The Contextual Platform (Spyware, Scumware) Issue, and how it affects Affiliates, Merchants, Networks, and others.

I have just written the following e-mail to Benjamin Edelman, who is pushing forward on understanding the contexual (the scumware, spyware issue - not ppc contextual):

"Your site has some amazing information. I can see myself spending a long time on it, both today and in the future. I have also been following the contextual players for some time now, and truly believe that most players in the market (networks, merchants etc), don’t understand what is really happening. <>I think they believe that the issue is contextual related (popping windows over competitors through keyword or url targeting), as that is what the mainstream publicity is all about (especially since it is similar to the cases google is currently involved in for keyword infringement).

However, I don't think many participants in the industry understand how cookies are being overwritten, by so many different methods (either via software preinstalled on the computer with multiple cookies, or via cookie overwriting or other methods).

Great site!
Eric "

I have spent the last few hours exploring the net for related articles, and it seems that there are a number of individuals trying to understand the issue better, but no-one really has got the full picture.

So here goes my understanding...

1. Contextual Search and Contextual scumware / spyware are different beasts entirely
Contextual search involves placing relevant paid listings on sites other than the primary search site by matching the content of the page with relevant paid advertisements by advertisers.

2. Contextual Platforms (from now on called CP) involved placing software on the users machines, when the download certain applications. Examples of these are screensavers, peer to peer music software (napster, kazaa), free software and a host of other applications. Often the applications themselves are not the "adware" component, but at the same time as downloading the application in the Terms and Conditions, you give permission to also install the "adware" software on your computer. Many times these other applications are included in the T&C's so deep down, that you don't get to see them. It has been mentioned that particular applications have T&C's up to 60 pages in length. What normal person reads through 60 pages of T&C's when downloading a program (i'm surprised when i hear people read the T&C's at all!)

3. Some Adware gets onto your computer through more dubious methods, such as security loopholes in your computer - so for example, you go to a particular site, and it automatically installs adware on your computer, without you giving permission.

4. The mainstream press at the moment is interested in the court cases which involve the branding issue and the CP companies. There are 2 ways the CP companies use the software pre-installed on your computer to market companies:
a. If you go to a search engine and type in a particular keyword, the software on your computer, will pop up an advert for a competitor of that keyword. So for example, you would go to Google, and type in Expedia, and the software on your computer (which you gave permission to sit on your computer), pops an advert for Travelocity (just an example - i don't know if either of them use contextual)
b. The CP will have a list of URL's for a particular industry, and will pop a competitor ad if you go to that URL. So to continue the above FICTIONAL example, if you go to Expedia's website (www.Expedia.com), then the software on your computer will pop an advert for Travelocity.
Often these adverts are not banners, but the entire site of the advertiser. So the traffic is highly targetted, as the user was searching for that particular item, and thus the conversions are good.

5. It is controversial, because of 2 reasons:
a. The users often don't realise they are giving permission to have "adware" installed on their computer.
b. There is a trademark infringement debate (similar to the Google paid listing trademark infringement debate). As most of you are probably aware, Google recently WON the trademark case against GEICO.

6. The real "dodge" element is far more difficult to understand. What happens is that certain applications on your computer are either installing mass cookies or rewriting cookies. Let me explain.

7. What happens in the affiliate marketing world is the following process:
a. A merchant will either have a stand alone affiliate program, or place their affiliate program on an affiliate network - the big ones such as CJ, Linkshare, Performics and a number of others have been named in the press recently as some of the large affiliate networks.
b. The affiliate (the CP) will register with the networks as affiliates (often through many accounts to spread the traffic and conversions).
c. Their are many ways the CP can manipulate the traffic. Here are some examples:
1. A visitor clicks on an affiliate link somewhere (can be anwhere). If that visitor has software installed from the CP on their computers, the site that the visitor clicks on, should get the credit for sending the traffic to the merchant, but the CP gets the software to replace the affiliate ID with the CP's ID - thus the visitors which are being sent to the merchants sites are being sent by REAL affiliates, and are being replaced by the CP affiliate links.
2. This is the most disturbing ==> The CP's don't overwrite a specific cookie. They simply pre-install cookies on the computer owners machine. Thus whatever traffic the merchant gets to their website, no matter if it is affiliate traffic, bought media, or direct type'in's, the cookie will show the visitor as having been sent from the CP's affiliate link!!!!
3. There are various other methods, which I'll get to in a later follow up article.

8. Why isn't more being done about this? There are a number of reasons I can think of, and which have already been discussed in various other forums:
1. The issue is difficult to understand, and complex, and many merchants simply don't understand what is happening.
2. It has been highlighted that the affiliate networks get their commission via a percentage of the affiliate payments (they usually charge 25% to 35% to the merchant, of what the affliate gets paid). So they're not overly concerned about which affiliate gets the credit, and if an affiliate gets credit, although it really shouldn't have been attributed to affiliate traffic, well, they simply earn more!
3. I read on one of the forums earlier an interesing thought, that the program managers, and affiliate managers get bonus's based on the success of the programs, and thus they will be happier with more volume and transactions through the affiliate side, rather than less.

9. So who is suffering? The genuine affiliates whose links are being overwritten, and the merchants who are paying for more traffic than they should be. (as they are paying for affiliate transactions, even through the traffic isn't affiliate traffic).

So where to from here? Well, in the months and years to come, education of merchants, affiliates, networks, and other players, together with legalities should result in changes in the industry.

For the time being, it's the Wild West out there!

E