Despite a flurry of legal activity surrounding adware and spyware, WhenU and Claria's business models are catching on in the search space. On Wednesday, Bellevue, Wash.-based 180solutions Inc.
launched a new adware product that serves ads over search engines' results pages. The product, called Zango, is a software application that consumers download in order to gain access to premium
content--primarily on entertainment, music, and humor Web sites targeting 18-to-34-year-olds.
Company executives claim to have 30 million users of the software. Downloading Zango is the tradeoff
for receiving free content from its publishing affiliates; the software serves users 2-3 ads, on average, per day.
As consumers shop or search for content online, Zango automatically brings them
to Web pages it has matched a search query to. The program uses the same search term and the same search engine in generating the result, but immediately brings the user to the most targeted content
page, rather than a list of search results. Often, the application will bring users to Web sites that either do not appear in traditional listings, or appear but do not deliver users to the most
targeted page on an advertiser's site.
Like paid search, Zango's 6,000 advertisers bid for placement to reach its 30 million consumers. However, since placement is at a premium, ranking first is
tantamount to a single impression in the Zango ad model, which is powered by its MetricsDirect service. Ranking first is also equivalent to a click-through, since users are automatically brought to
the targeted Web page following a search query.
Zango boasts that its cost-per-visitor (CPV) platform, the MetricsDirect term for each winning ad impression, is far less than the cost-per-click
of most search placement services. This is mostly because Zango's advertiser base is lower, and so bids are less competitive--something that will change according to Zango's market performance for
advertisers.
Loanbright.com is an online mortgage service that uses Google, Yahoo!'s Overture, and FindWhat, as well as Zango. Chris Minott, director of interactive marketing for LoanBright, says
that the cost-per-acquisition with MetricsDirect "has always been the best, or one of the top three." While Minott concedes that the price for advertising with MetricsDirect has increased, it has
not been as drastic an increase as Overture, which he says has tripled since he started working with the paid inclusion provider. Advertisers that use MetricsDirect include Alaska Airlines, Spirit
Airlines, Las Vegas Hotel Group, and eBay; Aquantive's Avenue A has also worked with the model.
Zango, which recently escaped bankruptcy thanks to a healthy $40-million dose of venture capital
financing, will announce 17 new content partnerships on April 8, including humor sites JibJab and Boneland.com, as well as the music site for rapper Sir-Mix-A-Lot. Zango's effort underscores a push by
smaller adware companies to carve out a distinct niche for themselves in a rapidly consolidating marketplace. Zango's affiliate network focuses on younger-skewing entertainment and music Web sites.
Keith Smith, 180solutions' founder and CEO, says partnering with smaller entertainment sites makes sense "because the bulk of banner ad campaigns don't pay off, and there's usually not enough
premium content to merit a subscription service."
Smith further notes that 180solutions is sensitive to the controversy surrounding adware and spyware. He says his company steers clear of any
questionable spyware activity by showing users a clear opt-in message, an easy-to-follow option to uninstall, and a frequency cap on ads served. Smith says that 180solutions doesn't have the
inventory to serve ads beyond 2-3 times per user, per day, and any more than that is intrusive. However, users who frequently comparison shop will see more than three ads per day, while most will see
less than one per day. Smith says 180solutions doesn't ask for any personal data, a practice commonly deployed by spyware companies.
The Zango service, in addition to serving users targeted search
placement ads, also stands alone as a search engine for its users.