The Bright Line Between Adware and Behavioral Targeting

Joanna Glasner of Wired wrote a piece where she states that behavioral marketing is “a growing niche in the online advertising industry focused on targeting promotional messages to an individual’s online activities. Some might call such tracking across websites by a less flattering name: adware.”

She is absolutely wrong in defining all behavioral targeting as adware. There is a bright line separating these two concepts.

Let’s take Wikipedia’s definition of adware: “any software application in which advertisements are displayed while the program is running.” Fundamental to this concept is that a user has (often misknowingly) installed a software application and is being presented with ads that are not supporting any content. Again, with adware, users have an executable program running on their machines at all times (as the apps are dropped into the start-up routine). And they are randomly being subjected to pop-up ads which are not correlated to any valuable content or otherwise to the consumer. (I should mention that from here, there is a slippery slope into other types of ‘ware, like spyware and malware.)

In contrast, legitimate behavioral targeting involves ads or services served in conjunction to valuable content. It does not utilize any executable files on the user’s desktop, but instead uses innocuous cookies technology. The result is more relevant banner ads on the sites you are already surfing and more appropriate recommendations on e-commerce sites where you are already a customer. It is not random and intrusive pop-ups.

So while adware and legitimate behavioral targeting both serve advertisements based on users’ past behaviors, that’s where the similarities end. To mention companies like Choicestream and Amazon in the same breath as a rouge company like Claria is fundamentally wrong. It looks like the PR departments of companies like Claria and WhenU have done a good job of confusing the press about the difference. But underneath their new costumes, adware companies are still the same, and are in turn damaging the reputation of legitimate behavioral marketing services.

David Beisel

David Beisel is a co-founder and Partner at NextView Ventures. He has been focused on early stage Internet startups his entire career, both as an entrepreneur and venture capitalist. As an investor in the digital media space, David was most recently a Vice President at Venrock and previously a Principal at Masthead Venture Partners. Prior to becoming a venture capitalist, David co-founded Sombasa Media, an e-mail marketing company best known for its flagship product BargainDog. Sombasa was successfully acquired by About.com where David served as Vice President of Marketing. David holds an MBA from the Stanford Graduate School of Business and an AB in Economics, magna cum laude and Phi Beta Kappa, from Duke University. He also founded and leads the Boston Innovators Group, an organization which holds quarterly entrepreneur events drawing a thousand attendees.

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