Online Advertising Is a Waste of Money
A DRAFT IN PROGRESS
By Cassie Carter, PhD

Advertising is not a sustainable business model for a web portal, nor is it cost-effective for businesses seeking to reach potential customers, nor is it useful or productive for web users.

Traditional portals base their business models largely upon advertising sales.  Marketers purchase “keywords” and place ads throughout the portal, typically paying for “page views” and “clicks.”   In the 1990s, banner ad prices ran from $75 CPM (cost per thousand impressions) up to $130 CPM in 2000, with an average click rate of 7%. [1]   Click rates dropped to 0.3% in 2001 [2] and bottomed out in 2002, with an average click rate of 0.2%; prices dropped to about $2 CPM. [3]     

According to research firm eMarketer, online ad spending dropped almost 11%, from $8.2 billion in 2000 to 7.3 billion in 2001. [4] Yahoo!, for whom advertising makes up 75% of total revenue, stated in its annual report that advertising revenue decreased by $429.5 million in 2001, representing a 44% loss. [5]   

The dotcom failure epidemic can be blamed for much of the lost advertising revenue (dotcoms accounted for 70% of online spending in 2000), and some researchers believe that as major players like Pepsi, Procter & Gable, Purina, and Volvo  integrate online marketing into their traditional marketing campaigns, ad revenues will rise again to new heights:

Not only do banner ads cost just a fraction of what they did then, but online publishers have unveiled nearly a dozen new attention-grabbing formats. Ads don't just wait patiently to be clicked on anymore; now they slither down pages, tilt screens sideways, pop up in windows, and blare full-screen music videos. [6]

Apparently, these experts believe the “solution” to the problem is to do more of the same, only bigger, louder, and more obnoxious.

What TV Advertising Can Teach Us

There’s a scene in the Beatles movie A Hard Day’s Night where George Harrison is mistaken for (something like) a focus group participant.  The People in Charge bring him in for his Younger Generation opinion, expecting him to say what they want to hear about their trendsetting spokesmodel.  Instead, George says, “She’s a drag.  A well-known drag.  We turn the sound down on her and say rude things.”

Traditionally, advertisers have assumed that when people are watching television, they are also watching the ads and appreciating the message.  A recent study demonstrates that this may not be the case.

As Mark Ritson reports, a team at London Business School recruited eight households to participate in an ethnographic study of television advertising viewing behaviors.  The team placed “black boxes” in subjects’ homes containing VCRs to record what the subjects watched, while mini cameras and microphones recorded the subjects’ behaviors.  Although the “black boxes” were in place for three weeks, they were active for only the final week when the subjects had become used to them.

The results of the study indicate that “people spend most of their time actively avoiding ads.”  During commercial breaks in programming, most viewers would either do something else or change the channel.  If several people were watching together, they tended to use the opportunity to talk to each other, again ignoring the commercials, at least for the most part.  “When one of our sample did glimpse an ad that they wanted the rest of their household to see they would interrupt the proceedings and direct the attention of everyone to the ad.”  Ritson indicates that these situations did not necessarily bode well for the advertisements attracting attention: “We recorded far more negative comment on these ads than positive. If households do watch the ad as a group they are more likely to criticise the ad itself or, worse still, the actual company or product being advertised.” [7]

DVRs and PVRs such as ReplayTV and TiVo can tell us more about how viewers receive advertising. TiVo spokesperson Rebecca Baer reported in 2001 that "Anywhere from 50% to 80% of subscribers skip over most of the ads." [8]   

Digital video recorders (DVR) and personal video recorders (PVR) are similar to VCRs (videocassette recorders) except that DVRs and PVRs record television shows to a hard drive rather than to tape.  The technology allows people to “pause” live broadcasts and fast-forward to catch up with the live feed. [9]   

DVRs and PVRs make it very easy for viewers to “skip” commercials, and, indeed, early tests of TiVo in 1999-2000 found viewers skipped 88% of commercials. [10]   An ethnographic study of PVR use in 2001 found that, in general, “people exercised more control over what they watched, choosing to watch only the programs, commercials, or segments of shows they wanted and erasing the rest.”  Generally, when people watched commercials, it “was either because they were interested in the product, enjoyed the commercial, or were too lazy to skip the commercials.”  But almost all of the study subjects said, “I don’t watch commercials anymore.” [11]

TV networks and movie studios find this threatening.  Hence, “As part of its investment agreement with NBC, [Sonicblue’s] ReplayTV agreed not to emphasize its quick skip (read: commercial skip) feature in any of its promotions.” [12]   Further attempting to reassert the power of advertising in 2000, ReplayTV decided to make advertisements appear when a viewer hit the “pause” button for too long.  This “feature” was removed due to public outcry. [13]

Also, as with VCRs, people can use DVRs and PVRs to record programs and share them with others.  TV networks and movie studios find this threatening, as well.  In October 2001, several major TV networks and movie studios filed a copyright infringement lawsuit against Sonicblue. [14]   In response, a federal magistrate required Sonicblue to “monitor customers' activities to find out what TV programming they record, duplicate or send to others.” [15]   This requirement was overturned in June 2002.

Sonicblue’s required monitoring of customer activities highlights another feature of DVRs and PVRs: unlike regular television, they allow the service operator to monitor customers’ viewing habits directly, without help from Nielsen ratings or the like.  This fact highlights the privacy concerns that have circulated about DVR/PVR technology since the beginning.  In March 2001, “the Privacy Foundation released a report accusing TiVo of gathering more information about its subscribers' viewing habits than the company had been disclosing.” [16]   The privacy concerns associated with Tivo and ReplayTV are parallel to (and perhaps caused by) privacy concerns that have plagued the online environment since the beginning.

Banner Ads

Online, advertisers already know banner ads do not work.  Research demonstrates that, most of the time, people actively avoid viewing banner ads.  In 1998, Benway and Lane coined the term “banner blindness” to describe web users’ tendency ignore banner ads.  In their study, Benway and Lane asked subjects to search for specific facts on web pages that may or may not contain relevant information.   When the pertinent information was presented as a banner, subjects found it only about 58% of the time, whereas they found information presented as text 94% of the time.  In another test, subjects were given a search task using web pages containing 24 banner ads; after they completed the task, they were shown the 24 advertisements they had seen plus 24 new advertisements.  The researchers asked participants to indicate whether or not they had seen each ad during the search task.   Only 20% of the participants stated that they recalled seeing any advertisements at all during the search task.  There was no difference in banner recognition based on grouping with other content or animation. [17]

Donald Norman believes “banner blindness” is the result of cognitive schemas.  When users undertake a search task, they will focus on the most likely places where they might find the information they are looking for. [18]   Pagendarm and Schaumburg tested this theory with another experiment demonstrating that “navigation style” determines whether or not users “see” banner ads.  Specifically, they found that when users are engaged in goal-directed search, as in the Benway and Lane study, they focus their attention on content they expect will contain information relevant to the task.  Hence, “When the users search for information, banner related schemata are most probably not activated or are inhibited because the information the users are looking for is normally located somewhere in the text of a Web page but rarely in a banner.”   When web users are browsing (or surfing), however, they are somewhat more likely to recognize and remember banners presented to them “because the users are not looking for specific information but are guided by the appeal of the different features on a Web page.”

Pagendarm and Schaumburg concluded that web users will tend to overlook banners on web sites typically used to look for specific information, such as search engines, and that users will also “fade out” areas of a web page that normally do not contain the desired information, such as areas where banners are normally placed.  In contrast, users will be more likely to perceive banners on web sites they use to browse information, such as online magazines.  Given that 75% of their subjects failed to recognize banner ads potentially relevant to a search task, however, and given that recall is extremely low, the researchers questioned the efficacy of banner advertisement in general. [19]

Popups, Interstitials, Superstitials, and Text Links
Recognizing the fallibility of the banner format, advertisers moved on to bigger and “better” tactics, most notably popups.  So far, there is no such thing as “Popup blindness.”   In fact, X-10’s “Amazing X-Cam” interstitials “pushed [the] previously hidden Seattle upstart before 14.5 million unique users in April, making it the most-visited e-tailer on the Web behind Amazon.com.” [20]   Popups do create awareness, and a 2001 study of 2,000 web users by Millward Brown found that the “superstitial” variety (which loads in the background and displays after a user has seen a web page) were the most successful of all.  Superstitials are 25% more effective than other kinds of interstitials and twice as effective as banners in terms of creating ad awareness. [21]

But what kind of “awareness” does a popup create?  In a 1999 Jupiter survey of 3,000 consumers, 69% viewed popups negatively, with close to 25% finding them “so annoying that they would avoid sites that carried them.” [22]    As one commentator points out,

Unlike banner ads which use “pull” strategy to try attract interested users and draw them to click, pop-up windows use “push,” which can be seen as annoying and intrusive. Moreover, when a pop-up window directs an unknowing computer user to a site that they do not intend on visiting, this can lead to a negative response to both the promoted site and the pop-up window's host site. [23]

Significantly, there are now more than fifty popup-blocking applications on the market. [24]     As of June 2002, over one million people had downloaded the leading popup-killer on Download.com. [25]

Advertisers have yet another tactic at available: go smaller with sponsored links.  As with banners and popups, advertisers buy keywords; when a user conducts a search using these keywords, text links display with the results.  On Google, these sponsored links appear on the right-hand side of the page.  Text-based ads return an average click rate of 2% and cost from $8 to $25 CPM.  Web users view these ads as useful because they help them find what they are looking for.

Web Advertising Conversion Rates
What about conversion rates?  How many people who click on an ad actually buy something, or register, or subscribe?  In 2000, an online “conversion rate of 2-4% [was] considered average, below 2% [was] shabby, and 10% or more [was] spectacular.” [26]   In 2002, the average conversion rate was just under 2%. [27]   To adapt J. William Gurley’s formula for the current online economy, [28] here is a hypothetical scenario:

For a sponsored link, at $15 CPM you pay $3750 for 250,000 page views.  For a banner, you pay $500 for the same number of page views at $2 CPM.  Your sponsored link gets 5000 clicks (at a rate of 2%), while your banner gets 500 clicks (at a rate of .2%).  If we assume the conversion rate is average at 2%, your sponsored link produces 100 conversions (actual customers) at a cost to you of $37.50 each.  Your banner ad brings you ten conversions at a cost to you of $50 each. 

Yes, the cost-per-conversion is cheaper than it was two years ago, but look at it another way.  Of the half-million people who looked at web pages containing your two ads, only 110 were interested enough to buy from you, register with your site, or subscribe to your magazine or service.  The other 499,890 people who saw web pages containing your ads most likely ignored them or were annoyed by them. 

How about adding a superstitial to your ad mix?  Remember, superstitials, we’re told, are twice as effective as banners.  (Let’s see: .008% x 2 = …)

Branding

Thus far I have discussed issues primarily concerning response-driven advertising, rather than branding-driven advertising.  It is true that consumer familiarity is very important to branding, and advertising helps keep a brand front-and-center in consumers’ minds.  However, branding requires much more than recognition.   A brand is “A commercial entity . . . whose symbol or message when communicated to the consumer, triggers a deep emotional response and creates intense customer loyalty.” [29]

Advertising alone cannot “define” or “create” a brand or engender loyalty.  As branding guru David Ogilvy said in 1955, "A brand is the tangible sum of a product's attributes, name, packaging and price, history, reputation and the way it's advertised. A brand is also defined by consumers' impressions of the people who use it, as well as their own experience." [30]   A brand is like an individual’s personality--people get to know it over time, developing often irrational associations with it (for example, many Coca-Cola lovers prefer Coke even though they admit Pepsi tastes better).  Once people know a brand, as Ogilvy & Mather CEO Shelly Lazarus puts it, "It's a Herculean task to get consumers to think differently about [it]." [31]   

The internet presents a challenge and a charge to create entirely new branding strategies.  The advertising industry has chosen, instead, to force old advertising models onto the new medium.

Gee-Whiz Statistics

Enough scientific studies have been conducted to make it clear what does not work in online advertising.  However, rather than using this data and accepting the challenge to develop new approaches to online marketing, the advertising industry produces its own studies to prop up its castle walls. 

Despite all evidence to the contrary, commercial studies done for the advertising industry chant religiously, “Bigger is better, and richer, more interactive advertising is best.” [32]   Likewise, “brand recognition” is a battle cry to defeat all statistically verifiable logic concerning the value of advertising.  Faced with numbers establishing the worthlessness of traditional online advertising, commercial studies done for the advertising industry will fight back with “gee whiz” statistics demonstrating how ad campaigns increase brand recognition by 25%, and so on.  Notably, these studies describe neither their methodologies nor their measurement standards.

This makes sense, given that advertising agencies are among the primary beneficiaries of traditional online advertising.

According to the US Department of Labor, there are over 21,000 advertising agencies in the United States, many (or most) of which have specialized departments devoted to online advertising. [33] In 2001, the top 200 agencies were paid over $2.3 billion for interactive advertising services; in 2000, they took in more than $3.2 billion. [34]   With the costs of campaign development and media placement combined, US businesses spent over $4 billion for interactive advertising in 2000. [35]  

Online advertising is the most measurable marketing medium ever developed.   It is possible to track almost every facet of an online campaign, from the effectiveness of creative strategy through ongoing CRM.  But with this data also comes the opportunity for bad statistics.

Need to get around measurable click-through and conversion metrics?  Talk to an ad serving company.  They track ad exposure and sales using cookies, web beacons, and the like, and they claim online ads achieve conversion and branding even, as one advertising expert stated, “without the consumer clicking on the ads.  Instead the consumer remembers the message and returns to the site on their own accord.”  According to a study by Avenue A, an interactive agency, “80% of the new registrations generated by the advertising on one of the top 10 travel websites were driven by people who didn’t click on the ad, but came to the site because they got the message from the advertisement. . . .” [36]   Really?  We have seen credible, controlled, scientific research indicating that 75% of web users, overall, fail to remember ads.  We also know that 73.4% of users find websites using a search engine, [37] as opposed to 1% via banner ads, [38] and that 52% of users navigate directly to websites by typing in URLs or using bookmarks. [39]   How many of those “clickless” visitors actually discovered the sites in question because of the online ads as opposed to, say, recommendation from a friend or a magazine article?

Banner ads and popups do not work for consumers who view them, businesses that pay for them, or portals that host them.  Only the advertising agencies and ad servers benefit. 

Database/Direct Marketing

Direct marketers collect demographic information and addresses for the purpose of delivering “targeted” advertising to potential customers.  Database marketing has made this a huge business:

 A 2% response rate for a direct (snail) mail campaign is considered a success. [41]

Online, demographics and email lists are valuable commodities, forming the basis of a huge internet industry.   Using a traditional media advertising model, Internet portals and content sites collect demographic information about their users in order to sell advertising real estate for banners, popups, interstitials, superstitials, and text links to advertisers.  Some brick-and-mortar and internet companies also sell lists of their users’ email addresses to advertisers to use as they please.  Research companies like Forrester and Media-Metrix sell “studies” of consumer behavior to help companies target their ads more precisely.  And of course scam artists abound--individuals and companies who collect email addresses from online newsgroups, bulletin boards, online discussion groups, and websites, then sell their lists as legitimate “opt-in” lists.

Who benefits from this activity? 

Database/direct marketing benefits database/direct marketers—that is, the individuals and companies who collect the information and sell it, those who sell advertising space using demographics as bait, and those who provide direct marketing services.  As for the businesses hoping to reach customers,  the average click-through rate for e-mail advertisements was 1.8% in 2002 (it was 3% in 2001) [42] —which can be a substantial return in some cases, as I will discuss.  However, the cost to customers is staggering.  The customers themselves—the targets, the prospects—lose a little more privacy, a little more trust, a little more interest every day. 

Thanks to database marketing and advertisers’ obsession with demographic information and email addresses, internet users fear loss of privacy and they are overwhelmed by irrelevant spam email filling their inboxes.  The practice of collecting personal information and email addresses for the purpose of compiling marketing databases is the primary source of both of these problems. 

“Opt-In” Email Marketing

Email marketing is an especially problematic case.  In order for direct marketers to reach their audiences, they must first obtain email addresses at least, and demographic data as well if they wish to target specific “types” of consumers.   Although there are many notable exceptions, most advertisers must obtain the email addresses and demographic data from third parties because they lack the means to collect the data themselves.

On the one hand, the goal of third-party companies who collect consumer data is to sell the data to someone else.  On the other hand, the companies who purchase the data (or place ads with internet properties based on demographic data) are companies trying to target their marketing to people who might actually be interested in becoming customers, rather than wasting advertising dollars showing ads to people who are not likely to become customers.  The problem is that the business goals of third-party sellers of data undermine the business goals of the companies purchasing the data. 

For example, one perfectly legitimate and respectable company, Opt In Inc, is a self-proclaimed “full-service email marketing agency.”  Among other things, it offers for sale an email list “made up of individuals who have responded to a vacation offer courtesy of Ramada Plaza Resorts.” [43]   Opt In Inc tells its prospective clients, “These consumers are excellent prospects for travel, time-shares, car rental, insurance, credit cards, coupons, cell phones, long distance, magazines, apparel, automotive, banking, software, and much more.”  Did the vacation offer from Ramada Plaza Resorts ask these consumers, explicitly, “Do you want to receive offers for travel, time-shares, car rental, insurance, credit cards, coupons, cell phones, long distance, magazines, apparel, automotive, banking, software, and much more?”  If so, did all of the respondents on the list say “yes” to all of the categories?  If I am a software company selling a new spreadsheet application, what will my sales be if I send out an email advertisement to everyone on the Ramada Plaza Resorts list?  If I am a consumer included on the Ramada Plaza Resorts list, how many commercial emails will I receive as a result of being included on the list, and how many of the commercial emails will present offers that interest me?  Does Opt In Inc (or Ramada Plaza Resorts) tell me I am on this list?  How do I get off of the list?

This is “opt-in” only insofar as individuals on the list in question did, at one time, opt-in on a vacation offer from Ramada Plaza Resorts.  Unless each individual specifically opted in to receive advertisements from other companies for “travel, time-shares, car rental, insurance, credit cards, coupons, cell phones, long distance, magazines, apparel, automotive, banking, software, and much more,” all other commercial email generated from this list is most likely spam from the recipients’ point of view.

Opt In Inc is a representative example of what has passed as “opt-in” since the early days of online marketing.   Opt In Inc operates or partners with a variety of online services, such as CatalogChoice.com, eSweeps.com, FreeAirMiles.com, and MatchDoctor.com that present free offers of various types.  The goal of these online services is to collect email addresses and demographic information.

MatchDoctor.com, for example, is a free personal ads site in the Opt In Inc network.  Users of this site sign up for the purpose of meeting people.  They fill out a form describing themselves and the type of person they are looking to meet.  At the end of the registration process, they are required to check a box agreeing to MatchDoctor.com’s terms of service, which the person can read by clicking on a link.  The terms of service agreement states, in no uncertain terms, that the user must agree to receive advertising.  Finally, the person is presented with an “opt-in” page where s/he can choose to, for example, sign up with MCI, as well as sign up to receive offers from other Opt In Inc properties like CustomOffers.com. 

Opt In Inc and others of its kind are completely legitimate; there is no deception in the subscription process.  Subscribers to Opt In Inc’s websites are reasonably and fairly informed that their email address and personal information will be used by advertisers, and these subscribers provide their information willingly in exchange for the free services. 

When a person subscribes to MatchDoctor.com, he or she is looking for a date.  In contrast, Opt In Inc, in offering the service, is looking to fill a database with email addresses that can be sold to advertisers.   Meanwhile, advertisers want to reach potential customers who are interested in buying what they are selling.  These are three different goals.

In marketing its MatchDoctor.com list to potential clients, Opt In Inc claims:

Advertisers buying the MatchDoctor.com list want to sell cell phones and credit cards, so this sounds terrific.  However, MatchDoctor.com does not ask its subscribers if they want to buy cell phones and credit cards.  There is no way Opt In Inc could know if members of MatchDoctor.com are “excellent prospects” for these kinds of consumer goods and services.

Another Opt In Inc property is CustomOffers.com, which is much more clearly a site where people opt-in to receive advertising based upon their interests.   Here, people “Register for great bargains and free entertainment” by providing their name, email address, mailing address, phone number, and birth date, then specifying their interests by checking one or more of the 14 available  categories (computers, travel, books, contests and lotteries, etc.).  The subscriber must check a box indicating that s/he has read the privacy policy, which is again available via a hyperlink.  The privacy policy specifies what data is collected and states this information “may be used to support our services and data sharing with marketing companies, advertising agencies, compilers, and data companies. The Company does not control the practices of our advertisers or third party marketers, who may further disseminate personally identifiable information, including demographic and lifestyle data.” 

CustomOffers.com would be true opt-in if it did actually did deliver “great bargains and free entertainment” tailored to the interests subscribers specify.  However, this seems doubtful because, again, Opt In Inc asks its subscribers to specify their interests in one set of product/service categories while marketing its database of subscribers to advertisers interested in selling products/services from a different set of categories.  CustomOffers.com tells its potential customers (advertisers), “These consumers are excellent prospects for credit cards, cell phones, book clubs, coupons, music offers, software, internet service, home products, and much more.”  Of these products and offers, only “credit cards” is among the 14 choices offered to CustomOffers.com subscribers.  Hence, only those subscribers who checked the “credit cards” box will receive advertising of interest to them and, likewise, only credit card advertisers will reach potential customers who have specifically asked to receive offers for what they are selling.

Another, more general problem with this approach to “opt-in” marketing is that it assumes subscribers interests never change.  If an individual checks a box indicating an interest in receiving offers for cell phones, this person may not be interested in cell phones six months later.  In most cases, the subscriber has no control over his or her “profile” one it has been entered into the database. 

There may be direct marketing programs available online that do deliver what they promise to subscribers and advertisers.  For the most part, though, direct marketing is designed for the profit of those companies and individual selling the data, not to benefit the advertisers or the customers of those advertisers.

Spam

“There’s a good reason that the great marketers of our time have avoided spam.  It’s not like the plague, it is the plague.”  --Seth Godin, The Big Red Fez [44]

There are hundreds, perhaps thousands, of companies selling email addresses to businesses who want to reach interested consumers, and not all of these companies concern themselves with consumer “opt-in” practices.  They collect email addresses by any and all means and sell them, often cheaply.  The advertisers who purchase these email addresses may or may not be aware of the data collection practices of the companies selling the email addresses, but the end result is an onslaught of spam.

Email lists are cheap:

Spam is an immensely profitable business model.  According to one spam email selling a product called “The Bulkbook” for $29.95:

Using bulk email, YOU CAN SEND YOUR AD TO MORE THAN A MILLION PEOPLE A DAY at virtually no cost.  Whether your send 100,000 emails or 100 million emails, the price is the same.  ZERO!  . . .  Imagine that you have a decent product with a profit margin of $20.00 on each sale.  If you send an email ad to 500,000 people, and only one person in a thousand actually places an order, then you just generated 500 orders and made $10,000 in a few hours of work.”

Pew Research Center surveyed 3500 people and found that 91% used email on a regular basis in 2001.  For the most part, these people see email as a way to keep in touch with friends and family. [48]   They do not see email as a means to receive ads any more than they view their mail box as a receptacle for junk mail or their phone the conduit through which they receive telemarketing calls.  However, according to Brightmail Inc., a software maker that monitors junk mail on the internet, unsolicited commercial email is “rapidly outpacing legitimate email, which is accelerating steadily in its own right.”

In January 2003, Brightmail reported that spam “has reached epidemic proportions. The growth curve has been steep, with the number of spam attacks rising from 2.7 million in January 2002 to over 6 million in January 2003.” [49]   During the month of July 2002, Brightmail counted more than 4.8 million “spam attacks” (with each attack involving thousands of messages).  By comparison, the company counted 879,000 attacks in June 2001.  According to Brightmail, in mid-2002 spam made up between 12% and 15% of total email traffic, up from 7% in 2001. [50]

According to a study conducted by Opt-In News, 47% of email users get more than ten email advertisements per day.  As the charts below indicate, 29% of users receive between 7-10 email advertisements; 18% receive between 1-3; and 6% receive between 4-6 commercial email ads daily.

Figures 1 and 2: From Opt-In News (May 2002) [51]

These consumers say that 59% of the email advertisements they receive is spam, while 19% of the ads are from sources they have opted-in to.  The report notes that, “Under this type of bombardment,” 22% of consumers cannot distinguish which messages they’ve opted in to receive and which messages are spam.

Forrester estimated that, in 2002 alone, 250 billion emails would be sent to about 250 million recipients. [52]   Further, according to Jupiter Media Metrix, individuals will receive, on average, 1,800 pieces of unsolicited e-mail. By 2006, Jupiter expects that number to grow to more than 3,800. [53]

The “spam glut” has lowered the effectiveness of legitimate marketers. Automatic spam filters at the server or client level can “zap” even legitimate emails, and consumers, overwhelmed by spam, frequently overlook legitimate offers or delete all commercial mailings in one shot. [54]

With spam, users are rendered fairly helpless.  If a user attempts to use an “unsubscribe” link in a spam or tries to respond with a complaint, the response often disappears into a black hole while alerting the spammer that the email address is valid.  Responding to spam can result in even more spam.

Spam is an infringement and a violation of privacy and trust, whether it originates from a “legitimate” company selling email addresses or a scam artist collecting addresses from newsgroups and websites. 

Privacy & Trust

A February 2002 Harris Poll found that the top three "major concerns" consumers express are that companies they patronize will provide their information to other companies without permission (75%); that their transactions may not be secure (70%); or that hackers could steal their personal data (69%). [57]

Privacy and trust are crucial issues to the majority of internet users.  According to a February 2002 Harris Poll, the top three "major concerns" consumers express are that companies they patronize will provide their information to other companies without permission (75%); that their transactions may not be secure (70%); or that hackers could steal their personal data (69%). [55]  An earlier Harris poll found that “83% of online users had refused to give information to a business or company they considered was unnecessary or too personal in nature.  Just over four in 10 (44%) online users had avoided specific Web sites because of dubious privacy practices.”[56]

According to Princeton Survey Research Associates’ 2002 survey of 15,000 adult internet users in the US by Princeton Survey Research Associates (2002), only 29 percent of users say they trust Web sites that sell products or services. And just 33 percent say they trust Web sites giving advice about such purchases. That compares to 58 percent who trust newspapers and television news and 47 percent who trust the federal government in Washington. Three in five users (60%) do not know that search engines are often paid to list some sites more prominently than others in their results. Users overwhelmingly (80%) want search engines to reveal these practices.

A February 2002 Harris Poll found that: