Government Sets Standards For Desktop Advertising

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legal13.jpgThere’s good news for Web consumers, advertisers, and Internet advertising software companies alike: The desktop advertising industry’s “Wild West” days are quickly coming to an end. Thanks to several recent developments, consumers have more protection – and savvy advertisers more opportunity – than before.

Consumers can now safely choose to access content that is advertising supported.  Not only can they access content they want without paying a fee, they will get relevant targeted advertising that is clearly labeled – and if the consumer tires of the deal, the adware application is easily and completely uninstallable.

Not as widely known, however, are the benefits desktop advertising applications afford advertisers too. The strong targeting capabilities and ROI opportunities are similar to those offered by large, paid search engines. Its highly-targeted ad content provides “deep linking” benefits, such as displaying a Web page with Bahamian cruise offers, rather than a general travel site, when users search “Bahamas cruise.”  Thus, desktop advertising has the potential to engage consumers precisely when they are most likely to make a purchasing decision.

In other words, successful desktop advertising companies deliver the right message to the right person at the right time, while adhering to the standards set forth by the Federal Trade Commission in the Zango consent decree. (More on that later.)

Such online opportunities have been overlooked by many advertisers, however, given a heretofore general reluctance to enter a controversial – and at times even nefarious – environment. Significant changes have occurred, especially during the last six to nine months that should ease such concerns and open the door to an abundance of legitimate advertising opportunities.

Until recently, industry standards dictating proper behavior simply did not exist, resulting in the installation of online downloadable software (both “spyware“ and adware) on computers around the world without notice or user consent. Worse, such software often disrupted the computing experience, damaged CPUs, and proved difficult or even impossible to uninstall.

An explanation of the terms spyware and adware – which are often erroneously used interchangeably – is crucial. Spyware is software that collects personal information without user knowledge, often by logging keystrokes, and is not a legitimate ad delivery vehicle. Adware is an application that delivers advertising to the desktop but may not collect personally identifiable information, or PII, and when installed with proper notice, the user’s express consent, and the ability to easily uninstall, is a legitimate avenue for ad delivery. Adware is most commonly used to support another software application or free media such as music, videos and games.

Perhaps the most publicized recent event, the New York attorney general’s settlement with three prominent advertisers has done much to fuel the development of industry standards that establish a bar by which to identify legitimate desktop advertising companies. Last January, in an unprecedented development, the New York AG’s office announced monetary settlements with three well-known companies that had promoted products and services through DirectRevenue’s adware programs, which the AG alleged had been deceptively installed on many consumers’ computers.

The AG’s settlement marked the first time that advertisers had been held financially responsible for ads displayed through desktop advertising. Under the terms of the settlements, advertisers are to deliver online ads only through adware companies that provide full disclosure to consumers, obtain their informed consent, and facilitate easy software uninstallation.

Prior to the New York precedent, however, and serving as the catalyst for these industry-wide changes, the FTC and Zango, Inc. reached a settlement and consent agreement relating to allegations of deceptive and unfair practices involving Zango’s legacy desktop advertising software. I represent the Bellevue, Wash.-based online media company and assisted it during the FTC investigation and settlement process.

That investigation – marked by cooperation and thoughtful analysis from both parties that ultimately established requirements formalizing what Zango in large measure was already doing on its own – created a set of standards for the entire online downloadable application industry. 

Congress is keeping a close eye, too, and recently reintroduced major bipartisan “spyware” legislation – another step towards uniformity and certainty for the online downloadable software sector. The goals of the “Securely Protect Yourself against Cyber Trespass Act” (“SPY ACT” for short) are to protect users of the Internet from unknowing transmission of PII through spyware programs and to ensure that consumers receive adequate notice and give informed consent before downloading software online. SPY ACT will hopefully sound the death knell for spyware once and for all.

The final and most recent step forward for the industry is the release of TRUSTe’s initial Trusted Download Beta Program “whitelist,” which will help companies understand with whom they can make trusted business decisions about advertising, partnering or distributing software products online. The TRUSTe program should also noticeably improve the consumer experience by requiring clear disclosures, explicit control (including easier uninstall), and more respect for PII and similar information. As a member of TRUSTe’s Board of Directors and the former Chair, I am particularly optimistic that the organization’s hard work on this initiative will produce great results.

There’s a common theme running through all these recent positive developments. Disclosure, informed consent, easy uninstallation, and respect for the privacy of personal information are all aspects of control that consumers, advertisers, lawmakers, content producers, Webmasters and, yes, all online advertising companies, want and need to have in place.

Let me leave you with a practical example illustrating why online advertising may be the answer to your needs. You work with an automobile sales and information site and want to recruit more highly targeted traffic and improve conversion rates. With cost-per-click expense skyrocketing, your search engine marketing is no longer as cost-effective as it once was. Instead of spending more money in search, consider a desktop advertising campaign, with keyword matching technology that triggers relevant ads and enables your marketing team to directly reach potential customers as they search or shop for cars across the Internet.

Adware provided by a desktop advertising company that knows and follows the emerging industry guidelines is as good an ad-delivery vehicle as presently exists, and advertisers would be remiss if they neglected to include its capabilities in their campaigns.

2 COMMENTS

  1. “Consumers can now safely choose to access content that is advertising supported. Not only can they access content they want without paying a fee, they will get relevant targeted advertising that is clearly labeled – and if the consumer tires of the deal, the adware application is easily and completely uninstallable.”

    Yeah and everyone just loves your client, Zango, and it’s app and how it’s been distributed and how easy-peazy it is to uninstall…

    People who write real content on the Internet can’t fully monetize their rightfully acquired traffic because desktop adware leeches from it.

    And the truth behind what Zango (and it’s advertisers) are really doing with Adware apps isn’t something you’ll discuss! Why, if it’s all warm and snuggly like a pile of sleeping kittens and it serves the consumer so effectively via contextual sensing, does Zango (and the like) target urls within the checkout process???

    Let’s call it what it is – poachware.

    I’m just a little guy who knows the truth – adware is used to interlope and invade the ecommerce process and to obfuscate the credit for who ACTUALLY referred visitors and buyers – and you’re part of the facade they present to get people to believe otherwise.

    Shame on you, you intentional misrepresentation of the truth of the nature of adware gives lawyers a bad name, and that’s no easy task.

    Does that sheep’s clothing itch?

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