Threatened with irrelevance, online ad companies are rightly concerned about the new Gator technology. After all, Gator provides some useful services, including replacing site advertising with its own... Yikes! But the real enemy isn't Gator.
The Interactive Advertising Bureau (IAB), a trade group of ad sellers, is rightly concerned about a new technology called Gator. The technology runs with a browser and provides some useful services, including filling out forms automatically, remembering passwords, and — oh, yes — replacing that pesky site advertising with banners of its own choosing.
You can see why this would enrage advertising-supported sites. What makes them hysterical, though, is that it seems to be legal. This warrants some examination…
People can tolerate advertising on their favorite sites when it makes those services free. It’s sort of like a social contract — an implicit agreement between groups that allows for practical governance. But the Internet industry hasn’t matured enough yet to establish deep grooves of accepted obligations among these groups. For instance, we’re accustomed to advertising in our publications, but what about the browsers themselves carrying ads? What about browsers superimposing their ads atop the ones found on Web sites? These are issues that we haven’t yet digested.
We do have some precedent. Back in the good old days of the browser wars between Microsoft and Netscape (disclosure: Microsoft was my client, and I helped launch a couple of major versions of Explorer), search engines briefly experimented with programs that they distributed to users. These programs modified the code of the major browsers to put little proprietary search boxes in the top banners of browser screens. The effort, tried by Infoseek and Excite, for example, failed to get much penetration, at least partly because the browser companies kept on churning out new versions of code that proved incompatible. But it was never legally challenged successfully. In essence, people accepted that audiences could choose to modify their browsers to deliver additional services and advertising.
Moreover, several browser plug-ins have been made available over the years that will blot out advertising for no other reason than anticapitalist pique. Again, no successful legal challenges have resulted, even though publications are shown to these users without any advertising. Site managers I’ve talked to tell me that they don’t care much about these plug-ins because the penetration has been so low. The cynical side of me notes that publications likely don’t care because the advertisers still have to pay for the impression that was never seen.
So now we have a brilliant execution of the combination of these two ideas: an application that blots out ads and then replaces it with its own advertising in exchange for services rendered to the user. And there’s the rub: The governing relationship here is between the user and the various services he or she chooses to engage. The user selects a browser, selects a site, and might — at his or her whim — also choose a third-party service such as Gator.
Viewed from this perspective, Gator is merely providing a filter on Web content for users — much like those antipornography applications. If the IAB-planned complaint, to be lodged with the Federal Trade Commision (FTC) against Gator, is successful, it could mean that all those pornography-filtering applications would become contraband. Don’t hold your breath.
The sites’ best legal argument against this might be to maintain that by changing the appearance of the ad adjacencies to their content, the application fundamentally changes the meaning of the content — a violation of copyrights. But, frankly, that stretches credulity. They never treated ads like content.
I actually agree with the IAB’s concern over the issue, but not for the same reason. I love Gator. I think it throws just enough chaos into our advertising markets to keep us on our toes. And it provides a great ad vehicle for us buyers willing to exploit it. Keep in mind that it’s really us advertisers who pay the price of Gator. You don’t see Web sites discounting their prices because some of the inventory gets replaced by Gator. No, we pay for it already.
The great worry that I have comes from the browser companies. Or, let’s be honest, from Microsoft and AOL. I don’t think there’s much of a sense of Internet camaraderie at either company, certainly not enough to prevent them from getting the idea that they could effectively control all ad inventory with a similar technology. The threat to the industry isn’t Gator — it’s the browser monopoly.
Imagine if every magazine in the world were distributed by one company. That company would have the right to insert ad circulars into the publications, if it so chose. It could even paste ads on top of those already in the magazines. The proper legal argument that media companies could use to fight would be the antitrust argument.
Our current threat requires a strategy smarter than a mere legal challenge to Gator based on copyrights. That argument won’t help us against the real threat. It’s in the IAB’s interests to allow for a free and unfettered environment where media companies can provide any content on any type of site, employing any type of technology they choose. Anything less liberal will come back to haunt them in a few years.
They need to attack the right parties right off — they need to establish an interference-free policy for the browser monopolies, and they need to do it on the grounds of antitrust. The American experiment of unfettered capitalism showed us in the late 1800s that monopolistic excesses need to be curbed, especially when they become anticompetitive. The antitrust acts were developed to give us that balance. You can win a monopoly by merit, but you’re not allowed to abuse it to win other monopolies.
The IAB should stop wasting resources on Gator, unless its intent is really just to lawyer it out of business. It should, instead, write a “friend of the court” brief (brief amicus curiae) in support of the Department of Justice’s case against Microsoft. There is a short moment of opportunity here, as the remedy phase of the case is about to be reheard. Only with the legally recognized status as a monopoly will Microsoft be controllable in the near future.
The very livelihoods of those in the IAB depend on that case’s success.
