Thursday, August 30, 2001
©2001 San Francisco Chronicle
A Redwood City company called Gator Corp. has added more fuel
to a growing Internet firestorm about technology that plants new
advertising on existing Web pages without the site operator's
consent.
Gator's new pop-up ad format, which covers a Web site's own banner
ads with a new ad linking away from the site, has spurred the
creation of protest sites such as scumware.com and poachware.com.
And Web masters are adding disclaimers warning visitors that
the appearance of unauthorized ad links are the work of third-party
companies such as San Francisco's EZula Inc.
Gator and EZula say advertisers are flocking to the new form of
"contextual advertising" because wit is an effective
marketing tool that also gives consumers more choices. But irate
Web designers say the ads are unfairly taking a bite out of their
revenues and defacing their creations.
"When you spend hundreds of hours on design and testing
to make sure every dot and pixel is the most effective it can
possibly be, and someone comes along and puts 20 other links to
another Web site, all that work has been shot out of the water,"
said Claire Amundsen Schaeffer, a Tampa, Fla., Web designer who
has started Scumwarelinks.com.
The new advertising technique has raised a host of issues, including
a debate over whether it infringes on intellectual property rights,
copyright laws and consumer rights. The Interactive Advertising
Bureau, a trade group, said this week it plans to ask for a federal
investigation of Gator's business practices. Meanwhile, Gator
Corp. fired back Monday, filing a civil suit against the IAB.
But at a time when the sour economy has caused advertising in
general to fall through the floor, both EZula and Gator say their
new technologies are proving to be a hit with advertisers and
consumers.
"It's a killer proposition for advertisers," said Jeff
McFadden, chief executive officer of the 3-year-old Gator Corp.
"We deliver relevant ads to consumers." Both Gator and
EZula offer a way for advertisers to target their marketing to
specific customers. The ads do not change the original Web site,
but do alter the way the site is displayed on the computer user's
monitors.
Critics say both Gator Companion Pop-Up Banner and EZula's TopText
technologies are like taking a newspaper off a reader's doorstep,
pasting new ads over the paper's ads, and handing it back to the
reader.
Gator says it has about 8 million users who have chosen to install
its programs, including its main digital wallet service that comes
bundled with other free software downloaded off the Internet.
That program automatically fills in the blanks for online forms
and remembers passwords, but also monitors the user's activity
to display ads that relate to the subject the user is seeing.
Gator's newest and most controversial program, the Companion Pop-Up
Banner, launched Aug. 20. McFadden said the pop-up ad response
rates -- either from customers clicking to new sites or actually
making a purchase -- range from 6 percent to 26 percent. Gator
has about 200 advertisers, many of them Fortune 500 companies,
and booked a dozen new orders in the first week after the launch
of the Companion Pop-Up.
Similarly, EZula spokeswoman Michele McGarry said her company
has more than 2 million users of its TopText technology, distributed
primarily with the popular Napster substitute, Kazaa. Like Gator,
TopText does not change the original Web site, but does highlight
certain keywords displayed on an individual's monitor in yellow
and creates a link to an advertiser.
About 25 percent of the users are clicking to the new advertisers'
sites, which shows a large group of consumers want the service,
McGarry said. "It's Web master's rights versus the consumers'
rights," McGarry said. "As a consumer, I control my
environment, I control which browser I use, I control where I
buy. Nobody forces me to do anything on the Internet. I really
believe the way the Internet is, the consumer owns their Internet
experience."
But the programs have made Web operators "pretty hot and
furious" because they believe such technology steals customers
away without their knowledge, said Jim Wilson, operator of a site
called JimWorld.com and editor of an online Web master's newsletter
with about 400,000 subscribers.
The ad tactic is particularly harmful to smaller Web sites that
need advertising to stay in business, the Orange County resident
said. "This has the potential to kill independent content
and just leave it to the big guys," said Wilson, who started
www.scumware.com as a forum to protest the new ad medium and pressure
advertisers to shy away.
McFadden acknowledges the controversy, but said his company's
technology could also be a boon to those same Web site operators
who protest. "We think this advertising model we got can
be deployed in partnership with Web site publishers," he
said.
In Gator's battle with the IAB, Robin Webster, CEO of the New
York group that represents more than 100 Web publishers' organizations,
said in a statement that the pop-up ads are "presenting a
false and misleading business relationship between the sites and
the substituted advertisers."
Gator sued the IAB this week in U.S. District Court in San Francisco,
claiming that an IAB attorney, who was quoted in a published interview,
made false statements that caused Gator clients to stop advertising.
Gator says the IAB attorney called the Companion Pop-Up Banners
"a dirty trick . . . stealing . . . and foul play."
The IAB had no comment on the lawsuit.
------------------------------------------------------------------------
Gator Corp. at a glance Based: Redwood City Products: Gator, which
fills in blanks in online forms and remembers passwords;
Companion pop-up banners, which cover online ads with different
ads, without the Web site owner knowing Users: 8 million . Ezula
Inc. at a glance Based: San Francisco Product: TopText, which
turns words on Web sites into links to other Web sites Users:
2 million .
Reprinted with permission from the author
E-mail Benny Evangelista at bevangelista@sfchronicle.com.
©2001 San Francisco Chronicle
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Gator
News Update
Gator and the Interactive Advertising Bureau (IAB) declare a truce
to the legal battles over Gators Pop-Up Ads. "Gator has agreed
to stop selling the Companion Pop-up Banner vehicle in its current
form," he said. "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."
http://www.newsbytes.com/news/01/172528.html
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