AffiliateFairPlay has just released a case study looking at the impact of contextual adware advertising in and on affiliate marketing. Many may be surprised by the findings and it may challenge some of the preconceptions about contextual adware.

We attempted to give a broader view of this type of advertising. We focused our testing on top internet retailers. We looked at such things as how many merchants were having pop-ups delivered over their sites, who were placing the ads, to what degree were affiliates responsible for the pop-ups, how many pop-ups involved forced clicks (or cookie stuffing), which networks were involved and to what degree.

From the results, it seems to me that as an industry we are not adequately addressing the issues and practices related to this type of advertising.

The full report can be found here.

Over the last couple of months we have seen a surgence of a company called AdverLinkz targeting small to mid-sized merchants through Zango. They seem to be an “ad network” that will deliver “high quality traffic” for their clients. Although, the information on their site is sketchy and I didn’t see any actual place for advertisers to join. I do find it comforting that they don’t send any traffic from botnets like their competitors though. Yep, I’m rolling my eyes over here. From Whois information, AdverLinkz seems to be related to Focus Interactive Outsourcing Corporation. This may site where they recruit clients and AdverLinkz the site where they are running the Zango campaigns.

What I’m seeing is that they are targeting small to mid-size merchants to deliver a pop-up of a competing web site. I’m assuming these are their clients. They frame the merchant’s web site on the Adverlinkz domain. I’ve documented numerous cases of the AdverLinkz pop-ups through Zango. In every case so far, they are specifically targeting the shopping cart URL to deliver the pop-up. The pop-up either covers a majority of or completely covers the shopping cart page of the merchant being targeted.

The impact to the merchant being targeted is the end user may potentially leave their web site, resulting in an abandoned shopping cart and lost sale. If the end user initially came to the merchant via an affiliate link, then it could result in a lower EPC and conversion rate in their affiliate program. Affiliates could also potentiallly see a lower conversion for merchants being targeted, depending on how effective the pop-ups are being.

I suspect that many of the merchants who are appearing in the pop-ups have no idea how their sites are being promoted and “traffic” delivered to them by AdverLinkz. They also appear to be running a not so small ad budget with Zango. Again, I’ve documented numerous merchants being targeted and it’s not like I’ve been specifically looking for AdverLinkz pop-ups. In a recent test run I performed, they delivered a pop-up on 20% of the URLs I tested and accounted for 50% of the total pop-ups by Zango I recorded. It appears that they may have started this activity sometime in February, at least through the AdverLinkz domain.

I am reporting all instances found to Merchants of my Service. My recommendation to those merchants who find themselves being targeted is to contact the merchant displayed in the pop-up directly. I do suspect that many merchants being displayed in the pop-ups are unaware they are being promoted through adware. If you are a Merchant and are experiencing a decrease in your conversions, then you may want to investigate if your shopping cart is being targeted for this activity.

In these days of Internet marketing, everyone should be careful of from where and how companies deliver traffic. It is a good idea to always keep a close eye own your own server logs to determine traffic sources.

Are you paying people who are members of organized crime or political extremist groups? Are you financially supporting criminals? I posted back in February that this was a developing story. At last it is here. The recording of Wayne Porter and Chris Boyd’s presentation at RSA2007. As a Network, Merchant, Manager, OPM or Affiliate why should you care about botnets, let alone the security folks who are chasing them?

Because this Industry is helping to fund them, from the hackers who own the botnet rings and are installing scripts to fill out lead gen forms to the adware applications they are installing through the botnets. And the money trail can lead to some pretty unsavory places.   

Listen and watch the presentation.
Botnet Live: Tracing, Chasing and Building the Case to Bust the Bad Guys

Can we continue to remain complacent? Apathetic? Are the standards in the Industry how much money someone is making regardless of how it’s being made?

Go ahead take the time to watch the presentation. Be prepared to have an eye opening experience about some of the things going on out there.