Gator: Problem or Solution? Part 2

My columns rarely stir passionate emotions. I get a fair amount of insightful feedback, but it generally lacks the fervor generated by religious or political debates. I do, after all, write about customer data. Things changed two weeks ago, when my column on Gator appeared. ClickZ readers demonstrated unexpected zeal for this topic. (Comments are posted here.)

Those in favor made arguments comparing Gator to those in-store systems that flash a coupon at you for, say, Prego spaghetti sauce just as you reach for a jar of Ragu. Others compare it to a billboard for a store looming above a competitor’s front door. “Survival of the fittest” was an term one reader applied.

The anti-Gator contingent views the company as the scourge of the Internet. These folk agree with the pending legal charges and allege a host of grievances that include deceptive downloads, spyware, annoying pop-ups, and OS crashes. One reader compares Gator’s strong-arm approach to “The Sopranos.”

Opinions about Gator? Everyone in this business has one. However, nobody’s feelings about Gator have more passion, fervor, or zeal than Scott Eagle’s. Eagle gets a lot of practice as a Gator zealot — he’s its chief marketing officer. Eagle sent me an email to make his case for Gator. I decided to speak with him directly and present his arguments.

The crux of Eagle’s reasoning is consumer choice. I had posited an example of Gator in action: I’m browsing a number of wireless phone provider sites, comparing plans and pricing. Gator springs into action with a pop-up ad offering a better deal with a different provider than the one whose site I’m currently on. Eagle argues:

Does the consumer have the right to download and use software that gives him alternatives and could save him money? Or does the wireless phone provider get the right to control that consumer’s computer screen? It is the user’s computer, the user invited the wireless carrier site onto his screen, the user invited Gator to help with forms/passwords. The user in this case valued the alternative promotion Gator offered on behalf of the advertiser.

He continues:

Keep in mind, [Gator’s] separate window ads are not part of the page. The user knows where they originate. Just as they know where ICQ, Instant Messenger, and Outlook reminders originate. And the ads, if clicked, open new windows. So once these windows are closed, the user is back to the original Web site, such as the wireless Web site. So the consumer was empowered. Empowered to control their screen. Empowered to invite both Gator and the wireless site. Empowered to save money with the Gator offer, or empowered to reject the Gator offer and keep reviewing the wireless Web site offering.

I agree what Gator offers consumers is intriguing and valuable. We live in a free society. It’s hard to argue against a consumer’s right to download and use a software application, as long as that application doesn’t violate the law.

That’s what the argument is about. If Gator is ruled to be illegal, wouldn’t all desktop applications appearing in separate windows on top of a browser be illegal, too? Instant Messenger and Outlook… illegal? Doesn’t that raise the question of the legality of the Windows OS? Certainly, it’s an interesting argument.

Eagle takes exception with my “pay me not to kill you” analogy. He agrees Gator’s business model creates friction with prospective advertisers, but he corrected my belief that a deal with Gator protects a site owner from competitive Gator ads popping up over its own online real estate. Gator ads appear, in their own windows, on top of the Web sites of advertisers and non-advertisers alike. Eagle provided an example:

Assume you’re a car manufacturer and you know just 10 percent of prospective customers actually visit your Web site. Now, assume one of your competitors is a Gator advertiser and their advertisements appear in a Gator window when a consumer using Gator visits your Web site. Assume that 100 people visit your Web site and that 10 percent of them receive the Gator advertisement window and visit your competitor. You are left with 90 Web site visitors. Now, assume you advertise with Gator in order to reach the 90 percent of prospective customers that don’t visit your Web site. That calculates to 900 prospective customers, of which 10 percent receive the Gator advertisement window when visiting competitive Web sites and then visit your Web site. That is an incremental 90 Web site visitors. So even though Gator may cause you to lose 10 Web site visitors, advertising with Gator generates an incremental 90 Web site visitors.

Eagle went on to explain the 10 visitors who were initially “lost” may not really have been lost at all. When a Gator user clicks on a Gator ad, Gator spawns a new browser window. That means when the user is finished with the site Gator pointed to, she immediately returns to the first site. Using “lost” to describe these customers may be erroneous.

I take back “pay me not to kill you.” It’s more “I’m going to cause you pain whether you pay me or not, so you might as well pay me to cause you pleasure as well.” I’m confident Eagle would never put it that way. He’d probably disagree.

Eagle believes Gator’s behavioral marketing generates greater returns for advertisers than traditional demographic marketing. Gator tracks users’ Web activity, anonymously and with their permission (so no privacy concerns). Then, it picks opportune moments to deliver targeted offers to users that are relevant to their Web activity. This ensures offers are informative and nonintrusive.

Eagle says Gator is a better mousetrap. It’s the reason organizations relying on ad revenue generated via demographic marketing launched the legal attack on Gator. In Eagle’s mind, they’re using every means available to defend their turf and fight a hard-charging challenger.

Eagle says Gator is profitable with over 500 clients, at least 80 of which are Fortune 500 companies.

It appears Gator’s here to stay — unless, of course, the courts decide differently.

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