If you spend enough time in the murky world of ad exchanges, ad tech middlemen and real-time bidding software, you might come away wondering why any major brand even bothers with online advertising.
Not only are banners dull and clickthrough rates low, but all the technology flooding the industry promising perfect targeting perfection can’t even deliver real human audiences much of the time.
Indeed, while the Web has never been short of tricksters, scam artists and crooks, a new breed of cheat is fast becoming a plague in the exchange world: the ghost publisher. Increasingly, digital agencies and buy-side technology firms are seeing massive traffic and audience spikes from groups of Web publishers few people have ever heard of. These sites—billed as legitimate media properties—are built to look authentic on the surface, with generic, nonalarm-sounding content. But after digging deeper, it becomes evident that very little of these sites’ audiences are real people. Yet big name advertisers are spending millions trying to reach engaged users on these properties.
1) Precision Media: This Madison Avenue located company bills itself as “a full-service media services company that owns the consumer relationships across our owned-and-operated world class digital properties” as well as a “dynamic targeting performance media company. That’s a unique positioning: Touting your company as a top content publisher and performance-driven ad company.
Precision manages at least 25 content sites, including Toothbrushing.net, BabyPowder.net and Babylearningtoy.com. Buyers say that these individual sites typically offer 20 million to 25 million impressions via ad exchanges and supply-side platform companies, meaning that there are lots and lots of folks engaged with the latest in dental care news.
Advertisers on Toothbrush.net include Mercedes and JetBlue, each of which ran intrusive pop-over ads on Monday.
“These sites have hundreds of millions of bogus impressions, and those illegitimate sites are regularly in the top 10 by volume for major SSP's,” said one buyer.
UPDATED: Roberto Abajam, an account manager at Precision, said that the company was absolutely focused on building its publishing business, but was surprised to hear about how much traffic these sites were delivering, considering that Precision had stopped buying traffic for these sites around January. "We're retooling," he said. "There is absolutely nothing nefarious here. There are no bots."
Abajam said that Precision mostly outsources its content. While he estimated that the firm has four full-time employees, he struggled to provide the name of the CEO. "Gerald Hagans I believe."
2) Alphabird. This company was founded as a Web video distribution firm but now calls itself a SSP and a premium media company with over 80 owned-and-operated sites. According to Justin Manes, COO, who spoke at an OMMA event recently (an event that Alphabird sponsored), the company generates 8 billion impressions a month. That’s the sort of traffic that the Yahoos and Facebook of the world are capable of.
Maybe not. While multiple buyers say that Alphabird’s properties are consistently among the top suppliers of inventory within exchanges and SSPs like The Rubicon Project, according to multiple sources, a large number of Alphabird's sites are rife with traffic produced by bots—i.e. nonhumans. In fact, among the Alphabird sites frequented by bots rather than people, 75 percent of the audience is overlaps. In other words, a huge proportion of the audience for sportsnewsstories.com also visits fashionfantastica.com. Possible? Yes. But more likely, these are the same robots jumping from Alphabird site to Alphabird site.
However, Alphabird says that it’s simply in the early stages of building a traditional media company. By building an SSP first? (Does that sound like something Time Inc. ought to try?)
The pay scale is a bit different from the traditional media world. Alphabird pays $2.50 for a 75-word post and $15 for a 300-word story for sites like www.ladyshopspot.com. On various job boards, the company offers this advice on producing stories: “This involves finding a good trending story on the Web. Writing an original title and an interesting paragraph about why people should care to read more. Use good SEO techniques.”
And for the 300-word pieces: "This involves finding good info from other online articles. Writing an original title and story.”
As you might expect, Alphabird sites are loaded with ads from top brands. For example, one site featured ads from Budget, BMW and Virgin. Sweetgrilling.com on Monday featured an auto play video for Motown the Musical (shown three times in two minutes), as well as banners from JetBlue, Pillsbury and Gogurt.
Manes, while acknowledging that the company has heard whispers of suspicious behavior, vehemently denied that Alphabird uses bots to drive up its traffic. If anything, he sees Alphabird as a victim.
“We buy lots of traffic all over the Web, and we run a heavy ad load because you have to pay for it,” he said. “We buy 100,000 visits for some sites, and these sites obviously need content. We’ve got to recoup the cost. I don’t believe people are adversely affected by the number of ads.”
Alphabird now employs 13 writers and editors for its 80 sites, per Manes. The company plans to invest in more talent and more tech to protect itself. “We’ve spent a lot of time trying to keep out the bad actors,” said Manes. “We’re trying actively to solve the problem. We’re not saying these sites are popular. We’re buying traffic and we’re being duped. We’re being robbed.”
3) DigiMogul: This company’s total size and reach are a mystery, but a single one of its domains, USBuildingdigest.com, delivers an inordinate amount of traffic on Web exchanges, say multiple buyers.
One visit to USBuildingdigest.com yielded ads from Zipcar, American Airlines, Monster.com, Zipcar again, NuvaRing, a third Zipcar ad, two banners side by side for the birth control brand NuvaRing, and finally, a Verizon pre-roll.
A large number of articles on USBuildingdigest.com have been penned by Gwenyth Laird Pernie, who has 22 followers on Twitter. While no longer blogging for the site, Laird Pernie said that some of her stories generate 400,000 clicks. “I don’t know how,” she said.
Another DigiMogul brand, Directorslive.com, on its "about" page, has been reported to generate a whopping 326 million monthly pageviews, per sources. And with seven ad slots available for each pageview, the site claims to sell over a billion ad impressions a month. Sure, movies are popular, but that popular? If so, might want to call Marissa Mayer.
Alas, DigiMogul’s blog has just four posts, the last dated June 2012.
“These guys were sending us many millions of bid requests per week, despite the fact that these sites get maybe 10,000 visits a month,” said a DSP. “We blocked them.”
DeWayne Rose, CEO of DigiMogul, said that his company works with Rubicon, OpenX and 24/7. He called any allegations of bot traffic "silly."
"We market just like anybody else," Rose said. "We spend seven figures building these sites out. We can't outsmart anybody. If we were using bots, we would be getting caught. Everything is by the book."
4) Woohoo Media: Like Precision, Woohoo labels itself as a company “with a common passion for performance-based online marketing” specializing in cost-per-acquisition. Yet it’s also a publisher. Among the Canadian firm’s properties are Thermogenicreviews.com and OddTricks.com. Speaking of Odd Tricks, one ad exchange expert billed Woohoo as “Crappy non-real articles, full page pop-ups, lots of ads. Huge number of impressions.” Woohoo officials did not return requests for comment.
5) ALLABC.com: Here’s an easy way to make some cash on the Web. Have this company place a few pixels at the bottom of a page, say buyers. Convert Your Traffic Into Cash [With] Invisible Advertising. Participants can get $2 per every thousand impressions they deliver.
6) Audience Ampllfy: This company doesn’t produce ghost sites, only an auspiciously large proportion of traffic. According to a source, this company has at times represented 25 percent of the total inventory available on a given exchange. How can this be? Buyers say that Audience Amplify claims to represent thousands of sites; the company’s site lists only two employees. “Audience Amplify empowers publishers through an innovative technology platform,” the site reads. Co-founder Seni Thomas claims the company handles 5 billion impressions a month.
"I can certainly attest to the excellent quality of Audience Amplify's inventory," said Andrew Benton, account manager at AppNexus.
It turns out, at the end of last year, the Audience Amplify business, which was designed to help Web publishers reach more of their audiences across the Web, was officially shut down. As of this year, Thomas and his partner Sam Huleatt have established an alternative business, Heights Media, which buys and repackages huge volumes of Web ad inventory.The pair supplied Adweek with a detailed list of inventory sources, which included multiple well known SSPs and ad networks like CPX Interactive. Both executives were adamant that the company actively screens its ad inventory supply for bogus publishers and/or bot traffic (company has not been directly linked to the Chameleon bot net).
What are these ghost publishers up to exactly? Experts say their tactics are numerous (as John Battelle expertly pointed out in a recent post). They can use bots to simply generate lots of impressions, which can then be sold to advertisers. They can have bots visit a particular brand’s website, then immediately visit their own properties, resulting in retargeters like Criteo jumping in looking to retarget these fake users while lining the ghost publishers’ pockets. Bots can even fake clicks, though conversions are tough to mimic.
"There’s certainly a lot of bad inventory out there," said Michael Greene, director of research/marketing at Audience Science. "Some of that is definitely a supply-side issue, with low-quality content and non-viewable ad placements that no human user is likely to ever see." How is Greene so sure? Per Audience Science data, it's not unusual for over 40 percent of impressions to be directed to just 1 percent of users targeted. The likely reason being that those users are bots.
While bots traditionally have been easy enough to spot—their traffic falls into rhythmic patterns, or occurs too quickly (such as Web pages seeing ads getting clicked up within milliseconds)—fraud perpetrators are getting more sophisticated. A recent report by Solve Media found a major spike in traffic generated by nonhumans over the past few quarters. "We already have a situation where most people don't click on ads, and the ones that do are suspect people," said Ari Jacoby, CEO of Solve.
According to Douglas de Jager, CEO of the Web security firm spider.io, crooks are getting good at mimicking human traffic patterns. On Tuesday, Spider will release data on a new bot network dubbed Chameleon that Spider believes is costing advertisers $6 million a month. Per de Jager, Chameleon has generated billions of impressions on 120,000 machines. Over 200 websites have benefited from Chameleon traffic, and according to sources, those sites include DigiMogul and Alphabird properties.
“What we’re seeing a lot of is these guys who act as publishers and advertisers, and they’ll put a whole page in an ad slot," de Jager said. Thus, a person who visits one Web page will get tracked as having seen all the ads on a Web site they never even approached.
“These companies reverse engineer the metric advertisers want,” added de Jager. "This could be the tip of the iceberg. We think it’s pretty monstrous.”
Bravo, said Andrew Pancer, COO, M6d, which spends a lot of time digging through inventory in the ad exchange world. "Since late 2011, when we first identified this issue in the ecosystem, we have worked diligently to educate the marketplace and implement advanced solutions to eliminate all botnet traffic from our clients' campaigns," said Pancer. "This latest report from Spider.io is a huge step forward toward exposing those who are polluting the ad exchanges with fraudulent traffic."
Brian O’Kelley, founder and CEO of AppNexus, said he’s been chasing online traffic cheaters for 10 years. Like athletes taking performance enhancing drugs, the perpetrators keep changing their tactics to avoid detection.
That said, AppNexus has made stopping fraud a big priority, employing 10 engineers in Israel and 65 contractors in the U.S. to monitor 10,000 domains.
“It’s pretty rampant,” he said. “What I think you’re seeing is, this business model works for now. The industry has convinced agencies to just buy audiences. And these bad actors have found ways to exploit that.”
So is it the buyers’ fault? “It’s a buy-side problem,” argued Will Luttrell, CTO / co-founder, AdSafe Media. “It’s all based on a misuse of data to gauge performance.”
According to Luttrell, agencies, trading desks and DPS “are hiring PhDs to optimize on CPC goals. So they’re going to do whatever they can to make clicks happen. It creates a perverse incentive. There are two parties being hurt. Advertisers are losing money, and large premium publishers get screwed.”
One frequent exchange buyer tells the story of getting kicked off a brand’s media plan because the company had moved to block a host of fraudulent sites, only to see its performance suffer.
Still, others give buyers a break. “They are completely overtaxed,” said Andrew Casale, vp of strategy at Casale Media. “There are a half a million domains on exchanges. They are maintaining blacklists that are never complete. Thus they are always reactive. This trend toward ghost sites is new and kind of terrifying.”
So how bad are the exchanges? “Outside of Google, I don't think there's a lot of active policing that gets done on the publisher side,” said a DSP exec. “The game definitely favors the supply side right now.”
Most buyers and DSP executives say that Google knows what it’s doing when it comes to keeping the bad guys out of the company’s exchange, though a few report that inventory from DigiMogul and Alphabird is findable via Google AdX. Consistently, Rubicon, OpenX and Yahoo’s Right Media are labeled as littered with fraud. One problem with SSPs like Rubicon, insiders say, is that they let publishers self-identify their own domains, potentially allowing crappysite.com to claim it’s Amazon.com.
“We actively vet each publisher we work with through our direct sales force in order to prevent this from happening,” said PubMatic CEO Rajeev Goel.
According to Jason Fairchild, chief revenue officer at OpenX, over the past year the company has invested heavily in trying to keep dicey players out. That investment has included both technology and hires; the firm has built out a Quality Team with experts from Yahoo and other companies. Fairchild said that OpenX regularly bans sellers that demonstrate suspect traffic or quality. "We think the burden is on anyone [like OpenX] that sells inventory in this space," he said.
Insiders generally agree that AppNexus has its act together, though a few warn not to believe the hype. A peek into the AppNexus inventory pool on a given day reveals little in the way of dazzling quality, but little obvious fraud either.
For example, there are a few hundred million impressions from DailyMotion and Weather.com. Plenty of Facebook. Lots of second- and third-tier social networking sites and games. Tons of international impressions from eBay.
Some claim that bot traffic, and the overall threat of fraud, is overblown. Robots can’t fake purchases, they argue, meaning that performance advertisers won't ever end up paying for bogus impressions. And the ad exchange companies are getting smarter.
“I know people claim that 30 percent of exchange traffic is bots. That’s not what we see at all,” said John Dietz, vp of products for Adometry. “There’s always going to be an arms race. You still get email spam, and you still use email."
“This used to be a big problem in search, but not so much in display,” added Joshua Koran, svp of product management at Turn.
But others worry that this sort of constant dicey behavior in the online ad realm is a big problem—one that goes well beyond the millions lost to cheaters. They worry that all this noise gives brands more reason to just stay offline.
“The growth of online dollars has been slow all things considered, completely because from the beginning, there has been this dark underbelly," said Yieldbot CEO Jonathan Mendez, who’s been outspoken about the bot traffic surge. “Imagine if Coke or Pepsi ever get associated with this stuff. That’s on the front page of the Journal.”