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Zango, formerly known as 180solutions, recently agreed to settle Federal Trade Commission charges that it used unfair and deceptive methods to distribute adware. Founder and CEO Keith Smith stopped by InformationWeek to talk about his reformed company and to address charges that bad advertising practices continue at Zango despite the agreement with the FTC.
Smith: The traditional pop-up is typically a terrible experience for consumers. If I go to a site and I get my insurance ad for the hundredth time and I'm not interested in insurance, I'd argue that's probably less annoying and less intrusive than network television, where I'd have to stop what I'm doing for four or five minutes, but it's still intrusive and annoying. What we deliver are very relevant ads at times when consumers are actually looking for something that's commercially relevant. And we have multiple ad formats that we use. This goes to the grand thesis of our company, which is that consumers want to get access to content on the Internet, just like they do with radio or television. And they typically don't want to have to pay for that content. Typically, this content is non-commercially relevant in that it's games, videos, or downloadable software applications. And when a user is interacting with that software, they're not in a buying mode. What we do is we say you can get access to the game and play the game without any commercial interruptions, you just have to install our toolbar before playing that game. But then when you are doing something that's commercially relevant, when you're doing a search, when you're actually shopping, that's when we're going to show you ads.
InformationWeek: How does the conversion rate compare to search engine advertising?
Smith: What we find first is that when we compete with the other big players in the space, we're not competing typically for a discrete amount of dollars. If it works on Google, spend as a much as you can until it doesn't work anymore. If it works on Zango, continue to spend money until it doesn't work anymore. Typically, what we find is that our advertisers have the same ROI metric that they do when they're buying media elsewhere. They say, I want to get a lead, or I want this much brand lift, or I want to be able to get a purchase. They have very specific metrics in mind. It's really not about a conversion metric or a click-through metric. It's really about a return on my investment, whether I'm a brand advertiser or a direct response advertiser.
InformationWeek: Is there something more the industry needs to do to delineate the good actors from the bad ones?
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