November 24, 2003 4:00 AM PST

New IE may burst pop-up bubble

Pop-up advertisements have thrived for years despite numerous efforts to eradicate them, but now online marketers are seriously wondering whether the Web's most detested ad format is about to meet its match: Microsoft.

The Redmond, Wash.-based software giant recently indicated that it will add pop-up blocking features to Internet Explorer (IE) next year, as part of an update for Windows XP. Others have offered similar tools before, but because IE so thoroughly dominates the browser market, ad executives and Internet watchers believe the changes could finally burst the bubble for pop-ups.

News.context

What's new:
Microsoft plans to add pop-up blocking features to Internet Explorer next year.

Bottom line:
Web surfers likely will see fewer pop-up ads, meaning that advertisers will have to develop workarounds or adopt less-invasive alternatives to a format that they've found to be economical and highly effective.

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"If Microsoft does it right," said Richard Smith, a well-known security and privacy expert, "I think we will see a big drop in the use of pop-ups."

Fearing that they might lose one of their most effective advertising tools, some publishers and advertisers are developing methods to get around pop-up blockers and still deliver their ads. But rather than fight, many advertisers that have come to rely on pop-ups are bracing for a sea change that could force them to abandon one of their most effective marketing formats.

Pop-up advertisements came into vogue during the Internet bust, when online advertising couldn't bring home the bacon for Net publishers. Publishers could serve as many pop-up windows as they wanted for pennies because they didn't take up any room on the page. There was an economic incentive to peddle more ads, too, because marketers paid based on how often Web surfers responded to their pitches, or what's called "customer conversions." The more conversions, the more ad dollars.

As a result, marketers were drawn to pop-ups because they're economical and effective--they grab Web surfers' attention like no other online ad. Pop-ups are 13 times more effective than banner ads that run the length of a page, according to research from Advertising.com published earlier this year.

That's helped push sales. From August to October, publishers delivered about 19.6 billion pop-up and pop-under ads to Web surfers, out of a total of 266.4 billion online ads served during the period, according to Nielsen/NetRatings.

But as the ads have caught on, Web surfers have cried foul. A majority of Internet users say the ads are disruptive to their surfing, according to surveys.

Ads that open a browser window in front of or behind an open Web page--known as pop-ups and pop-unders, respectively--have become target practice for many major Internet service providers (ISPs) and browser makers in recent years as they've proliferated online and consumer complaints have peaked.

Pop go the pop-ups
EarthLink started a trend among ISPs two years ago by offering its service as a litter-free zone that helps consumers block spam, pop-ups and viruses. America Online followed, with promises not to sell the ads to third parties and to greatly limit its own in-house advertising. Google and Yahoo recently embedded anti-pop-up features in their toolbars and Yahoo will incorporate similar features into its high-speed Internet package with SBC Communications.

Many people use Google's Toolbar to block out the unwanted ads. The company has said that "millions" of people have downloaded its toolbar with pop-up blocking features. Google and other search providers such as Yahoo are eager to let people block pop-ups because they will benefit from the shift in advertising dollars to contextual ads. Also, by making their search toolbar resident on the user's browser, they drive traffic to their own site.

Those efforts will get a substantial boost when Microsoft adds a pop-up blocker to IE. Global usage share of the latest version on Microsoft's browser, IE 6.0, is at 66.3 percent, according to market researcher OneStat. Microsoft also plans to introduce a pop-up guard within its MSN Premium and Plus Internet access services, to be launched later this winter. Despite this, the company still sells pop-up advertisements that appear on its MSN network.

Mark Ryan, a senior analyst at Jupiter Research, estimates that as many as 20 percent of Web surfers have installed anti-pop-up software, and that the number will be as high as 25 percent by the end of the year.

"That number could increase dramatically if you give the average consumer" a way to block the ads within IE, Ryan said.

Despite the efforts of ISPs, software makers and publishers against pop-ups, advertisers just keep on buying them. From April to June, pop-up and pop-under advertisements made up 3 percent of all online ads. But in the following three months, they made up 7.4 percent, according to market research from Nielsen/NetRatings.

The rise was in part due to the zealousness of a few advertisers such as Orbitz. In the third quarter of this year, its pop-under advertising accounted for 14 percent of the total ads, versus 4 percent from the same period a year before.

Orbitz, the biggest pop-under advertiser on the Internet, would not comment for the story because it said it was not aware of upcoming changes to IE. But it said that it evaluates its advertising mix all the time and that its pop-unders are effective.

Blocking the blockers
Technically, publishers deliver pop-up windows by writing a command into their Web page that's triggered when a visitor requests it. That command is sent to the browser to launch an additional window, and it typically redirects to an ad server to deliver an image. Pop-up blockers work by simply looking for that command and blocking those windows. Because of the black-and-white nature of pop-up blocking, some legitimate windows can be blocked too. That's why several anti-pop-up tools let people create "white lists" of Web sites they want to accept the windows from.

Browser-based ad blockers are not always effective in stopping pop-ups delivered through "adware" programs, which may come attached to free downloads for trading computer files over the Net, among other things. People who have installed adware programs from companies such as Claria (formerly Gator) and WhenU.com will likely continue to receive pop-ups or pop-unders despite browser blocking technology because these programs reside on the PC, and generally operate independently of the browser.

At the latest gathering of the Interactive Advertising Bureau, at least a few Net publishers discussed ways to withhold their content from visitors that were using pop-up blockers, Jupiter's Ryan said. Sites that set tracking technology called cookies onto visitors' desktops can detect that the visitor is using a pop-up blocker, for example. If the blocker is detected, they could prevent that person from viewing their content.

Some publishers have also devised ways of compiling that command into code within the page, prompting it to launch later or to appear as a Microsoft browser window rather than an ad. They do this by writing the command in JavaScript or Dynamic HTML (Hypertext Markup Language) within the Web page.

Online advertising experts said they don't expect elaborate workarounds to win a widespread following, particularly among mainstream advertisers who buy the lion's share of online ads.

"It's not sexy and it's not easy, and probably causes more broken images on a page than anything else," said Chris Saridakis, cofounder of DoubleClick's technology unit and now the chief operating officer of online ad-banner company PointRoll. "Not many high-end advertisers will screw around with that."

Plan B
Web-based advertising technology providers seem to be preparing for the worst. DoubleClick, a major source for serving pop-up advertisements, said that it will rely on banners and rich-media ads if and when IE pop-up blocking becomes a standard feature.

"DoubleClick has a plan so that we can serve standard and rich-media ads--without interruption to service--on behalf of our clients," a company representative said.

PointRoll's Saridakis said that direct marketers such as casinos will be devastated by the ubiquity of pop-up blockers because they rely on those few people who do click on their ads. Roughly 60 of every 1,000 pop-ups or pop-unders result in clicks, he estimated.

Major brand advertisers will be less affected because they have already been moving away from the format, Saridakis said. He said ad agencies and Fortune 500 companies view it as the "anti-Christ" because of consumers' hatred of them. Response rates, although about three times better than those for banners, are often not worth the risk for big brands or publishers.

Gar Richlin, chief operating officer of Advertising.com, one of the Internet's biggest pop-up purveyors, lamented an inevitable loss of the format.

"That format is going to be lost, and right now we don?t see what's going to replace it," Richlin said. "It's an attention grabber and that's what advertising is all about."

He added that publishers are likely to acquiesce to the banishment of pop-ups.

"There's no question there's an absolute tension between the format and the population," he said. "There's nobody out there who's going to get in front of this train."

Makers of anti-pop-up software might also have to adapt their business models if people become accustomed to blocking ads within IE rather than looking to third-party software.

InterMute, the maker of free and paid ad-removing software AdSubtract, already plans to introduce new Internet ad-muting features. The company has said it will let people block commercial listings that appear within search results--a popular and growing form of online advertising. The feature, called Search Sanity, will be a part of its AdSubtract 3.0, downloadable software that sells for about $30 and is expected to launch in December.

"It's interesting how slowly the big media sites have reluctantly dragged themselves to the pop-up blocking party. It's about time," said InterMute CEO Ed English. "Users clearly are fed up with pop-ups and other types of overdone Internet advertising."

 

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