October 21, 2005
"Does Anyone Really Like Adware?" My Response to Suzi's Question
By Eric Goldman
Suzi of Spyware Confidential asks: "Does anyone really like adware?"
I think this question is crucial, and it's one I've been wondering myself. However, I think there are really 2 subquestions embedded in this one, and I'd like to deal with them separately.
One way to frame Suzi's question is: does the value proposition of adware, as currently implemented, work? To that, I think many of us--even me!--would answer the question negatively, and I think the adware vendors can largely blame themselves for this.
Most adware vendors today say: we'll give you X for free (or help you get X for free), but you'll pay for it with pop-up ads. In this model, the pop-up ads are the "price" or the "cost" of the consumer getting something they want.
But thinking of ads as a cost to consumers, rather than a benefit, seals the fate of the adware vendors. When consumers view ads as a cost, they have every incentive to avoid the ads. We've seen this behavior over and over again with ad-supported media. Consumers take the "good" stuff (the "content") and avoid the "bad" stuff (the ads). For example, drivers in cars switch between preset radio stations when an ad comes on, and TiVo and VCR owners blast through the ads. (Even I do that--with my TiVo, I can shave a half-hour show down to 22-23 minutes).
Thus, each time adware vendors bang the drums that adware-served pop-up ads are the price of something else, they are reinforcing that consumers should resent the value proposition and try to vitiate the deal. And, on that basis, I think even the adware vendors are admitting that the current answer to Suzi's question is no (at least with respect to adware qua adware).
Adware in the Future
Personally, I am less interested in the state of adware today. I recognize that some bad practices today are creating significant difficulty, and I don't want to trivialize those. But technology, business practices and consumer expectations are evolving rapidly, so focusing on today's snapshot of activity may be too myopic. Accordingly, we could reframe Suzi's question as--does adware have the capacity to be something people like and value?
I think the answer to this reframed question is emphatically yes. Indeed, I'll go one step further and say that adware has the potential to have a positive value proposition even if it's distributed on a standalone basis (i.e., without any bundled applications).
I know it sounds crazy to most people conditioned to hate advertising, but advertising can be a benefit, not a cost. Consider, for example, a person looking for a job or an apartment might buy a newspaper to get the classified ads. Stated another way, this person would pay to purchase advertising. Crazy, isn't it? Not at all. Where ads add value to consumers, consumers will want them, seek them out, potentially even pay for them.
Adware vendors have the theoretical capacity to make their software valuable enough that consumers will want it on a standalone basis. If adware vendors succeeded in that, I predict that consumers would gladly embrace adware.
While this capacity may be theoretical, there are existing models of such a mutually-beneficial vendor-consumer relationship: "infomediaries."
An infomediary model works only if consumers trust the infomediary. This is why I think adware vendors' current efforts are so misdirected. Adware vendors should be focusing on how to win consumer trust in the ads they serve, not how to improve distribution or the bundled value proposition. The current crop of adware vendors may or may not evolve to meet this challenge, but future market entrants will--so long as we don't destroy the competitive environment in a way that prevents their entry.
Posted by Eric at October 21, 2005 10:47 AM | Adware/Spyware
>I know it sounds crazy to most people conditioned >to hate advertising, but advertising can be a >benefit, not a cost
I think you're right about this, but how do we get to a place where advertising is high-value to the consumer. And can't we do it w/o personal info?
I am overwhelmed by low-value advertising. Billboards. Ads for products that are in parity with each other (coke v. pepsi). Ads for branded products that are really no better than generics. Ads that frustrate choice by highlighting irrelevant facts, such as celebrity endorsement, rather than product peformance.
Instead of moving towards personalization, couldn't we get to a state of beneficial ads faster by:
1) Banning puffing.
2) Requiring all representations to be provable.
Posted by: Chris Hoofnagle at October 22, 2005 01:30 PM
Thanks, Chris. I do think there are ways to improve advertising's relevancy without risking privacy. My preferred approach will be outlined in my next big paper--the short answer is that I believe individualized filters can improve relevancy while keeping all filtering "rules" on the client-side (rather than disclosed to third parties).
I'll have to think more about banning "puffing." If it's truthful information, a puffing ban may unconstitutional. And, I think there's a risk that while the information is not relevant and helpful to you, it may be relevant and helpful to other consumers.
But we already require advertisers to make only provable representations--it's part of the restrictions on false advertising.
Posted by: Eric Goldman at October 22, 2005 04:18 PM
Until we see a decline in malicious use of adware technologies, we will not see an increase in user appreciation of the same.
Personally, I see a potential value in ad-supported software and stand-alone adware. It's the intrusiveness that I have issue with.
Adware applications should sit in the background, compiling their relevant links, and diplaying the results only when asked by the user. The adware purveyors should not care if the user ever checks the results, as they still receive the benefit of additional data (search queries, visited site categories) to use in their practice.
Posted by: Joe Chevalier at October 31, 2005 02:37 PM
Another analogy that might be relevant to your adware of the future argument: much of the web is already an advertisement that people seek out. Consider the average automaker's website (I mention because I'm about to be in the market for a new car). Ultimately, 95% of the content on, say, Ford.com, is marketing material (the other 5% is generally investor information - which might also be considered marketing materials). I know this, and I go to the website anyway. I want the information it presents. I'm also going to go to other sources like Edmunds or Consumer Reports, but the information on the company website is helpful, and so I use it.
What is the point I'm trying to make (poorly)? The websites work as marketing because they are targeted to me very effectively because *I* chose to go there. Adware is going to be seen as a positive when it transforms itself into a tool to find desired information. Except that such tools already exists in the form of Google and Yahoo!, both of whom seem to be doing quite well.
Posted by: David at November 1, 2005 09:20 AM
David, thanks for the comment. Two observations:
1) While it might be easy to learn about the various auto manufacturers who can satisfy your preferences, given that the number is small and they get a lot of word-of-mouth, this is not always the case with every type of consumer preference you have. As a result, the assumption that people will seek out the right information may not hold across all types of consumer searches.
2) People search for information in different ways. For example, when I'm shopping for products/services, I'm a researcher--I tend to look at my options exhaustively. However, I'm in the minority; most people do very limited research and satisfice with significantly less data than I feel I need. Therefore, it would be a mistake for me to assume that everyone searches the way I do. I further think it's a mistake to assume that there's a dominant "one-size-fits-all" search strategy that works across all people for all types of searches.
Posted by: Eric Goldman at November 1, 2005 09:40 AM