Adware, or advertising-supported software, is software that generates revenue for its developer by automatically generating online advertisements in the user interface of the software or on a screen presented to the user during the installation process. The software may generate two types of revenue: one is for the display of the advertisement and another on a “pay-per-click” basis, if the user clicks on the advertisement. The software may implement advertisements in a variety of ways, including a static box display, a banner display, full screen, a video, pop-up ad or in some other form.
Some software developers offer their software free of charge, and rely on revenue from advertising to recoup their expenses and generate income. Some also offer a version of the software at a fee without advertising.
The software’s functions may be designed to analyze the user’s location and which Internet sites the user visits and to present advertising pertinent to the types of goods or services featured there. The term is sometimes used to refer to software that displays unwanted advertisements known as malware.
In legitimate software, the advertising functions are integrated into or bundled with the program. Adware is usually seen by the developer as a way to recover development costs, and to generate revenue. In some cases, the developer may provide the software to the user free of charge or at a reduced price. The income derived from presenting advertisements to the user may allow or motivate the developer to continue to develop, maintain and upgrade the software product. The use of advertising-supported software in business is becoming increasingly popular, with a third of IT and business executives in a 2007 survey by McKinsey & Company planning to be using ad-funded software within the following two years. Advertisement-funded software is also one of the business models for open-source software.