One problem with the Internet as an end-to-end commercial channel is that nobody owns it, as contrasted with old-world networking apparatus like, say, a television network, a trucking fleet, or FedEx. That means business or marketing models presumed secure can be upended by raiders using the Internet commons in unexpected ways.
Internet content providers and advertisers have struggled mightily to profit from banner ads, to little avail. Now along comes Gator, a downloadable browser plug-in package that works as a price-comparison tool and “wallet” to fill out online forms. But Gator also sometimes projects pop-up advertisements from its business partners directly on top of preexisting banner ads on pages like Yahoo, obscuring the original.
Gator opponents, particularly the Interactive Advertising Bureau (IAB), are incensed at what they regard as an interference with a preexisting relationship between an advertiser and a Web site. But their argument that Gator’s business practices “substantially infringe on the trademark, copyright, and intellectual property rights of Web publishers and advertisers” is a stretch.
That’s because, for users to see Gator’s tailored ads, they must first download the Gator software, which means that its ads are delivered to users’ PCs with their consent. And unlike the original fixed banner ad, Gator’s ads are branded and can be clicked off or dragged elsewhere on the desktop-so they are distinguishable from the original. Users receive Gator’s overlay ads on the basis of their Web-surfing habits (which means Gator is tracking them, if they can stomach that), or they can disable the ad-serving feature. Those who haven’t downloaded Gator-the vast majority of Internet users-see the original ads.
Furthermore, pop-up ads as such, even the ever-annoying X-10 spy/toilet camera that most people reject, pre-date Gator, and they are not illegal. Like Gator’s ads, pop-up ads are often generated by online behavior, such as sites visited. Given the fuzziness of property rights on the Internet, a host of trespass issues has predictably emerged. Gator is simply the latest. Some see e-mail spam as a form of trespass, claiming it is a violation of one’s in-box.
In another trespass dispute, software “robots” have been deployed to comb databases like real estate listings and eBay auctions, for comparison to rival listings. Targets of such scouring efforts have sought legislative assurances that their databases are proprietary and cannot be legally assembled by outsiders. But an alternative interpretation is that anyone may legitimately assemble facts that have been voluntarily placed on what is clearly a very public network, one that offered no promise of being shielded from prying eyes in the first place. Search engines do such “prying” every day; otherwise we couldn’t navigate the Web.
One’s sympathies in the Gator versus IAB ad war will depend upon the status one accords to Web pages: Was there ever a real reason for publishers and advertisers to think they could control everything a user saw, given the open-ended potential of hyperlink technology, and software’s obvious ability to route content to browsers in novel ways? In any event, users’ ability to configure the entire graphical desktop “experience” predates the browser.
Consumers are already able to ignore ads, or download software like AdSubtract to block ads altogether. In a sense, the consumer-control ethos, the notion that we don’t have to look at ads, arguably puts Gator in the position of “infringing” less than the “imposition” of the original ad on the user (borrowing for a moment the language of those who lament the commercialization of the Web). While there is nothing objectionable about banner ads, Gator technology nonetheless “gives” ownership of desktop space back to the consumer. Here at last is permission-based, opt-in advertising.
The emergence of Gator reinforces the fact that there’s more to the Internet than the Web, and that there are more potential commercially exploitable avenues for communication and marketing yet to be discovered. Gator makes use of the Internet’s underlying capabilities, possibilities that hadn’t yet occurred to anyone else, just as the original banner ad trailblazers first did years ago to the consternation of those who despised the very notion of commerce on the Internet. What’s being served up by Gator’s price comparison tool and pop-ups are not Web pages as such, but information that people have elected to receive. Do we cut off a new communications avenue to “save” the prevailing (and faltering) banner ad orthodoxy, particularly when those who don’t want Gator still see the original ads?
IAB obviously cannot force computer users to view their members’ ads or forbid their downloading of certain kinds of software. IAB’s moral outrage would be more convincing if its members owned the network. For example, AOL, which exists apart from the wider Internet, can control what ads its members see within its communities and cast out interlopers who attempt to track its users. Gator-style ads won’t appear within AOL’s “communities” unless AOL makes a deal.
Yet while private networks (or sub-networks on the public Internet) can halt deployment of a Gator-like “intruder,” they might embrace similar tracking technologies. Gator can target ads based on consumers’ requests and behavior, which is dreamland as far as Internet commerce (or any commerce) is concerned, especially relative to abysmal click-through rates on banner ads.
Given online property rights uncertainties, the realm of Internet advertising is truly an area where spontaneous market organization, driven by deal-making, has a crucial role to play now. The possibilities of Gator herald the kind of sea change in Web advertising that indicates it may be time to form a new trade group, or at the very least craft a negotiated settlement because, frankly, some members of the IAB likely would be better off allying with Gator given its superior claimed click-through rates of 6 to 26 percent.
It’s apparent that the rules of the game are changing when the IAB is moved to utter, “Gator is a software company, not a media company. They have no business selling advertising.” If the Net’s characteristics allow a superior targeting technology, that new technology is compelling because it can mean more profits for advertisers and content providers. Targeted ads on a granular scale are irresistible.
Of course, consumer pressure could force Gator to change tactics if they were to conclude the company is trying to substitute a cute mascot and a bit of convenience and personalization for inferior deals and too much privacy invasion. They would just stop downloading Gator. But the possibilities of the underlying technology seem to change the terms of Internet advertising.
Of course, given the Net’s unpredictability, Gator’s business model isn’t on solid ground: “Ambushes” can go both ways. It wouldn’t be surprising to see IAB regroup, and collectively embrace software aimed at disabling Gator, to somehow prevent it from overlaying ads. Those risks were the terms when businesses-including Gator-decided to flock to the open Internet, a realm without rules. But that possibility creates another impetus to seek compromise rather than government interference. Despite disarray and groping, the market is working, with consumers increasingly in the driver’s seat.