|
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads |  |
JULY 17, 2006
A Software Hall of Mirrors Dubious practices inflate the number of customers that spyware companies are generating for advertisers Computer users aren't the only victims of Direct Revenue's alleged spyware. The company has tried to inflate the price of advertising it sells to corporate customers, according to interviews with current and former Direct Revenue employees and an internal company e-mail disclosed by New York Attorney General Eliot Spitzer in his suit against Direct Revenue. The method, known within Direct Revenue as supertargeting, zeroes in on advertisers that pay the firm for each new customer delivered. Direct Revenue sometimes raises the customer count by having its software, which lurks in consumers' hard drives, watch for when users venture onto an advertiser's Web site. Once users are on the site, Direct Revenue feeds them pop-up ads for the advertiser. If that consumer eventually becomes a customer of the advertiser, Direct Revenue claims credit for referring the business, even though it didn't really send the customer to the site in question. One former Direct Revenue salesperson recalls internal debate over the practice. "It was cheating," this person says. "Everyone knew that the supertargeting was wrong and risky, but the revenue came so easy, they ran with it. They kept saying it was just a Band-Aid to fix a drop in revenue." "MAXIMIZING PERFORMANCE." To keep advertisers from becoming suspicious, Direct Revenue would distract advertisers with another technique: "counterintuitive marketing," or "crap" for short. This entailed flooding the Internet with pop-ups for the advertiser, so it would have the impression that Direct Revenue was working hard for its referral fees. Direct Revenue salesman Tim Ebers summed up the practice in a March, 2005, e-mail detailing ways to increase revenues: "[Use] supertargeting to help max out current clients by adding in crap and then giving them love at the same time to minimize performance drop." Direct Revenue says that it has changed some of its methods but declines to comment on supertargeting. Spitzer doesn't address the topic in his suit. Whatever its propriety, supertargeting continues, according to Internet consultant and anti-spyware watchdog Benjamin Edelman. He has documented examples as recently as June 10. On that day, Edelman visited Dell's (DELL ) Web site on a test computer running Direct Revenue's software. After he arrived at the site, Direct Revenue fired a pop-up ad to the test computer promoting a gift card for Dell. An outfit called BlueDiamondDeals, which partners with a Dell advertising affiliate, had placed the ad with Direct Revenue. The ad puts a "cookie," or digital stamp, on the computer that tells Dell to credit the affiliate with a commission if the visitor becomes a customer. Typically, an affiliate and Direct Revenue will divide the commission, says Edelman. "Rather than giving advertisers a fair value on mutually agreeable terms, Direct Revenue instead cheats merchants and seeks payments without adding any bona fide value," he says. Dell says that it does not work with BlueDiamondDeals and that it prohibits its ads from appearing in spyware programs. BlueDiamond couldn't be located.  Elgin is a correspondent with BusinessWeek in San Mateo, Calif.
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2006, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
