Zango Zings Back at CDT

  |  August 14, 2006   |  Comments

In its report on the role played by intermediaries in distributing adware-served ads, The Center for Democracy and Technology (CDT) defined intermediaries as affiliate networks, ad networks and ad platforms

Zangologo.gifIn its report on the role played by intermediaries in distributing adware-served ads, The Center for Democracy and Technology (CDT) defined intermediaries as affiliate networks, ad networks and ad platforms. The report noted, "Although affiliate and ad networks operate differently, both contribute in similar ways to the problem of funding nuisance and harmful adware by facilitating the matching of ads to ad space and taking a cut of the ad revenue generated in the process. Ad-serving platforms, meanwhile, merely provide the technology needed to track ads, and thus do not contribute financially to nuisance and harmful adware."

According to CDT, the big takeway is that after analyzing 380 ads served over a ten day period by Zango (formerly 180Solutions) and Direct Revenue applications, a whopping 55 percent involved no intermediaries.

Zango has posted a response to the report's contentions on its blog, stating that CDT's methodology is flawed and therefore the report's findings erroneous. The Zango post contended, "The use of 'intermediaries' is not, contrary to the CDT’s position, proof of an advertiser’s lack of knowledge or even an indication of anything unusual or noteworthy. We believe, therefore, that it is irresponsible to charge that 'intermediaries' are necessarily problematic in the online marketplace.

In its post, Zango went on to reiterate its disclosure policy, which it claimed, "clearly states that ads are shown to users" who download its ad-supported software. "The omission of this important context and these relevant facts from the CDT report is highly misleading," asserted Zango.

The fact is that many adware and spyware-served ads do result from chains of intermediaries passing along traffic, mainly for arbitrage purposes (buying low and selling high). The significant thing to draw from the CDT report, and what the organization stressed, is that more than half of the adware-served ads they tracked involved ZERO intermediaries. In other words, the claim is that advertisers dealt directly with Zango and Direct Revenue rather than going through intermediaries, which -- though Zango believes "it is irresponsible to charge that 'intermediaries' are necessarily problematic in the online marketplace" -- have been known to contribute not only to the distribution of adware (oftentimes unbeknownst to the ad or affiliate network), but to the serving of inappropriate ads.

The paper links Zango's partners (a.k.a. some advertisers) to a direct relationship with Zango. Zango touched on this in the response by stating, "The CDT report unfairly names several of our valued business partners and unjustly links them to the erroneous conclusions in the paper." If, indeed, Zango is the upstanding company it claims to be, I suppose it shouldn't be unjust to link the firm's partners to it. It may, however, be unjust to link advertisers to a firm that serves up "nuisance and harmful adware." But, the ongoing adware/spyware debate shows it's all in the eye of the beholder.

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Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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