According to a new Center for Democracy and Technology (CDT) finger pointing report, large well-respected companies are helping to fund the virulent spread of unwanted and potentially harmful adware by paying for advertisements generated by those programs.
In "Following the Money: How Advertising Dollars Encourage Nuisance and Harmful Adware and What Can be Done to Reverse the Trend," CDT details how -- through a complicated network of intermediaries -- major advertisers pay to have their products and services advertised though pop-ups and other ads generated by unwanted advertising software or "adware."
Adware has evolved from an annoyance into a serious threat to the future of Internet communication. Every day, thousands of Internet users are duped into downloading adware programs they neither want nor need. Once installed, the programs bog down computers' normal functions, deluging users with popup advertisements, creating privacy and security risks, and generally diminishing the quality of the online experience.
One of the most troubling aspects of this phenomenon is that the companies fueling it are some of the largest, best-known companies in the world.
The CDT identified 18 well-known advertisers doing business with 180solutions, an adware company with a documented history of unfair and deceptive practices, and attempted to contact each about their advertising policies.
The CDT earlier this year filed complaints with the U.S. Federal Trade Commission (FTC) charging 180solutions with "duping" users into downloading advertising software.
"It is important to note that the advertisers we contacted may or may not have a direct relationship with 180solutions," the CDT report states. "Given the nature of the Internet advertising industry, it is possible for companies to have several intermediaries between themselves and adware distributors."
The report adds, however, "Our testing, which included the use of a packer sniffer to monitor how the ads were loaded, suggested that many of these advertisers did deal directly with 180solutions to place their ads."
Seven advertisers responded to the CDT's inquiries.
Companies not responding to the CDT's inquiries included True.com, PerfectMatch, Club Med Americas, LetsTalk, uBid, ProFlowers, GreetingCards.com, NetZero, PeoplePC, Altrec and Waterfront Media.
Of the companies that responded, "Two did not have policies [about adware] and five had policies [against adware] but they were still running ads with them [180solutions]. These companies have seen the benefit of engaging in unfair and deceptive advertising but they haven't seen the downside."
Online dating site eHarmony was one company that responded to CDT about their advertising policy. The company explained that it requires all other parties whom they advertise with to adhere to the standard conditions of the Interactive Advertising Bureau (IAB). Unfortunately, the IAB does not have its own guidelines for dealing with nuisance or harmful adware advertising. Instead, the IAB Standard Terms and Conditions document suggests that advertisers need to include terms in their affiliate agreements to address where and how their ads get placed. Thus, while eHarmony relies on IAB standards, the IAB seems to put the onus back on eHarmony to stipulate adware advertising policies. To CDT’s knowledge, eHarmony has not taken this step.
Netflix is one example of a company contacted that already had an advertising policy in place to address adware. Netflix expressed concern that its ads are appearing via 180solutions software since the Netflix policy explicitly prohibits the display of ads through any adware or spyware program.
A Netflix representative investigated the situation and assured CDT that the example found was unique and random, and that the behavior that caused the ad to be served by 180solutions software had ceased.
The report claims that within hours of receiving Netflix's explanation, CDT found three more examples of Netflix ads generated by adware programs.
Netflix pop-up advertisement at Blockbuster.com. Netflix initially paid an advertising affiliate LinkShare, which then paid another ad company, AzoogleAds.com, which then paid yet another affiliate MyGeek.com, which paid DirectRevenue, Edelman's research found. Source: benedelman.org
"It is important to note that Netflix is one of the largest online advertisers that CDT contacted," the report states. "To CDT this illustrates the difficulty large companies have in enforcing their policies given the current online advertising environment and the complex Web of relationships involved with placing ads."
"Online advertising is a whole new world, and there are some opportunists out there who take advantage of loosely based arrangements. It's a problem for the whole industry," said Steve Swasey, director of corporate communications with Netflix. "We have very open ears and very open minds. If someone comes up with a solution we're not doing we will certainly consider it."
Sleuthing spyware--and its corporate sponsors
Benjamin G. Edelman, a candidate for a doctorate in economics at Harvard University and a Harvard Law student, has posted screenshots showing the specific ads CDT describes, as well as his analysis of these advertising practices.
Edelman has documented advertisers supporting spyware, advertising intermediaries funding spyware, and affiliate commission fraud. His extensive Web site is packed with the kind of hard evidence--screenshots and videos--that's required to combat the deception he says has been employed by companies like Claria, 180solutions, WhenU and DirectRevenue to make a buck.
The report says although unscrupulous adware companies "bear the greatest blame" for the spread of unwanted programs, these adware programs wouldn't exist "without advertising dollars to fund them. We need to cut that revenue off at the source."
"Knowingly or not, these companies are fueling the spread of unwanted programs that clog people's computers, threaten privacy and tarnish the Internet experience for millions," CDT Deputy Director Ari Schwartz said. "Because the adware financing model is willfully convoluted, many companies may not know where their advertising dollars are ending up. We're urging those advertisers to be more vigilant to ensure that they aren't unwittingly bankrolling one of the Internet's fastest-growing problems."
The report urges all companies that advertise online to adopt and enforce meaningful ad placement policies. Several organizations, including the Interactive Travel Services Association, Major League Baseball, Dell and Verizon, have established policies that prohibit or discourage the use of nuisance or harmful adware in serving ads, the report found.
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