IAB Reverses Policy on Gator.com

Despite the heated rhetoric earlier this year, the Interactive Advertising Bureau and Gator.com have agreed to put their differences on hold.

Now, the online ad sellers association said it would work with the Redwood City, Calif.-based software firm to develop a new version of its Companion Pop-Up Banner ad unit. Specifically, the New York-based IAB said it would encourage its membership to meet with Gator and help to create products that work in conjunction with Web publishers’ own sales efforts.

The talks will center on developing a version of Gator’s ad unit that would deliver an ad in place of sites’ unsold inventory, with Gator splitting the revenue with publishers. The software firm said it expects to begin testing such a product early next year.

The joint effort is a remarkable change of heart from just four months ago. In late August, following weeks of traded jabs in the press, IAB executives escalated the dispute by issuing a statement accusing Gator.com of being unfair to Web publishers and of violating federal copyright, trademark and intellectual property laws.

Gator, which had said that it would be willing to work with industry groups, responded by suing for libel.

The argument stems from Gator’s Companion software, which users ostensibly download for its ability to fill in Web forms, and to receive special deals that are targeted based on their anonymous surfing habits. But Gator also displays banner ads that obscure Web sites’ own ads.

According to the IAB, this practice endangered contracts between Web publishers and their advertisers, hijacked sites’ audiences, and potentially deceived consumers into thinking a Gator-served ad came from the Web site. Additionally, the IAB charged that the software’s users often were unaware that Gator was obscuring sites’ ads at all.

Now, however, those issues would seem to be things of the past. Gator said it has agreed to extend various deadlines relating to the lawsuit, in favor of discussions with the IAB and Web publishers about an amenable solution. The firm also said it would stop selling the controversial pop-up ad unit for the time being, though it would honor existing advertisers’ contracts.

“As a leader in desktop behavioral marketing with 10 million active users and over 200 advertisers, we feel we have proven that behavioral targeting works,” said Gator president and chief executive Jeff McFadden. “Now, as a gesture of good faith in our ongoing discussions … we will put this product on hold as we talk with IAB members to co-develop a new version that is more publisher-friendly, designed to create a revenue stream for them by monetizing unused banner inventory.”

The IAB’s reversal of position comes following a change of leadership late last month, with the temporary appointment of Greg Stuart to the post of president and chief executive. Stuart, a longtime ad executive and the founder of now-defunct dot-com marketing play DeltaClick, will fill the post until the return of Robin Webster, who took a leave of absence to care for a sick family member.

Stuart’s old firm, DeltaClick, itself had a Gator-like way of targeting ads — delivering ads in a special drop-down menu based on the sites that a user is visiting. But in a statement, Stuart said that bigger concerns had been the main reason for the about-face in policy.

“We are in the midst of an extremely crucial period in the growth of the online advertising industry and should not allow ourselves to be sidetracked by differences of opinion when we can work together for the benefit of all,” Stuart said. “I commend Gator for its willingness to work with the IAB and its members to develop a new version of its banner product that could provide direct revenue to our member companies.”

“While we both regret that these discussions didn’t happen earlier, I believe that we can arrange for Gator and IAB member companies to meet and discuss their various points of view and arrive at a solution that works for all,” he added. “We are all directed towards growing the online ad business and these discussions may very well help the cause.”

Stuart and spokespeople from the IAB declined to comment further on reasons behind the change.

The IAB also said that it is planning to form a committee to study new interactive advertising technologies and their impact, and said it would invite Gator to participate.

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