For WhenU, the Time May Be Now

When he came on board as head of the WhenU behavioral ad network in October 2004, CEO Bill Day took on dual roles. Within his company, he has served as a new broom that swept out many of the practices that had earned WhenU a reputation as an adware scam factory, conducting drive-by downloads to users’ browsers and serving pop-ups and other ads without permission.

At the same time, outside WhenU’s walls, Day was loudly evangelizing the marketing potential of what adware was doing, even while reforming its abusive methods. At conferences and in articles, he expressed staunch belief in the value of inferring user interest from their online behavior—the sites they visited, the content they viewed, and the ads they clicked on.

“My point was that you can be in the behavioral space and behave,” he says.

Almost two years after Day started cleaning house at WhenU, that belief has earned third-party validation. Earlier this month TRUSTe, the non-profit organization that certifies the security of Web portals and e-mail traffic, announced the first names in its Trusted Download program. WhenU’s Save and SaveNow applications made the list, along with seven other application downloads from Vomba Network, Camshare LLC, Coupons Inc., Crawler LLC, Tacit Software and NeoEdge. Other downloads are still being considered for addition to the TRUSTe program, still in a beta test mode.

The Trusted Download program certifies that independent technicians sponsored by TRUSTe have examined the ad-serving or behavior-tracking app and approved its practices in some key areas. These include obtaining user consent before downloading, operating on a computer or browser without affecting machine performance or changing settings, labeling any ads served with the name of the software and making it easy for users to uninstall the software if they choose.

TRUSTe’s aim is to give software providers a strong market incentive to get their programs onto this whitelist. That clout should come from Trusted Download’s roster of Internet sponsors, which includes such heavyweights as AOL, CNET Networks, Microsoft, Verizon and Yahoo! While Google’s name is not on that list, TRUSTe executive director Fran Maier said in a blog post that the company did contribute provisions to Trusted Download’s program requirements.

Another post to the TRUSTe blog detailed some of the steps involved in certifying just the primary user notice portion of WhenU’s software. TRUSTe director of product development Colin O’Malley said his agency looked at such elements as the clarity of WhenU’s description of what the software does and what types of ads it will display. Requiring a positive opt-in before download was another consideration; TRUSTe found that some WhenU consent pages either required an opt-out or defaulted to the “I Accept” option, so that users who hurried past those pages might be giving consent without realizing it. The agency worked with WhenU to change those pages.

TDP certification also requires that adware get specific about when ads will be displayed. In WhenU’s case, the company added a disclosure that “While you are browsing online, our software will show you pop-up advertisements…related to Web-browsing activity.”

“This provides sufficient specificity to set user expectations and equips the user to make an informed decision about the value exchange they [sic] are agreeing to,” O’Malley writes.

The WhenU apps that won TRUSTe approval are bundled with other software from WhenU partners that gives users free ad-supported multimedia players, games, screen savers and other applications they want.

Day points out that WhenU has exceeded TRUSTe’s requirements in some areas, such as including a toll-free phone number on all its ads that users can call if they have issues with the ads or encounter problems uninstalling the software.

“This stuff is not rocket science,” Day says. “These measures are readily available.” Eventually, after TDP approvals still in the works are processed, advertisers will be able to assume that companies not on TRUSTe’s whitelist have actively chosen not to add those user safety measures.

At that point, marketers should start voting with their dollars to support the behavioral ad platforms that have earned TRUSTe’s trust. “We’ve seen advertisers buying placement indiscriminately in the past,” Day says. “You can argue that they should have done their homework, but the homework’s hard to do.”

Just last January, three large Web advertisers—Priceline.com, Travelocity.com and Cingular Wireless—settled charges of alleged adware use brought by the state of New York’s Internet Bureau. The settlement involved both fines and an agreement to stop advertising via the behavioral network run by Direct Revenue; the companies were also enjoined to investigate how any future behavioral ads are delivered, and to do so every quarter they run those ads.

When the Trusted Download certification program starts gaining traction, Day says, marketers who have bought placement indiscriminately should begin to rein in their buying, while others who have shied away from behavioral targeting because of the adware stigma should be drawn back into the market. “It may take a little while, but we found a year and a half ago that the business of behavioral targeting still works for advertisers,” he says. “It’s more an issue of letting them buy with a clear conscience, so they can feel good about the company they’re working with.”

Once the problem of suspicious adware has been removed, Day believes behavioral targeting will continue to grow as an online marketing tool because it gives advertisers a chance to broaden their reach.

“Search is such a strong component of the online space and so attractive that it’s not crazy that it heated up first,” he concedes. “But it’s inevitable in the evolution of the Internet that marketers get interested in folks who were influenced by search but didn’t buy at that moment, and that’s where behavioral advertising really comes into play. I think we’re seeing a much broader acceptance of behavioral as a part of the marketing mix, along with search and display advertising.”

He points beyond WhenU and other former adware providers to integrated marketing companies such as Advertising.com that are incorporating behavioral data into their networks to let advertisers remarket to people who’ve searched for a product or service within 30 days.

The problem, Day says, is that behavioral data degrades in value much more quickly online than offline. “Behavioral has a very short half-life online—as little as 24 to 48 hours,” he says. “After 36 hours, different behavioral triggers become more valuable.”

That foreshortening makes long-term cookies a non-issue, because the behavior that triggered them is almost irrelevant a day and a half after it occurred. “Companies that specialize in those technologies will trumpet a 30% lift over having no data at all,” he says. “The problem is that using data in the first 24 hours could have produced a 300% lift.”

Instead of using long-term cookies, WhenU relies on rule sets that are pushed down to the user’s computer and analyze behavior on the fly. These rules says that if a user goes to this Web site or to this number of sites with a certain keyword frequency—say, “Luxury SUV”—then the WhenU network will push this specific ad.

Day says WhenU’s business model consciously limits the number of ad exposures per user per day, and that means constant optimizing to deliver the ads most relevant to the most recent behavior. Ads keyed to behavior more than two days old tend to drop out.

Advertisers get some guidance from WhenU about targeting ads to audiences and get full reporting about their response rates, but the network doesn’t reveal exactly how those ads are triggered or where they appear.

“The uniqueness of WhenU’s model is that we don’t capture and retain any data, so in many cases we don’t know where their ads are delivered,” he says. “We do know that for ads delivered by WhenU’s system, the response rate looks like x. We don’t capture where they went; we capture how many ads were delivered, how many clicks were produced, and figure the clickthrough rate from those metrics.”

“The value there is that it preserves users’ privacy so that anything they do online stays on their computer. We’ve always thought that was more important than being able to gather a broader data stream either for internal analysis or sharing with our advertising partners.”

Day says the blind nature of the WhenU network hasn’t been an issue for marketers. “So far protecting privacy has overcome any concerns about not having access to the data. That’s what has helped us with the TRUSTe certification process. I think if we’re thoughtful about privacy and work for advertisers from an ROI standpoint, they’ll remain happy with that.”

Day admits that behavioral ad targeting has been held back in recent years by the specter of spyware and the avoidance of the kind of alleged improprieties that led Priceline.com and the others to settle with New York State.

He says the Trusted Download program should help behavioral networks like WhenU in two main ways. First, connections with software providers among the program sponsors—companies like Microsoft or CNET’s Download.com site —hold out the prospect of ad-supported software downloads for users.

“The ability for WhenU to work with a huge source of software like that would be very beneficial,” he says. “We’re an eBay type of business where the bigger we get, the more inventory we can sell to advertisers. It’s a self-reinforcing model, and we hope that bodes well for us this year.”

But outside potential alliances with big software suppliers, Day believes the TRUSTe certification for ad applications from WhenU and the other trusted downloads should help behavioral ads win their due in the marketing community.

“People will realize that behavioral is much bigger than they thought, and it will get more ingrained into the ad-buying process,’ he says. “I’ve seen estimates that it will be a $5 billion spend next year out of an overall Internet advertising budget of about $25 billion. So it should make up, not a majority but a material portion of the total online ad spend.”