers.
"The theory goes that you're only exposed to ads that you're interested in," said Central Michigan University's Moscardelli. "The reality is that you're exposed to ads that everyone who uses your computer may be interested in."
Damian Bazadona, an online marketing consultant and founder of New York-based Situation Marketing, also points out that many people--himself included--provide false information during online registration for free e-mail accounts or registration-required content sites.
"People are becoming more nervous about giving their information out, so the only information that you can farm from them is dummy information," Bazadona said. "What's the value in dummy data?"
Beyond market factors, adware faces obstacles in the legal system as well. Although no adware-oriented cases appear to be in courts at the moment, some marketing experts say it's only a matter of time before one corporation sues another for blocking its online ad with a pop-up.
"If you're the agency that placed an ad and ad software places a competitor's ad directly over yours, you're still getting charged for the impression--even though it got far less traction than you thought it would get," said Mark Grimes, president of Eyescream Interactive, an online marketing company in Portland, Ore. "One can only speculate that someone will sue over this sometime soon."
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