A Blog by Jonathan Low

 

Oct 29, 2012

Who Controls the Ads That Appear on Websites? Maybe Neither the Site or the Advertiser

Control? What does that even MEAN anymore?

High frequency traders buy and sell ahead of the market, NGOs intervene to alter corporate strategic plans, governments change policies, extreme weather disrupts the best-laid plans of careful, earnest managers.

And most of those exampled do not even begin to consider the internet.

As a culture, we appear to have accepted, if not always embraced, the relative anarchy of the web because, well, we benefit from it. Someone may offer a better deal, someone may provide us with 'news we can use,' someone may share data that isnt theirs. But hey, it's out there for the taking - and everyone else is doing it...

The problem, of course, is that one person's benefit is not infrequently someone else's pain. As in lost revenue, profit, customer, opportunity cost or investment. The latest manifestation of this mentality is a company that is challenging the notion that websites legally own or control the content that appears under their heading.

A company called Sambreel has used deceptive pitches (oh no, not on the internet!!!) to inveigle the unwary to download its software which then shifts or substitutes ad placements, affecting those that paid a website expecting a certain place or outcome but finding they have been supplanted. This costs both the advertiser and the host. But Sambreel claims its activities are legal and has been aggressive in defending itself.

The issue is not so much Sambreel and its software, but the larger question of who owns what on the web. Most people, including the website owners and advertisers evidently believed that all of this had already been addressed and incorporated into legal standards. The fact that lawyers are urging the federal government to get involved does not, however, enhance one's confidence in the underlying legal doctrine.

The implication is that once again, too many people have assumed the internet is simply a flickering screen-based alternative to the reality with which they have grown up. But they are learning, the hard way, that nothing about it is that simple. JL

Jeff Roberts reports in Paid Content:
Do publishers have the right to control the ads that appear on their websites? A controversial company doesn’t think so and has been injecting billions of unauthorized ads into websites like AOL, the BBC and the New York Times. The company, Sambreel Holdings, first made news a year ago for hijacking ads on Google and Facebook. Its aggressive tactics drain revenue from the companies and confuse consumers, many of whom are unaware when Sambreel installs itself on their computer. And now the company is spreading quickly and threatening to cause havoc in the online ad market.

How it works
Sambreel, on the surface, offers programs with names like Page Rage or Drop Down Deals that promise to improve consumers’ web surfing experience by customizing web pages or providing special deals. The real purpose of these programs, however, is to serve as vehicles for injecting adware that replaces publishers’ ads with those served by Sambreel.

The result is that consumers see Sambreel has pushed a premium Louis Vuitton ad further down the New York Times homepage and replaced it with an ad for something called “Pickle.” In the second, a prime CNN ad has been replaced by an ad served by a Sambreel browser extension called BuzzDock.

The publishing executive, who did not wish to be identified, said that Sambreel’s activities are rattling the online ad industry. In particular, he said, the injected ads deprive publishers of revenue while also distorting prices. For example, a brand may be pleasantly surprised that a YouTube ad that ordinarily costs $10 a click is now available for $3 (without realizing that Sambreel, not Google, gets the revenue).

New York Times spokesperson, Eileen Murphy, provided the following statement:

“Buzzdock’s adware technology alters the display of nytimes.com pages by inserting advertisements sold by Buzzdock directly onto those pages. Buzzdock collects all of the revenue from these ads; The Times does not see a dime. This is a fundamentally unfair business practice that is predicated on manipulating the user experience of nytimes.com, and we are exploring how best to bring it to an end.”

How widespread?
The publishing executive claims that Sambreel’s activities are serious enough to have depressed his company’s most recent earnings result. But such claims are hard to verify since it’s not possible to tell how many computers contain the ad-serving software. Sambreel did not respond to requests for comment.

At first glance, it seems unlikely that Sambreel is pervasive enough to affect the ad industry. After all, how many people are going to download junky browser plug-ins? On the other hand, Sambreel’s reported use of underhanded tactics could mean it is indeed widespread.

In a lawsuit filed in September, for instance, rental car company Hertz claims that Sambreel is bundling its adware with Pokemon video games, meaning customers are often unaware the software is even there. The Hertz lawsuit, which accuses Sambreel of injecting competing offers right when a customer makes a reservation, cites Sambreel’s own figure that claim more than 20 million “users” and that its ”products generated 158 billion advertising impressions” in the last quarter of 2011.

The allegations that Sambreel uses trickery to invade users’ computers is backed by Ben Edelman, a computer expert at Harvard Business School. Edelman says the adware is coming in through various bundles, including “trinkets” like the programs that promises to let you see “who has viewed you on Facebook.” The end result is the same — the user gets a junky product and adware that makes the computer run slower.

How to stop it?
Sambreel may be disturbing but it’s hardly the first time someone has tried to hijack publishers’ ad revenue. As Edelman points out, it was a decade ago that publishers sued ad nuisance Gator for taking over banner ads (the cases settled out of court).

This time around, people are pointing fingers at not just Sambreel but also at ad exchanges like Rubicon. In general, these exchanges provide a useful service for publishers by finding real-time buyers for unsold ad inventory. But in the case of Sambreel, both Edelman and the publishing source say ad exchanges are turning a blind eye to the company’s unethical practices. Rubicon did not respond to an initial request for comment. (Update: In a Monday email, Rubicon wrote to that it had previously terminated its relationship with Sambreel).

If the exchanges are complicit, they appear to breaching an ethical duty but not a legal one. That means that the publishers may have no choice but to sue Sambreel — which could prove a tall order.

The adware company has already adopted aggressive legal positions, including suing Facebook for antitrust last spring after the social network said it would ban any users who had Sambreel’s Page Rage on their machines. Facebook has moved to dismiss the suit, calling Sambreel a “parasitic free rider.”

Should publishers decide to join Hertz and sue Sambreel directly, they may have to find a creative way to do so. From a legal perspective, Sambreel is likely to argue that users can do what they like with their own computers — including stripping out ads. Hertz is trying to overcome this by invoking New Jersey business and computer security laws.

Ken Basin, an intellectual property attorney with Greenberg Glusker in LA, says publishers can invoke copyright or their terms of service to counter Sambreel. He also suggests that publishers should appeal the federal government to begin privacy inquiries into Sambreel.

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