How to Build a Huge Video Site Overnight Through Unintentional Clicks

This past spring, a site called Freestreams.com was one of the fastest growing video properties on the Web. It had come from out of nowhere to reach 7 million unique users a month. Suddenly Freestreams was popping up on the top video ad exchanges—first a few hundred thousand impressions a month, then over 11 million a day in May, per sources.

The question is, how does a low-profile website that bills itself as a corporate information hub for a “software and services” firm for radio and TV stations suddenly get so big? How does a site that simply lists various TV and radio stations, exhibits a design straight out of the 1990s, houses a sports channel featuring Jeremy Lin in a Knicks uniform, and delivers autoplay video featuring cover images of random spaghetti westerns, attract so many viewers so fast?

[Check out the complicated corporate history of Freestreams' principals here]

Well, here’s one way Freestreams seems to be boosting its traffic. On sites like Vodly.to, where fans can find links to lots of movies currently in theaters (like, say, Despicable Me 2 or Pacific Rim), there are tons of Web ads hidden within the fabric of the page. It's the old (or new) hidden banner trick. When users click on the site itself (not on a banner or a piece of content but on a blank part of its Web page) they inadvertently click on an ad that triggers a pop up.

Sometimes those pop ups implore a user to download the latest version of Flash—and these ads look an awful lot like a typical software update messages from Adobe. But they’re not.

On occasion, some of these pop ups purport to be from MacKeeper, a company claiming to help users clean up their computers. These companies are not likely to be affiliated with Apple, and many Web users warn against installing their software.

In recent months, many of the pop ups served on Vodly appeared to be delivered by an ad network called Direct Rev, such as:

ad.directrev.com/RealMedia/ads/adstream_sx.ads/S0000011/118914557354911732@x10?uln=en-US

Others looked like this:

http://mexicoradiogratis.com/go.php

Or
 http://hdwolf.com/go.php/

These sites host an iFrame containing Freestreams' URL. In other words, users accidently click on a blank space on a site delivering links to copyrighted material, and they are accidentally directed to Freestreams.com—whether they ever actually see the site or not. That’s probably not what advertisers such as Honda, American Express, Progressive Insurance, CNBC’s The Profit and Ikea—all of which delivered auto play video ads on the site—had in mind.

Certainly, it's possible that Freestreams' traffic surge can't entirely be attributed to this hidden ad tactic. But experts say it's unlikely that such rapid traffic growth could be achieved from pure organic growth means. In a recent Adweek column, Jay Miletsky, CEO of Sequel Media Group, spoke about the need for many mid sized publishers to buy Web traffic. "Great content alone won’t drive traffic," he wrote.

John Williams, CEO of Freestreams, declined to comment for this story, saying only “We are still developing our Internet radio and television software services business and we are not looking to do publicity at this time. Our platform competes with large, existing service providers and we are not ready to promote it yet.”

It turns out, Freestreams' principals have a curious, and complicated history. Check out the rest of the story here.

1

Jetcast and RadioLoyalty

-Williams was formerly the CEO of a company called Jetcast, which offered a media streaming product called RadioLoyalty designed to “eliminate costs and increase revenue for broadcasters and increase advertiser’s return on their advertising investment,” per a 2010 press release.

2

Lenco Mobile Acquires Jetcast

-Lenco Mobile acquired Jetcast in 2010. That deal included a slew of companies, including Replace Ads (1,000 premiere partners, its site claims), RadioLoyalty and HDIRadio.com

-Lenco Mobile trades for about 5 cents as an over-the-counter stock: LNCM. The company's history is complicated (see 10K here).

-Lenco previously owned an ad agency, AdMax Media, until it was sold to Silverback Network in 2011. Adweek was unable to track anyone down at that company.

According to Lenco executive chairman Michael Levinsohn, the company saw a huge business in RadioLoyalty, possibly bigger than Pandora. But after investing $5million "we never generated a meaningful return," Levinsohn said. "There was no revenue. It didn't work out."

 

3

StreamTrack Launches

-Sometime around 2012, StreamTrack Media was formed out of the Jetcast assets. StreamTrack trades for 9 cents on the over-the-counter stock markets.

-Michael Hill, StreamTrack's CEO, is also listed as the CEO of Lux Digital Pictures Inc., which is the previous name/stock title of StreamTrack. Got it?

 

 

 

4

Lenco Merges, Freestreams is formed

-According to StreamTrack's Hill, John Williams and his partner Jeff Pescatello left the company to form Freestreams. The two parties had officially split in 2011 (see this SEC filing).

-The mobile portion of Lenco merged with a company called iLoop Mobile in 2011 to form Archer Mobile. RadioLoyalty was not part of that deal.

"Archer is a mobile marketing and mobile business transactions company," said Matt Harris, Archer CEO. "We've stayed completely focused on that. We divested ourseves of all the Web radio assets before that merger."

5

The All Digital Holdings Connection

-Both Freestreams and Lenco are listed as customers of a digital services company called All Digital Holdings, along with Best Buy, Cox, Miramax, Rogers and Akamai. All Digital, based in Irvine, Calif., trades at around 13 cents. The firm helps media companies like Cox build iPad and Android apps for local stations and newspapers.

 

6

All Digital Has its Own Merger

-In January, All Digital merged with a company called Broadcast International, which trades for around 8 cents. The advisor on that deal was a firm called Merriman Capital, which itself trades for roughly 12 cents. In the press release, the companies touted the merger as "Paving the Way for a Revolution in Digital Broadcasting."

 

7

StreamTrack’s Footprint in Web Radio Is Growing, Raising Questions

-StreamTrack's Hill claims that his company works with 1,500 radio stations, with plans in the works to add 3,200 others. However, Adweek has learned that some of the stations listed as partners of the company, such as 181.fm, have never actually employed RadioLoyalty's tech.

According to Alexa, RadioLoyalty.com's traffic has spiked significantly of late. Several of the URLs Alexa reports as big sources for RadioLoyalty.com are dead. For his part, Hill said that Alexa tends to not pick up on URLs that drive traffic to the RadioLoyalty video player. 

-The ad network TargetSpot recently signed a deal with StreamTrack.

 

 

 

 

 

8

Some Flag RadioLoyalty’s Impressions

-Adweek has learned that RadioLoyalty's video impression numbers have recently surged to over 2 million per day in the top video exchanges. One major exchange buyer has taken to blocking RadioLoyalty ad impressions, citing possible bogus inventory, just as some buyers had blocked Freestreams. However, another analyst said he saw no evidence of impression inflation for RadioLoyalty.

9

Hill Explains RadioLoyalty’s Growth

"We have added a lot of traffic sources and broadcasters this year," said Hill. RadioLoyalty has seen the number of radio station websites with whom it partners jump from 1,259 to over 5,000 in the past six months, Hill claims. 

"We really aren’t concerned with our Alexa score," Hill added. "We measure our success by listening hours on our platform, not our Alexa score or how many people come to our site. Because the more hours people listen on the platform, the more ad opportunities we have, and the more revenue us and our broadcasters make."  

It's worth mentioning that a major radio broadcaster/Web radio distributor told Adweek that the company's executives had never heard of Freestreams, RadioLoyalty or StreamTrack.

10

Hill’s Past With the FTC

In 2009, when he was CEO of Commerce Planet, Hill was charged by the Federal Trade Commission with violating federal law. The accusation was that Hill's company "automatically charged unwitting consumers $59.95 a month for enrollment in an 'online supplier' program for Internet auctions," per the FTC, which originally ordered Hill to pay over $19 million. Hill eventually settled with the FTC.

11

StreamTrack Accuses Freestreams of Violating IP And Covering its Tracks

Putting RadioLoyalty aside, Hill for one says he has become been suspicious of Freestreams' recent growth. “It looks like they are arbitraging, or buying traffic that is not real traffic,” said Hill. “They have no real capital.”

Per sources, Hill could have a reason to hold a grudge against Freestreams and Williams, as his company accused Freestreams of violating its IP last year.

According to Hill, Freestreams management team deliberately works to cover its tracks.

“You are not going to find [them],” said Hill. “That’s intentional...they make it look like they don’t own anything.”