The Big Lie about Spyware and Adware

Remember the last time you started your computer and launched a browser and Microsoft took over your home page with an invitation to update your browser?

That’s spyware, by many current definitions. Internet Explorer is bundled with Windows. No warning about automated updates. They just pop up onto your screen. Just like Gator’s ads.

Ad-supported applications are old news. What’s new is how the adware industry uses this model to market and how detractors lump all these applications in a pile called spyware. From loyalty applications such as Ebates to ballistic marketers such as Gator, marketing is packaged in software applications that deliver value to advertisers. Adware is not always spyware.

Ad-supported software is a demand-driven model, and it’s building the next generation of adware. A user exchanges control of the software for a certain quantity of advertising. Spyware has become synonymous with adware. That’s simply wrong.

Adware was driven first by the P2P revolution of file swapping, then morphed into consumer incentive programs. Now virtually any form of it may be called spyware. There are placid versions of adware, and versions that are more ballistic.

Few would call Eudora spyware. The free version of this email client makes you view ads. Because it’s limited to small banner ads, no one really minds.

Then, there’s Gator and WhenU.com. Both are labeled spyware, although neither fits the current definition. A brilliant article on the subject covers the issues and opinions and claims Gator intrudes on publisher’s rights:

The user is denied access to legitimate, bought-and-paid-for advertising, and worse, is inundated with many more pop-ups and banners than they would be during normal, Gator-free surfing.
Problem is, Gator sells more of that advertising to more clients. Over 400 of them have bought ads on that application, which has been downloaded something like 25 million times. There’s power in numbers.

Who owns the desktop, the browser, or the application? That seems to be the question, more than the pseudo-issue of spyware versus adware. Gator’s Scott Eagle, chief marketing officer, has a simple answer. “Consumers have a right to decide for themselves what is displayed on their own computer screens, not publishers. The consumer invites publisher’s content (software or Web site) onto their computer. Much of this content is free and supported by advertising.”

Scott continued, “What’s at issue is consumers’ right to use hundreds of popular software applications that automatically display separate windows while surfing. These range from Gator’s e-wallet to ICQ Instant Messenger to Norton AntiVirus and Microsoft Outlook’s reminder feature.”

The consumer owns the desktop. The consumer downloads all kinds of software, some he knows about and some he doesn’t, but who remembers everything on her hard drive? That’s the reality, and these applications will be around in one form or another.

Avi Naider, CEO of WhenU, shared his opinion. “Yet, when it comes to the desktop, many try to assert that it is publishers and Web sites that somehow ‘own the user.’ We believe that the desktop is a very competitive space: Kazaa and BearShare have every right to compete for user’s eyeballs and dollars with other publishers and with ISPs such as AOL and Microsoft.”

“If the ‘price for a free version of Kazaa is another piece of software that shows you targeted offers, a user has the right to make this tradeoff and an advertiser has the right to approach the audience through this medium,” Naider added.

What’s the true definition of spyware? Of adware? This is the crux of the issue. There are no hard definitions, no rules to follow. The new adware model is ballistic and effective. It’s marketing as an application. The old model, marketing in the form of ads posted on Web sites and email, is ineffective. Advertisers go where things work, the consequences of which we are dealing with. Battle lines are being drawn online and in courts. The software is installed. Once it gets going, it’s like a boulder rolling down a hill.

There are No Rules… Yet

In this column, spyware is software installed on your computer without your knowledge or without revealing its intent. Spyware is hard for an average user to find. If ads are shown, they anonymously launch behind the scenes. Where it comes from and how to uninstall is beyond the understanding of the average user.

If you look at the top companies accused of distributing spyware, they don’t fit this definition. Gator, WhenU, Kazaa, Morpheus, and a slew of others have turned their applications into legitimate marketing engines. They are easy to download and most have halted various tricks tried earlier this year. Adware is going mainstream. It delivers value to users who continue using the applications and frustrates others through its control of millions of desktops on a daily basis.

That’s not stealing. That’s marketing, driven by consumer demand. Whether users know they have this software is another issue. The growth of these applications is dramatically affecting the affiliate industry.

Shawn Schwegman, in charge of the Overstock.com’s affiliate program, sees the effect on smaller affiliates. “The affiliate industry is changing so fast that smaller affiliates are not technically proficient enough to keep up,” said Schwegman.

“The question is,” Schwegman continued, “is adware breaking the rules? Unless people get together and define the rules, it’s a no-win situation. Once the rules are defined, the big guys will change the software to play by the rules and the little guys may not be technically proficient enough to manage the technologies. Is it wrong, competitive, or just a fiercely competitive market? The root of the problem is that everyone is saying they are breaking the rules, but no one is defining the rules.”

There’s a difference between aggressive and illegal. Overstock chooses to work with Morpheus, but not WhenU or Gator because of their tactics. It’s a choice. Consumers have a choice, merchants have a choice, advertisers have a choice, and adware has a choice of how to do business. Though adware’s tactics are debatable, their impact is undeniable and growing.

What Next? Standards!

The time has come for affiliates to stop assaulting merchants on discussion boards and propose solutions. Adware companies must recognize the marketplace, the industry should set rules together.

Wayne Porter of Afftrack.com is mediating a meeting in New York on November 7 to help seek a solution. “The primary focus of the meeting… is to promote dialogue between the four most prominent solution providers: Be Free, [Commission Junction], LinkShare, and Performics. We hope to see a meaningful exchange of information and a unified set of rules for engagement for software applications,” said Porter.

“This is no simple task,” Porter continued, ” since there are four fierce competitors sitting down to the table, but so far all solution providers have been willing to cooperate and work together. In the end, we should have some rules that would govern how software applications articulate with performance marketing networks.”

This meeting is the first time all networks (and many adware companies) have agreed to come together under one roof in an attempt to create an industry standard. Of course, they will most likely define rules everyone may not be happy with, but it’s a great first step.

Adware is here to stay. The fallacy is that adware is automatically spyware. Hopefully, most attendees will engage in productive talk, not accusations. Affiliates should be protected while the new adware sector grows.

I’ll let you know how it goes.

By Declan Dunn, The ClickZ Network