One problem with the Internet as an end-to-end commercialchannel is that nobody owns it, as contrasted with old-worldnetworking apparatus like, say, a television network, a truckingfleet, or FedEx. That means business or marketing models presumedsecure can be upended by raiders using the Internet commons inunexpected ways.
Internet content providers and advertisers have struggledmightily to profit from banner ads, to little avail. Now alongcomes Gator, a downloadablebrowser plug-in package that works as a price-comparison tool and"wallet" to fill out online forms. But Gator also sometimesprojects pop-up advertisements from its business partners directlyon top of preexisting banner ads on pages like Yahoo, obscuring theoriginal.
Gator opponents, particularly the Interactive Advertising Bureau (IAB), areincensed at what they regard as an interference with a preexistingrelationship between an advertiser and a Web site. But theirargument that Gator's business practices "substantially infringe onthe trademark, copyright, and intellectual property rights of Webpublishers and advertisers" is a stretch.
That's because, for users to see Gator's tailored ads, they mustfirst download the Gator software, which means that its ads aredelivered to users' PCs with their consent. And unlike the originalfixed banner ad, Gator's ads are branded and can be clicked off ordragged elsewhere on the desktop-so they are distinguishable fromthe original. Users receive Gator's overlay ads on the basis oftheir Web-surfing habits (which means Gator is tracking them, ifthey can stomach that), or they can disable the ad-serving feature.Those who haven't downloaded Gator-the vast majority of Internetusers-see the original ads.
Furthermore, pop-up ads as such, even the ever-annoyingX-10 spy/toilet camera that most people reject, pre-date Gator,and they are not illegal. Like Gator's ads, pop-up ads are oftengenerated by online behavior, such as sites visited. Given thefuzziness of property rights on the Internet, a host of trespassissues has predictably emerged. Gator is simply the latest. Somesee e-mail spam as a form of trespass, claiming it is a violationof one's in-box.
In another trespass dispute, software "robots" have beendeployed to comb databases like real estate listings and eBayauctions, for comparison to rival listings. Targets of suchscouring efforts have sought legislative assurances that their databases areproprietary and cannot be legally assembled by outsiders. Butan alternative interpretation is that anyone may legitimatelyassemble facts that have been voluntarily placed on what is clearlya very public network, one that offered no promise of beingshielded from prying eyes in the first place. Search engines dosuch "prying" every day; otherwise we couldn't navigate theWeb.
One's sympathies in the Gator versus IAB ad war will depend uponthe status one accords to Web pages: Was there ever a real reasonfor publishers and advertisers to think they could controleverything a user saw, given the open-ended potential of hyperlinktechnology, and software's obvious ability to route content tobrowsers in novel ways? In any event, users' ability to configurethe entire graphical desktop "experience" predates the browser.
Consumers are already able to ignore ads, or download softwarelike AdSubtract to blockads altogether. In a sense, the consumer-control ethos, the notionthat we don't have to look at ads, arguably puts Gator inthe position of "infringing" less than the "imposition" of theoriginal ad on the user (borrowing for a moment the language ofthose who lament the commercialization of the Web). While there isnothing objectionable about banner ads, Gator technologynonetheless "gives" ownership of desktop space back to theconsumer. Here at last is permission-based, opt-in advertising.
The emergence of Gator reinforces the fact that there's more tothe Internet than the Web, and that there are more potentialcommercially exploitable avenues for communication and marketingyet to be discovered. Gator makes use of the Internet's underlyingcapabilities, possibilities that hadn't yet occurred to anyoneelse, just as the original banner ad trailblazers first did yearsago to the consternation of those who despised the very notion ofcommerce on the Internet. What's being served up by Gator's pricecomparison tool and pop-ups are not Web pages as such, butinformation that people have elected to receive. Do we cut off anew communications avenue to "save" the prevailing (and faltering)banner ad orthodoxy, particularly when those who don't want Gatorstill 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'smoral outrage would be more convincing if its members owned thenetwork. For example, AOL, which exists apart from the widerInternet, can control what ads its members see within itscommunities and cast out interlopers who attempt to track itsusers. Gator-style ads won't appear within AOL's "communities"unless AOL makes a deal.
Yet while private networks (or sub-networks on the publicInternet) can halt deployment of a Gator-like "intruder," theymight embrace similar tracking technologies. Gator can target adsbased on consumers' requests and behavior, whichis dreamland as far as Internet commerce (or any commerce)is concerned, especially relative to abysmal click-through rates onbanner ads.
Given online property rights uncertainties, the realm ofInternet advertising is truly an area where spontaneous marketorganization, driven by deal-making, has a crucial role to playnow. The possibilities of Gator herald the kind of sea change inWeb advertising that indicates it may be time to form a new tradegroup, or at the very least craft a negotiated settlement because,frankly, some members of the IAB likely would be better off allyingwith Gator given its superior claimedclick-through rates of 6 to 26 percent.
It's apparent that the rules of the game are changing when theIAB is moved to utter, "Gator is a software company, not a mediacompany. They have no business selling advertising." If the Net'scharacteristics allow a superior targeting technology, that newtechnology is compelling because it can mean more profits foradvertisers and content providers. Targeted ads on a granular scaleare irresistible.
Of course, consumer pressure could force Gator to change tacticsif they were to conclude the company is trying to substitute acutemascot and a bit of convenience and personalization forinferior deals and too much privacy invasion. They would just stopdownloading Gator. But the possibilities of the underlyingtechnology seem to change the terms of Internet advertising.
Of course, given the Net's unpredictability, Gator's businessmodel isn't on solid ground: "Ambushes" can go both ways. Itwouldn't be surprising to see IAB regroup, and collectively embracesoftware aimed at disabling Gator, to somehow prevent it fromoverlaying ads. Those risks were the terms whenbusinesses-including Gator-decided to flock to the open Internet, arealm without rules. But that possibility creates another impetusto seek compromise rather than government interference. Despitedisarray and groping, the market is working, with consumersincreasingly in the driver's seat.