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The bad news about pop-under spam

CNET News.com's Evan Hansen writes that these kinds of online ads are not going away and are almost guaranteed to increase in the near future, regardless of how annoyed people get.

I once got a glimpse into the inner secrets of annoying marketers when I took a summer job canvassing door-to-door for Greenpeace.

I remember lots of rejection and even one angry man who threatened to report me to the police. I also recall earning what I then thought was a boatload of money, thanks to a generous 40 percent commission rate that pushed my minimum wage salary well above $15 a hour.

So here's the deal: Everyone hates annoying marketers, but someone right now is giving in to one.

I bring this all up because of the recent wave of rage directed at X10, the miniature camera maker that's been carpet-bombing the Web with a new insidious breed of advertising, the "pop-under." Such ads open a new browser window underneath a Web page and become visible when the viewer closes the main window.

First the good news. If you're sick of these ads and use Microsoft Windows, try a simple solution suggested by CNET News.com reader Mike Little: Call up a system file called "hosts" and add a line that reads "127.0.0.1 ads.x10.com." Save the file and restart your PC.

This trick redirects queries for the pop-under to your own PC, preventing it from launching, unless your computer happens to be an X10 ad server. I tried it out and it works, meaning you can avoid the ads without installing filter programs like Popup Stopper, which can slow down Web performance.

Now comes the bad news. Like spam, these kinds of ad campaigns are not going away and are almost guaranteed to increase in the near future, regardless of how annoyed people get.

The reason is simple, says Adam Gerber, media director of Young & Rubicam's online arm, DigitalEdge: They work.

"X10 says it has sold thousands of cameras thanks to these ads," says Gerber, whose company did not work on the campaign. "Imagine how much that's going to encourage others to do the same."

That may sound obvious, but the X10 campaign is instructive in highlighting the failure of older approaches to advertising on the Web.

Driving the wave of in-your-face pitches, of course, is the collapse of the mainstream online advertising market. Web publishers that once rejected ads that might detract from the user experience and drive away traffic are now eager to sell these types of campaigns. Eventually, the end user may come back into the equation, but for now, companies are willing to try almost anything to make a buck.

Their strategies haven't always helped, however. In a vicious cycle, many publishers have responded to low demand by reducing prices and increasing their inventories, driving down the value of their ad space and sparking a new round of price cuts. As a result, advertisers in many cases can now buy 1,000 ad impressions for $1 or less, according to Gerber, down from $5 or more just a few months ago.

Since ad space on Web sites is now selling for a song, good old-fashioned mass marketing is economical for companies like X10, whose potential market includes anyone with a PC.

This part of the ad blowout is well understood. Less widely known, however, is the failure of new ad products that were supposed to insulate us from annoying campaigns by allowing advertisers to target messages to the people who are most likely to respond to them.

Companies that run online ad networks like DoubleClick's are rolling out plans to create a vast database of consumer profiles to offer advertisers better consumer intelligence than anything available in the offline world. For now, however, advertisers aren't convinced that such targeting works better than alternatives such as carpet-bombing, which is significantly cheaper.

While targeting profiled consumers can cost six times as much as untargeted ads, they don't always lead to higher response rates.

For example, Gerber says, car companies can buy data that lets them send ads to people who have visited an auto Web site at least once in the past month, no matter where they happen to go online. The idea is to serve up car ads to people who are looking to buy a car.

Sounds good in theory, but the response rates don't, in fact, go up, according to Gerber. As a result, ad buyers are happy to rely on standard techniques such as contextual programming, which delivers a general audience demographic without offering much detail about individuals.

Other problems facing profiling include a string of pending class-action lawsuits alleging privacy violations by ad companies, and new privacy technology that will make it harder to track information about Web surfers--and that will be incorporated into Microsoft's upcoming Internet Explorer 6 Web browser.

Privacy concerns aside, the situation represents a lost opportunity for Net advertising, which has the long-term potential to align the interests of consumers and marketers like no other medium.

But the reality is that the Net will likely remain a trolling ground for bottom-feeders happy to reach the highest possible numbers of eyeballs for the lowest possible price--whether you're interested or not.