Those Annoying Ads That Won't Go Away

You can't blame Garth Franklin for trying to make a living. But a year ago, when the 24-year-old from Sydney, Australia, started running ads for online casinos and cable descramblers on his popular movie-gossip Web site, DarkHorizons.com, torrents of e-mail poured in from his 300,000 readers. They complained that the "pop-up ads," which suddenly appeared in new windows on their screens, cluttered their desktops and slowed Net connections. Franklin, who's barely eked out a profit since he began six years ago, posted a response, insisting he needed the additional revenue to continue spending 10 hours a day on his labor of love. Today the grumbling e-mails are less harsh, and Franklin hopes readers are more willing to accept the intrusions.

Just how annoying can online advertising be? Nobody disputes they're obnoxious; the only question is one of degree. The ads are the Web equivalent of the telemarketer's phone call during dinner hour. Pop-ups are bad enough. But now you can't go online without being subjected to their evil cousin--pop-unders--which lurk below the browser until you close your main window. There's also a bursting ecosystem of newer ad formats: TV-style videos that play while sites are loading up, banner ads that stretch into full- page screens when you point the cursor at them and animations that float across your browser with the impertinence of a sibling who likes to stand in front of the TV. Users weaned in an ad-free online environment are crying foul, but Web publishers argue they're just trying to survive at a time when online-ad spending is plummeting.

Online ads used to be associated with the innocuous--and easily ignored--"banner," the rectangular box at the top of a Web site that transported you to the advertiser's site when, and if, you clicked on it. The problem for advertisers was, few people did. Then X10 came along. The Seattle-based maker of surveillance equipment single-handedly popularized (if you want to call it that) the pop-up and pop-under formats, serving up more than 1 billion ads in the first seven months of this year alone.

You probably know the spots: they pitch a $100 Net-connected video camera. While the ad's text claims the cameras can protect your home, the ad's photo brazenly luxuriates over a young female, implying the camera is a great way to follow Pamela and Tommy Lee into the annals of history. The ads are so ubiquitous that, in April, 38 percent of all Web users saw them, according to online-measurement firm AdRelevance.

In the few comments that the secretive company has made over the last year, X10 spokespeople claim the ads are wildly successful. So, not surprisingly, other advertisers are following its lead. A Nielsen/NetRatings survey released last month reported that 11.3 billion pop-up and pop-unders were launched in the first seven months of 2002. After X10, the biggest advertisers were travel site Orbitz and the credit-card lender Providian Financial. The survey also revealed pop-ups were only 2 percent of all online ads. But the fact remains they feel widespread to Net users, no doubt because they're so noticeable and sometimes baldly deceptive. One common ad, for example, masquerades as a security alert, telling users their PC is vulnerable to cyberattack. Other pop-ups employ a technique called mouse-trapping: when you try to close them, they spawn an avalanche of other ads that stage a hostile takeover of the desktop.

All this only exacerbates the problems that online advertising has. Big advertisers like Coca-Cola and McDonald's shy even farther away from a medium that, in terms of ads, increasingly resembles late-night cable TV and alienates consumers. And the big Web sites, desperate for cash in a lean environment, "are taking these deals while holding their noses," says Nick Nyhan, president of online-research company Dynamic Logic. But there is hope: a nascent revolt against pop-unders and their ilk. In July, women's site iVillage surveyed its members and found that 90 percent reviled the ads, so the company announced it would no longer run them. Google did the same thing, proclaiming on its site, "We find them annoying." And in August, Earthlink, the country's third largest ISP, announced new "pop-up blocker" software that's available free to its subscribers. The software loads onto the browser and prevents new windows from opening up without the users' consent. A spokesperson says the number of downloads in the last month has "stretched well into six figures."

While those features make consumers happy, they lead to the basic economics question that's plagued the Web ever since it went commercial: what constitutes acceptable advertising on a relatively new medium that somehow has to be paid for? Just because the Web seemed to introduce business efficiencies didn't mean it repealed the laws of economics. Members of the online-ad community argue that in-your-face intrusiveness is actually key to all advertising--that's why commercials on TV are 30 percent louder than normal shows.

The real challenge, these ad proponents say, is to find an effective ad format that minimizes consumer backlash. Dick Hopple of Unicast, a company that provides Web ads, argues the solution is full-page TV-style video that his company calls a Superstitial. While the ad is clearly intrusive, Hopple points out that it tries to minimize the burden on the viewer, loading when bandwidth isn't fully utilized, and playing when a user jumps from one Web page to another. Other companies are exploring new ad technologies (graphic). But they might not get very far until they can all agree on a single standard for ad formats. Today, says AdRelevance vice president Charlie Buchwalter, sites like Yahoo, MSN and AOL all take different types of online ads, programmed in different languages. As a result, he says, "If a large spender wants to make a $20 million buy on TV, they can do it with a 15-minute phone call. But on the Net it might take three months."

After they work out that issue, advertisers will have to address the thornier fact that unlike TV or newspapers, many consumers believe they own the space on their desktops and are averse to any ads on them. When those attitudes change, Web sites might finally start to attract the Coca-Colas of the world--and can turn away X10 and its tackier compatriots.