Posted on 05/09/2004 6:17:59 AM PDT by sarcasm
L.L. Bean officials can sympathize with people who are annoyed by pop-up ads on the Internet. For Bean, however, the ads create more than an annoyance: They are costing the Freeport retailer business and have led to an expensive cross-country legal battle. Bean is involved in a lawsuit with Gator.com Corp., a California company that manufacturers adware - programs that are designed to provide Internet users with pop-up advertising about products and services that might interest them, based on the Web sites they visit. In Bean's case, Gator.com's adware caused some customers who called up llbean.com to be greeted by a pop-up ad offering a discount at eddiebauer.com, a direct competitor. "It really is poaching, and we consider it to be parasitic behavior," said Rich Donaldson, a Bean spokesman. Two years ago, Bean sent a letter asking the company, a subsidiary of Claria Corp., to stop using the pop-up ads when computer users went to the Bean site. Gator.com responded by asking a federal court to rule that the company is within its rights to provide the ads to customers who use its Ewallet software, which automatically fills out Web order forms and saves password and credit card information for consumers in return for generating pop-up ads from time to time. The court fight is tied up in a jurisdictional dispute which, by itself, raises thorny questions for Bean. A three-judge panel for the 9th Circuit Court of Appeals said Bean can be sued in a California federal court, even though the company has no physical facilities in the state. That ruling could open up Bean and other Internet retailers to suits in courts around the country for the first time. The ruling, which will be reviewed by the full appeals court, said Bean does substantial business in California through its Web site, a decision that expands jurisdiction to include Internet activity in deciding whether a company is actively engaging in commerce in a particular geographic area. Bean is fighting the jurisdiction ruling but is more interested in curtailing Claria's and Gator.com's activities, Donaldson said. Donaldson said Bean was alerted to the pop-up ads three years ago when a customer told the company it found the offers offensive. Bean mailed the letter asking Claria and Gator.com to stop the pop-up ads, saying they "appropriated the goodwill associated with L.L. Bean's famous trademark," created confusion for consumers and suggested that there was a connection between Bean, Bauer and Gator.com. Bean also contacted Bauer, which told Gator.com to remove the ads. Gator.com, however, went to court seeking a ruling that none of Bean's allegations were true. Representatives of the company did not immediately respond to requests for an interview. "They fired the first shot here in litigation, and we have since come to learn that litigation is what they do," Donaldson said. "They expect to have a need to litigate, and they do it on a pre-emptive basis." Claria's interest in aggressively protecting its turf is understandable, given that adware marketing is a growing part of the online advertising market, industry observers said. Adware refers to any program that calls up ads based on either a user's history of Web sites visited or a user's visit to a specific site identified on behalf of an adware provider's client. Nate Elliott, an associate analyst with Jupiter Research, a consulting and research firm, said a survey of marketing firms found that 10 percent used adware last year and 16 percent expect to use it this year. Because it's tied to a user's interests, Elliott said, adware has proven to be more effective than ads on a Web page or a pop-up ad that the host site has authorized. He said the ads triggered by a user's history are considered behavioral marketing. For instance, if a user visits a lot of sites on soccer, he or she might get an ad from a sporting goods site, regardless of whether the soccer site is selling anything. The other type of ad is called contextual and is tied to a specific site. For instance, the Bauer ad popped up because the software was programmed to trigger it when the Bean site was called up. A visit to a national park site might not trigger the pop-up ad, however. "The stuff that people get most upset about is the contextual marketing," Elliott said, because it seems as if someone knows exactly what you are reading. But, he added, "the marketers tend to really love what these pop-ups do" and the early research suggests they are among the most effective online ads. Claria is considered one of the more reputable behavioral marketing firms, he said, because they are up-front in warning consumers that the software they download contains programs to generate pop-up ads. They warn the user about the adware several times during the installation, Elliott said, clearly identify the ads themselves as coming from Claria or Gator.com, and provide a way for consumers to uninstall the software fairly easily. Many other adware marketers try to disguise the programs, don't disclose where the ads are coming from, or make it hard for computer users to get rid of the programs, he said. Even with warnings and disclosure, however, some consumers aren't aware that they're using adware, Elliott said. "Consumers don't always see these things and don't always read what goes on in the install process" and just click their way through, he said. "It's a fact that consumers don't often know where these ads are coming from." Because of that and concerns about a consumer backlash, some marketing firms and advertisers have adopted policies that bar the use of pop-ups generated by adware, Elliott said, which may inhibit the growth of the industry segment. Nonetheless, Bean plans to keep fighting, Donaldson said. "We feel, in principle, it's a trademark infringement and, if left unchecked, it does pose a considerable threat to the value of our brand and how people feel about our brand," Donaldson said. "We are as concerned about the damage to the image of L.L. Bean as we are lost sales." Donaldson said the adware pop-up ads could erase years of work to assure consumers that Web sites are secure and safe. "It's taken a number of years for customers to feel that there are retailers out there that respect their privacy and build a secure Web site," he said. The pop-ups that aren't authorized by the site, Donaldson said, "all of a sudden gives people a creepy feeling."
Why would any other company, like Bauer, want to be associated with Gator?
Only after midnight during the summer.
scumware
If people wouldn't pay them for this kind of pop-up crap they would be history.
Personally, my netscape pop-up blocker does a great job. I also keep my computer clean with Spy-bot S&D, and Ad-Aware by lavasoft.
I don't understand why people bother to spend money on advertising that makes people angry. It's counter productive.
Agree..they really do.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.