In mid-2012, the online content/distribution firm Touchstorm was pushing further into original Web video, particularly for its lifestyle site Howdini. Like many in the industry, Howdini was attracting solid CPMs but struggled to get enough views.
That is, of course, a common challenge for any site not called YouTube. Large media companies including Time Inc., Condé Nast and Dow Jones all strive to become players in online video, and all need traffic since none of their sites are major video destinations—at least not yet.
That's why many companies turn to vendors that promise to expand their audience. The typical pitch goes something like this: You pay us and we’ll distribute your video all over the Web. You’ll get lots more people to watch your videos, and you’ll be able to sell many more ads. We might get a cut, and everybody wins.
If that sounds like a prime opportunity for scam artists, you might be right. That’s what Touchstorm believes it has encountered. In fact, one audience-extension firm Touchstorm employed, OneScreen, is at the core of questionable Web traffic that has shaken the video operations of several media companies and perhaps even the careers of a few executives. Aside from Touchstorm, OneScreen has also had issues with Meredith Corp., Bonnier Corp. and HealthiNation, while indirectly impacting the likes of Tremor and Videology.
Meredith dumped OneScreen in mid-2012. Per sources, Meredith executives believed much of the traffic being delivered by OneScreen was bogus. One executive who was a champion of the OneScreen deal, Michael Knott, former head of the Meredith Women’s Network, left the company soon thereafter. Knott, who declined to comment for this story, is currently doing consulting work. Some sources said Knott left Meredith because he was looking to build his own company, while others contended he clashed with management. Still others said his departure had to do with his having previously advocated for OneScreen.
Several other Meredith executives, including J.R. McCabe (who jumped to Time Inc. to help that company dial up its video offerings), also would leave the company, and the Meredith Plus Video Network was eventually phased out.
Meanwhile, around the same time, HealthiNation was increasingly using OneScreen to acquire traffic and host its videos. Problems soon arose, according to sources. HealthiNation had tapped OneScreen to provide the company with more video inventory to sell to third-party networks like Tremor Media and Videology, but some executives were immediately suspicious of the traffic HealthiNation began to receive. To be fair, others at HealthiNation were not concerned with traffic issues and even praised OneScreen’s technology. That led to a dispute inside the company some speculate contributed to the voluntary departure of co-founder Raj Amin, according to former HealthiNation insiders—though other HealthiNation executives dispute that (per sources, Amin had been vocal about his concerns over OneScreen and some other traffic partners prior to his departure).
Back to Touchstorm. In 2012, the company hired OneScreen to manage its Web video and drive traffic to Howdini.com. According to top executives inside Touchstorm, after just a few weeks problems emerged in the partnership. OneScreen insisted on hosting Howdini’s videos on a new domain, videos.howdini.com; the reason is the subject of dispute. OneScreen claimed it was done to avoid crashing Howdini.com, but Touchstorm executives maintained that is inaccurate.
Touchstorm also claimed OneScreen refused to allow a Google tracking tag to be included on the new video domain—essentially making Touchstorm blind when it came to tracking where the site’s traffic was coming from. "Once I found out that OneScreen wanted to set up a third-party site to receive the traffic, the only way I'd let my people do it is if we could insert Google Analytics, which they refused to allow," said Touchstorm CEO Alison Provost. "We had to sneak it in through a low level employee."
OneScreen also disputed the claim. “We don’t stop anyone from doing this,” said former CEO Atul Patel.
Here’s where the story takes an even stranger turn. Immediately upon teaming with OneScreen, Howdini saw its traffic surge. The site’s unique users base skyrocketed from 205,000 to more than 3.6 million per day in just a few months. OneScreen, which was recently ranked No. 105 on Deloitte’s Technology Fast 500, seemed to be delivering what it promised.
But officials inside Touchstorm were suspicious. They had been monitoring traffic patterns from various outside vendors for a while and internally had developed a nine-point system for detecting nonhuman traffic—looking for factors such as strangely high visits/per user rates, traffic coming from the same browser or the same IP address all at once or at odd hours. OneScreen was missing on all nine criteria. For example, 88 percent of the site's traffic came by way of Internet Explorer; 40 percent was Howdini's normal Internet Explorer share. The other 12 percent came from unidentifiable browsers. Zero users came from Macs. And a single visitor was registered as returning to the site as many as 10 times in one day.
At one point, said a Touchstorm source, 10,000 users came to Howdini at the same precise second—something very few sites see or can handle.
As it turns out, the traffic in question came by way of AdOn, a vendor whose traffic has also been questioned in several media reports. According to Touchstorm, OneScreen outsourced traffic acquisition to AdOn.
Yet according to OneScreen, it was Touchstorm that had worked with AdOn, and OneScreen was simply facilitating what turned out to be bogus audience.
“We just manage traffic,” said Patel.
“We didn’t buy it,” said Provost. “That’s ludicrous.” To hear Provost tell it, OneScreen sold the company on its ability to acquire traffic, and OneScreen initiated the deal with AdOn. “We had never heard of AdOn before, we had no business relationship with them, no contract, never wrote them any checks, and so forth,” Provost wrote in an email. “Our business relationship was with OneScreen.”
Adweek was made privy to an insertion order signed by both Touchstorm and OneScreen that lists OneScreen as committed to "traffic acquisition"—for a $5 CPM. Blinkx, which owns AdOn, declined several requests for comment for this story.
In fact, OneScreen’s website did previously house information regarding “audience development” services. That section of the site has since been removed. Companies that have dealt with OneScreen in the past believe OneScreen may have used promises of cheap traffic to get more companies to try its video software products, which compete with the likes of Brightcove. “It’s too bad,” said a video executive from a major publisher that had worked with OneScreen. “Their tech is actually pretty good.”
Regardless of who was at fault, suddenly Howdini found itself being blacklisted by Google—and in a major financial battle with OneScreen.
It would be easy to dismiss the OneScreen/Howdini kerfuffle as an isolated incident. But consider the Meredith deal. The company will not comment regarding its now-severed relationship with OneScreen. But according to several former Meredith executives, OneScreen delivered Meredith large quantities of questionable traffic, some of it “semi porn” in the middle of the night and from oversees addresses. “They are 100 percent ethically challenged,” said a former Meredith exec of OneScreen’s management. The person said her boss described an interaction with OneScreen as “the most dirty [business] conversation he’d ever had.”
Meanwhile, HealthiNation continues to employ OneScreen and continues to have billing problems, according to Patel. HealthiNation execs declined to comment, but per sources, the two companies are fighting over a series of bills for traffic delivered last year by the vendor AdKnowledge, which, like AdOn, has been accused in published reports of selling nonhuman traffic.
“AdKnowledge has taken in recent months to combat unqualified traffic and lead the industry in best practices,” the company said in a statement. “In addition to our ongoing relationship with Adometry for verification services, we've recently added Fraudlogix and have proactively reached out to others in that space to do likewise.”
That particular dispute was regarding activity in 2012. But Adweek, with the assistance of Harvard professor Ben Edelman, a Web traffic expert, found that HealthiNation is currently receiving invisible video traffic via OneScreen through a slew of middlemen, including Crocflatiron and Advertise.com.
While HealthiNation still works with OneScreen (UPDATED: HealthiNation CEO Kirk Wolfe says the company severed ties with OneScreen in July), Meredith thought it was done with the company. That is, until Meredith acquired Parenting.com from Bonnier earlier this year.
It turns out that Parenting, after losing a recent video distribution deal with AOL, had tapped OneScreen to increase its video traffic. A former executive described a scenario very similar to what Touchstorm experienced. OneScreen built its own Web domain, Videos.parenting.com, which carried the Parenting logo, “but we didn’t program at all,” said the exec.
OneScreen had agreed to drive traffic to the pseudo Parenting page, loaded with video, and the two companies would split ad revenue. (One executive close to the deal wondered whether Parenting was looking to pump up its numbers to make it an attractive acquisition target). Suddenly, the page received “an astounding amount of traffic,” said a source.
Overnight, OneScreen was driving up to 60 percent of Parenting’s traffic. It became clear to insiders at Bonnier that the traffic was not likely via human beings.
When Meredith acquired the site, it immediately shut down all previous traffic acquisition deals, including OneScreen.
In an interview with Adweek last month, Patel dismissed such claims. “These are just discrepancies,” he said, referring to the HealthiNation and Meredith deals. “I would dispute all that.”
Patel maintained that the company simply wasn’t ready for this sort of thing in the past. Since then, OneScreen has hired several bot-detection vendors, including WhiteOps and Mdot labs. “We didn’t have the technical capabilities in the past," he said. "We are really starting to police this." A rep for Mdot labs, however, asserts that OneScreen was never and is not now associasted with Mdot labs. WhiteOps also denied ever having worked with OneScreen.
But in the course of Adweek's reporting this story, things changed rapidly. Patel resigned his position as CEO just after Thanksgiving (UPDATE: Patel says he was terminated). Days later, it was announced that OneScreen had been acquired by Adaptive Medias, which like OneScreen, is a public company based in Irvine, Calif., and traded on the over-the-counter markets (also known as pink sheets companies). The two companies had common investors. Adaptive Medias CEO, Qayed Shareef, is now running OneScreen.
Shareef professed to know nothing about the company’s traffic-acquisition business or any of its problems with partners. Shareef said OneScreen recently laid off 25 employees, and some client knowledge may have gone with them. “This is all kind of new to me," he said. "It’s going to take me a while to research everything. But fraud detection is going to be part of our platform. This company is primarily focused on building great software.”
Meanwhile, Touchstorm has been so burned that it has gotten out of the business of selling ads altogether. Traffic acquisition is too dangerous, said Provost. “Anywhere we tried it, we couldn't get any legitimate traffic. And we tried everything. It makes me wonder: Is there any real traffic to be bought?”