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The Six Companies Fueling an Online Ad Crisis

Suspect traffic vendors

Meanwhile, MGID’s business operates a bit differently. The firm is known for providing referral traffic via a widget, albeit one that first redirects users to MGID’s own sites, then often sends them to completely irrelevant sites. Its come-ons include the promise that “We could supply your site with unlimited volumes of targeted traffic, so you will enlarge its audience even more and improve your ad revenue.”

One major exchange buyer claimed to have flagged MGID for suspicious behavior about a year ago and immediately stopped working with the company.

Naturally, MGID defended its practices. “Traffic that we send to websites consists of real Internet users who click on the content because they like it,” said a spokesperson.

Why do publishers need some much help getting extra traffic, anyhow? As one mid-sized site owner explained, advertisers won’t even entertain doing direct business with a Web company unless they reach a few million unique users. Those that don’t are forced to go the ad exchange route, where CPMs are sometimes painfully low. So many turn to buying traffic.

But buying quality traffic from a company like Google doesn’t pay off in bigger ad sales. So sites turn to cheap traffic vendors, even though they may not be sure where their traffic comes from. Even the "best" cheap traffic may come from links on domains based on misspelled URLs. “You’re marketing to morons, basically,” said a publishing exec.

There are numerous forms of bad traffic, according to insiders. Some of these vendors may sell pure bot traffic, or even hire humans in third-market countries to click on ads. Others bake entire websites into invisible 1x1 pixels that live on other sites. A few even mix good and bad traffic—a form of "impression laundering.”

Several of the companies Adweek’s team of experts has identified were tough to track down. For example, the majority of the email addresses on Jema’s website yielded bounce backs. Eventually, founder and CEO Jeff Long contacted Adweek, though he declined to name any of the company's advertisers or publishers. "Our servers block non-human traffic," he said. "I don't really want to talk about our pricing. It's not relevant." According to Jema's customers, it sells traffic for a tenth of a penny.

Others, once reached, vehemently defended their practices.

“Absolutely not,” said BlueLink CEO Declan Carney when asked if his company sells bot traffic. “We have a list of 8 million domains that we will not serve ads to. Does some get through? Absolutely it does. We try to minimize the percentage. We’ve got it down to 5 percent.”

Rich Kahn, CEO of eZanga, echoed Carney’s sentiments. Bots are a nuisance, but don’t define the business, he said. “I don’t care who you are,” he said. “Everybody in this business is touched by bot traffic at some point. And fraud isn’t unique today. Look at USA Today. More than half of its papers are delivered to hotel rooms, and people never pick up the paper.”

There’s plenty of debate in the industry over whether publishers who buy traffic from these vendors are really victims or at fault themselves. Or whether these companies are just fronts for even more shady players. Some wonder how you can blame an independent publisher for not understanding how ad networks work. But as one publisher put it, “Real publishers build an audience, they don’t buy it.”

Said another: “I’m fine with paying for traffic. I just want to reach humans, not R2D2 or C3PO.”

Edelman puts some of the burden on the publishers. “Clearly, Smartmomstyle knows it’s buying from Jema Media and Jema’s click fraud traffic and other low-quality traffic are well-known among traffic buyers. So I see plenty of cause to blame [sites like] Smartmomstyle as well as the traffic brokers.”

However, there’s a growing chorus of voices arguing that agencies and advertisers are complicit in this process. A buyer might even know that his client is running ads on lousy traffic and essentially juicing a brand’s performance metrics. “But how do you have that conversation about how bad a job you’ve been doing all along?” asked an exchange insider.

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