The LATimes reports that Fortune 500 companies are among the unwitting backers of software that sneaks into computers and watches your online moves and/or pops open banners straight on your desktop, a.k.a spyware. Because ad-buying on the internet is often several steps removed, clients dole out a big lump of money to an agency who then passes this on to smaller agencies and buyers, who in turn pass it on to affiliates. The affiliates usually work on commision in a way, getting paid by clicks that they generate, so they'll try and generate clicks and viewings any way that they can - including by popping the ads into spyware. This is why Mercedes ads are mysteriously apperaing on your desktop when you never asked for it.
"The whole system seems like it's been designed to reduce accountability," said Ben Edelman, a Harvard graduate student who has testified before Congress on spyware practices. "It's a nightmare of backroom deals."
Some of the biggest search companies, including Yahoo Inc., are also putting money behind programs some consumers can't stand. Yahoo's Overture ad division, recently renamed Yahoo Search Marketing, has a long-standing relationship with Claria Corp., an ad-supported company that installs pop-up ad software. Yahoo places copies of its clients' ads on Claria, splitting revenue that results from that business. In a withdrawn filing for a public stock sale last year, Claria said the arrangement brought in 31% of its $90 million in 2003 revenue.
Just as not all merchants care how they get their business, not all affiliate networks are equally strict. Take Commission Junction, which is owned by Westlake Village-based ValueClick Inc. and drives computer users to Citigroup Inc.'s Citibank, Home Depot Inc. and IBM Corp.
Until this month, Commission Junction's 70,000 affiliates included 180Solutions and a firm called Exact Advertising, which makes a "Bargain Buddy" pop-up that has been installed through a security flaw in Web browsers. Bargain Buddy recently carried ads for 1,000 merchants, including Dell Inc., British Airways and Gap Inc.