Spyware. Adware. Click fraud. Rogue affiliates. Elliot Spitzer. ChoicePoint. The press uses these terms to characterize the online industry. Users are paying attention. The numbers prove it.
Consider recent consumer research. The Ponemon Institute just released its National Spyware Survey, which shows 84 percent of consumers claim to have been infected by spyware in the past year, and 97 percent don’t recall consenting to the download. Adware didn’t fare much better. Sixty-one percent of consumers don’t remember consenting to adware. Most can’t differentiate between spyware and adware.
In the CPC (define) ad world, stories are always surfacing about click fraud. The major search companies and broker networks immediately point their fingers at so-called rogue affiliates, entities or individuals who create phantom Web sites that run ads and fraudulently “click” them to generate revenue. These folks change sites regularly and move quickly, making them very hard to track down.
They’re labeled as villains by adware companies as well, which frequently point to them whenever their applications are discovered to have been surreptitiously installed on unsuspecting consumers’ browsers.
To top it off, New York Attorney General Eliot Spitzer has stepped into the ring. He’s filed an enforcement action against Intermix, an online ad company, claiming the company installed software on consumers’ computers without consent. Spitzer’s staff is reported to be targeting 30 other companies, many of them Fortune 1000 advertisers, for supporting these illegal spyware downloads. As for ChoicePoint, how many times do consumers need to hear their identities have been stolen through online hacking or poor management of databases containing their personal information?
These events should have those of us in online advertising or e-commerce worried. This flood of troubling news and growing level of consumer distrust affects our businesses.
How did this happen? Some got lazy. We probably had too much “don’t ask, don’t tell” for cost-per-action (CPA) campaigns and affiliate-based network business models.
To solve this problem, first watch your numbers. Are visitor and page growth rates slowing? How about CTRs (define)? Do you find site visitors less likely to share personal information? Are your cookies being deleted at higher rates? These things are all quite measurable and can indicate how well a business manages the effect of external forces on customers and partners.
Let’s take a lead from one of Ernest Hemmingway’s most famous short stories. We need to make online advertising a “clean, well-lighted place.”
In the story, an old waiter lectures a young waiter on the need to keep their licensed café with care. Though there are plenty of illegal bodegas that stay open all night, people need “a clean and pleasant café.” The older waiter dislikes “bars and bodegas. A clean, well-lighted café was a very different thing.”
There’s no shortage of less scrupulous venues. We need more clean, well-lighted ones. This industry made it through the post-bubble years by focusing intensely, and probably too singularly, on delivering back-end performance — and paying attention to little else. CPC and CPA were the primary currency. Ad networks were created overnight through liberal affiliate programs, without the screening and oversight processes necessary to ensure quality and compliance.
Now, the traditional media world is imploding. Seeking their target audiences with new media consumption patterns, brand advertisers are ready to abandon TV, newspapers, and magazines by billions of annual ad spend if they can reach those audiences in clean, well-lighted places. They know network TV and daily newspapers are safe environments. They don’t always feel the same about Web sites. Delivering messages in unlicensed bars and late-night bodegas may work for some direct marketers, but not for brand advertisers.
Here’s how to make this happen:
- The industry must actively work to help clean up unsavory practices. We must be prepared to ask the hard questions. We must call out bad practitioners when we find them. We need to demonstrate to the advertising community our Web sites and practices are better than other media. Given some of the recent circulation and ratings scandals, there’s real opportunity here.
- We need to take our story and value proposition directly to consumers. Organizations such as the Interactive Advertising Bureau (IAB), Online Publishers Association (OPA), and the newly created Safecount.org can provide some great vehicles for this. We must deliver fewer, more relevant ads and ensure consumers clearly understand how we do it and what’s in it for them.
Finally, and most important, site owners must closely measure and track how consumers and advertisers respond to the news of the day, good or bad. There’s no shortage of tools to measure the symptoms of consumers or advertisers who are confused or distrustful. The stakes are high. The future of advertising and e-commerce is ours. Advertisers, marketers, and consumers are coming. Let’s provide them a clean, well-lighted place where they can meet.
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