Wednesday, August 09, 2006

New Report Tracks the Origin and Path of Unwanted Internet Ads

WASHINGTON - August 9 - More than half of the pop-up ads served by nuisance "adware" programs are placed knowingly by advertisers, according to a study released today by the Center for Democracy & Technology (CDT).

Although many ads purchased by major national companies pass through complex networks of affiliates before being displayed by nuisance adware distributors, 55 percent of the ads served by those distributors are placed directly by the companies being advertised, according to "Following the Money II: The Role of Intermediaries in Adware Advertising." A copy of the report is available at (http://www.cdt.org/privacy/20060809adware.pdf)

"It's deeply frustrating that legitimate companies continue to willingly do business with adware distributors known to be engaged in unethical, and in some cases illegal, distribution practices," CDT Deputy Director Ari Schwartz said. "Clearly these companies haven't gotten the message about how fed up consumers are with adware and spyware. I can't understand why any legitimate company would risk tarnishing its brand by association with such practices."

Released in March of this year, the first Following the Money report identified many well-respected companies that were advertising through nuisance adware distributor Zango (formerly known as180solutions). That report also detailed how complex affiliate relationships could sometimes make it difficult for advertisers to know where and how their advertisements were ultimately being displayed.

Following the Money II goes one step further, identifying a sample of 380 ads served by Zango and Direct Revenue --both of which have been shown to engage in deceptive distribution practices -- and tracing the path those ads take from the advertiser to the nuisance adware provider.

CDT was surprised to discover that advertisers knowingly paid for fully 60 percent of the ads served by Zango and Direct Revenue. In addition to the 55 percent that were placed directly, another 5 percent were placed through intermediaries that didn't have a say in ad placement. As identified in the earlier report, ads placed by major national brands tended to travel through more intermediaries (two, on average) than those placed by lesser-known companies, which averaged less than one intermediary per transaction.

Following the Money II urges companies to get serious about establishing and enforcing policies to prevent their ads from appearing through nuisance distributors, and to be more careful about choosing affiliate partners.

"Companies need to take responsibility when their advertising dollars go to support companies that prey on unsuspecting consumers," said CDT Policy Analyst Alissa Cooper, who co-authored the report. "Whether placed directly or through intermediaries, these ads diminish the Internet experience for millions of people. Advertisers that work with these distributors are running out of excuses, and must either start policing their advertising spending, or answering to their customers who have been harmed by adware."

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