Background & Overview

What companies pay eXact Advertising to show their advertisements? The question has come to have considerable practical significance. For one, a number of companies have announced their refusal to do business with so-called "adware" firms that, like eXact Advertising, install software on users' PCs to cover web sites with ads for their competitors. (See statements by Major League Baseball, Verizon, and Wells Fargo.), For another, many users dislike these programs and their aggressive installation tactics, and may seek to avoid supporting merchants whose advertising budgets help support such programs.

For some of eXact's competitors, existing public sources provide information about advertisers. Claria's 2004 SEC S1 filing (page 52) provides an explicit listing of twenty of Claria's biggest advertisers during calendar year 2003. Although news reports and hands-on testing indicate that many of these advertisers have subsequently ceased using Claria, Claria's public filing provides at least an initial sense of who advertises on Claria. (In future work, I intend to extend my 2003 Gator Advertisers (partial) listing to report more Claria advertisers and to report current Claria advertisers.)

But it is harder to know who supports eXact Advertising. Having recently received $15 million from Technology Investment Capital Corp, eXact is unlikely to need further funding from capital markets in a way that would require public disclosures like Claria's S1. So those who want to know who supports eXact must conduct research for themselves.

Recent news reports indicate difficulties obtaining comments from companies advertising through programs like eXact:

• "Guess What -- You Asked For Those Pop-Up Ads," BusinessWeek. States that BusinessWeek contacted 26 major advertisers using adware, but that 18 declined to comment or did not return calls.
• "Pesky Pop-Up Ads Go Mainstream, As 'Adware' Gains Acceptance," Wall Street Journal (paid registration required). States that "many advertisers won't talk about their use of adware" and reports specific advertisers who used to use adware but no longer do, or who refused to discuss their advertising practices.

However, a few companies publicly admit to using adware to promote their products. See e.g. Thomas Cook's new ad campaign using Claria.

This article attempts to extend prior research by listing major and well-known current eXact Advertising advertisers, as well as by providing a comprehensive examination and classification of substantially all eXact advertisers and advertisements.

Some companies intentionally hire eXact to promote their products. But other companies are promoted by eXact without specifically requesting any relationship with eXact. Through so-called "affiliate programs," eXact receives commissions from hundreds of online merchants, often without those merchants understanding what eXact is doing and without those merchants specifically consenting to eXact's methods. Furthermore, my testing shows that eXact's software claims commissions from some merchants even when eXact has offered those merchants no business benefit, i.e. has performed no bona fide promotion of those merchants' products or services.

In my testing, eXact software often arrives on users' computers without informed consent or, in many cases, any consent at all. I previously posted a video showing eXact software installed through security holes, and I have observed such nonconsensual installations on numerous subsequent occasions. (Such installations stand in sharp contrast with eXact's claim of installing only with a user's "express consent.") Even when eXact software is obtained in ways that purport to entail user consent, eXact often does not show a license agreement, and eXact often fails to prominently disclose important characteristics of its behavior -- for example, emphasizing its purported potential for savings, but failing to mention its display of pop-up ads. (Screenshot.) Finally, certain eXact installations use methods likely to be particularly attractive to children, e.g. bundles with games. (Screenshot.)

Methodology

Consistent with the methodology explained in my prior articles about advertisement-display software (e.g. Documentation of Gator Advertisements and Targeting), I installed eXact Advertising software on a dedicated computer in my lab. Using a network monitor ("packet sniffer"), I watched eXact's transmissions over my Internet connection.

I observed that eXact retrieves a set of text files that include URLs to advertisements and trigger conditions (URL fragments and keywords). When a user requests a web page that includes one or more of these triggers in its URL, eXact may show a matching URL from its advertisement listing. The lines below show a section of the configuration file at issue. Note ad number (yellow highlighting), ad URL (green), and trigger conditions (red) referencing ad number (purple). Via the targeting instructions highlighted below, eXact shows a Chase credit card ad when users visit fool.com or getapproved.com, two other sites offering credit services.

[ad_data]
...
+,9856,http://oas-central.realmedia.com/RealMedia/ads/adstream_sx.ads/www.ap.com/chasegasfinance600/%rand%@x11, 1078808400,1117602000,4,1,10,14752828,49589,400,600::1,0,0,0,BullsEye Network Offer,0,0,0,BullsEye Network Offer,0
...

[match_rule]
...
+,623868,www.fool.com,100,1,9856
+,623869,getapproved.com,100,1,9856

I wrote software to iterate through eXact's configuration file, making a thumbnail of each ad as well as reporting the trigger conditions associated with each ad. For ads reached via redirects, I also attempted to retrieve and archive all intermediary URLs. Although these methods obtain most eXact ads, these methods omit certain ads that share "rotating" triggers, wherein eXact web server code randomizes between multiple ads shown under identical conditions.

All analysis is based on data collected in during the first week of March 2005.

Advertisement Listings

The images below reflect a small sample of eXact advertisements -- by advertisers who are particularly well-known and/or for products that are particularly well-known. See also additional thumbnails of advertisers that are particularly well-known.

The advertisers shown above include Air France, Apple, Chase, Cingular & Sony Ericsson, Circuit City, Dell, Expedia, Lamps Plus, Netflix, Thrifty, and Vonage.

I have attempted to classify eXact's advertisements by general field. This listing excludes eXact ads that are mere lists of sponsored links obtained from separate sponsored link search engines.

* For details on affiliate ads, including the significance of this term and its implications, see Affiliate Program Ads, below. Classification of ads' affiliate status is partially automated, based on characteristics including number and type of target criteria as well as ad URL format. However, some affiliate links are difficult to identify due to lack of distinctive URL characteristics or triggering methods. Interested readers should examine each ad individually to confirm its correct classification. Please send me possible misclassifications.

Beyond these merchants promoted through eXact ads, other merchants make payments to eXact via eXact's BargainBuddy cash-back program. See full list of BargainBuddy merchants and discussion.

Discussion   [ Targeting Competitors | Affiliate Program Ads | Intermediaries | Trustworthy Advertisers? | Response ]

Advertisement Targeting: Covering Competitors' Sites

The eXact advertisement directory includes extended instructions about advertisement targeting. In general, in my experience using eXact software and examining eXact's advertisement display rules, eXact ads cover competitors' sites. For example, eXact shows an Expedia ad when users visit cheaptickets.com, hotwire.com, hotels.com, and others. Similarly, eXact shows a ProFlowers ad when users visit ftd.com, kabloom.com, or 1800flowers.com. Beyond targeting competitors, some eXact ads may also be triggered by related products -- e.g. car rental ads covering an airline's site.

My advertisement listings report up to 25 target conditions for each ad shown by eXact.

Affiliate Program Ads

Many eXact advertisements include affiliate links. In simplest form, an affiliate link allows eXact to promote a merchant without that merchant's specific knowledge or consent. For example, anyone can sign up to promote Dell, and many merchants fail to carefully screen affiliate applicants. If eXact (or an eXact advertiser) signs up to promote Dell, eXact (or an eXact advertiser) can show popups that cause Dell to pay commissions to eXact (or an eXact advertiser) on users' subsequent purchases. As a result, Dell (or any other affiliate merchant) can find itself promoted by eXact -- and paying commissions to eXact -- even without specifically intending to do business with eXact. In addition, for promotions passing through an eXact advertiser or other intermediary, a merchant may find itself promoted by eXact without even having a direct relationship with eXact.

When eXact promotes a merchant via the merchant's affiliate links, eXact can promote that merchant via popups shown above competitors' sites. For example, McAfee VirusScan is promoted via LinkShare affiliate links that are invoked when users visit certain pages at f-secure.com, microsoft.com, and symantec.com. Under this scenario, the merchant (here, McAfee) realizes a potential business benefit: A user may make a purchase from McAfee as a result of receiving such an ad, where the user would otherwise have bought from Symantec. McAfee therefore pays an affiliate commission to eXact or an eXact advertiser, and this commission could be viewed as compensation for providing a bona fide lead as to a potential new customer. My advertisement listings report scores of affiliate advertisements targeting competitors in this way.

But eXact can also show users affiliate ads that match the merchants users have requested. For example, if a user visits Circuit City's site, eXact may show a popup or popunder invoking eXact's affiliate link to Circuit City. Because cookies are shared among all browser windows, and because affiliate tracking relies on cookies to allocate commission, eXact (or an eXact advertiser) then receives commission on the user's purchase from Circuit City -- whether the user makes such purchase through the initial merchant window or through the new eXact popup or popunder. This scenario is unlikely to offer the targeted merchant (here, Circuit City) any business benefit: Since the user had already arrived at the merchant's site, the merchant has no reason to pay a commission to eXact. Yet in my testing, eXact opens popups and popunders with precisely this effect. I have retained video proof of such targeting. See video (Windows Media format) showing Circuit City targeted in this way.

When eXact invokes affiliate links without an affirmative user click requesting such links, it performs "forced clicks" or "cookie-stuffing" analogous to what I have previously observed as to software from 180solutions. See also my June 2004 report of a Dell affiliate similarly using software on users' PCs (there, Claria) to show affiliate links.

I have observed eXact using affiliate links provided by all major affiliate networks, including Commission Junction, LinkShare, and TradeDoubler. Some of the affiliate links at issue have been disabled, but the overwhelming majority remain operational. However, the software I have written makes it easy to identify substantially all such links -- then making it particularly easy for an affiliate network to identify and/or disable such links.

Beyond eXact's BullsEye ads, which produce visible on-screen popups, eXact also offers a program called BargainBuddy, by which eXact invokes affiliate links and claims affiliate commissions without showing an on-screen popup. BargainBuddy is framed as offering users rebates on their purchases at participating retailers -- rebates funded by a portion of eXact's affiliate commission fees. But where users have not provided payment instructions to eXact, e.g. because eXact software was installed without consent, eXact apparently retains the affiliate commissions it receives. Users are likely to reject whatever efforts eXact may make to obtain users' addresses and other payment information, because where eXact software was installed nonconsensually, users are rightly hesitant to provide their personal information. Based on my analysis of BargainBuddy configuration files, eXact's BargainBuddy product claims commissions in 1,715 affiliate programs, including the programs of many major affiliate merchants. See full list of BargainBuddy merchants.

eXact's various actions seem to violate numerous affiliate network rules.

• Nonconsensual installations of eXact software seem to violate Commission Junction's Code of Conduct, prohibiting "invisible[] installations."
• eXact software sets affiliate cookies automatically, without users taking any specific action at the time of each such transaction. Setting cookies without a user click seems to violate Commission Junction's prohibition on "non end-user initiated events." It also seems to violate LinkShare's Technology Addendum requirement of "consent ... and prominent disclosure ... at the time of the transaction" ((1)(a)(iv)).
• Many eXact ads specifically target other affiliates' sites, seemingly in violation of Commission Junction's prohibition on "altering another publisher's site" and seemingly in violation of LinkShare's prohibition on programs "alter[ing] in any manner the ... experience at ... any Network Affiliate Webpage" ((1)(a)(i)).
• In my testing, eXact software often sets affiliate cookies even on traffic resulting from other affiliates' affiliate links to merchants. eXact thereby reduces commissions payable to such other affiliates, seemingly violating Commission Junction's prohibition against "interference with referrals" and seemingly violating LinkShare's prohibition on interference that "reduc[es] any compensation ... to a ... affiliate" (rule (1)(a)(ii)).

I have retained video proof of each of these types of possible violations, including some video and other proof dating back to mid-2004.

What could be done to address these problems? Affiliate networks could more diligently investigate possible violations of their own rules, and could eject apparent rule-breakers from their networks. (However, affiliate networks earn greater fees when their networks are larger, giving networks reduced incentives to punish rule-breakers.) Affiliate merchants could more diligently examine their affiliates' behavior -- making sure each affiliate has fairly earned its commissions before receiving payment. (However, some affiliate merchants' staff are paid according to the size of their affiliate programs, giving them reduced incentives to punish rule-breakers. In addition, many affiliate merchants' staff have little information about the true behaviors of their affiliates.)

Intermediaries Hosting eXact Ads

Affiliate networks are but one type of intermediary between eXact and advertisers. I have also observed eXact showing advertisements obtained from advertising servers operated by 24/7 Real Media, Atlas DMT (aQuantive), DoubleClick, and others.

Within my ad detail pages (as linked above), the "redirects to reach ad" section often reports intermediaries who provide ads to eXact. For example, ad #12757 within travel is a Priceline ad shown by eXact when users visit certain travel-related sites. When eXact displays that ad, eXact first loads a URL that begins http://oas-central.realmedia.com/RealMedia/ads/click_lx.ads/www.ap.com/Priceline.comfebio4155atv... . That URL in turn redirects users to http://ad.doubleclick.net/clk;13932146;10903973;e?http://www.priceline.com/hotels/lang/en-us/itinerary.asp?refid=PLEXACT&refclickid=hotels which in turn redirects users to Priceline content. Note that the first specified URL is a server operated by 24/7 Real Media, while the second is operated by DoubleClick. The traffic at issue thus passes through servers operated by both 24/7 and DoubleClick.

Trustworthy Advertisers?

Among the merchants supporting eXact (whether intentionally or not) are many big names in electronic commerce, including many companies that have criticized spyware, that claim to want to help stop the spyware problem, and that purport to be protective of user privacy. It is perhaps puzzling to see such companies advertising with eXact or paying commissions to eXact when eXact software has been shown to arrive on users' PCs without notice and consent, and when eXact goes on to track and profit from users' online activities and purchases.

TRUSTe purports to count as its members "the most trustworthy online businesses." However, when I cross-referenced the current TRUSTe Member List with a partial list of companies doing business with eXact, I found 85 matches. See TRUSTe members supporting eXact.

TRUSTe does not affirmatively certify that its members' marketing practices are ethical. But given TRUSTe's overall emphasis on trustworthiness, users may nonetheless expect that when TRUSTe issues a seal to a merchant, that merchant does not advertise with, profit from, or make payments to companies who install software on users' PCs and track users' subsequent behavior without notice or consent.

Responses from eXact and Its Advertisers

As discussed in the media coverage linked above, many advertisers hesitate to comment on their use of advertising from eXact or similar companies. Nonetheless, my hope is that my research will spur discussion with and among eXact advertisers and other business partners. In this section, I will post statements from eXact, advertisers, affiliate networks, advertising networks, or others.

Disclosures

My interest in spyware originally arose in part from a prior consulting engagement in which I served as an expert to parties adverse to Gator in litigation. See Washingtonpost.Newsweek Interactive Company, LLC, et al. v. the Gator Corporation. More recently, I have served as an expert or consultant to other parties adverse to spyware companies in litigation or contemplated litigation, and I have provided assistance to affiliate merchants who seek to avoid paying affiliate commissions in violation of applicable rules.

This page is my own work - created on my own, without approval by any client, without payment from any client.

Last Updated: March 14, 2005 - Sign up for notification of major updates and related work.