Verified bot laundering 2. Not funny. Just die

Two months ago, we launched a series of investigations “12-letter fraud”, about the scheme of major fraud, organized by the company Pop Ads. The main element of the scheme is the daily created 12 letter random domains (up to a dozen per day), sending in first 3-5 days millions of referral visit to sites with advertising. It began operating in August 2016 and still continues its activity. No verification company has yet discovered this scheme, on the contrary, this traffic has been verified by several of them. In total, during this time, more than a billion fake visitors were sent to ad fraud sites, made dozens of billions of forged ad impressions.


In the first part of this investigation, we found another recipient of 12 letter traffic, digital assets of Matador Web Group. These 9 sites, focusing on video advertising, made over 100 million fake ad views in 2017. But in addition to ad fraud, this group redirected this artificial traffic to clients of the digital ad company.


For this purpose, using these sites, a chain of traffic laundering was created. The recipient of these visits was the technical domain go.bistroapi.com, owned by AdBistro, a content recommendation platform, a part of the large digital marketing technology company Adknowledge. It, in turn, sold this traffic to its customers. Thus, publishers instead of the human audience bought artificial traffic from 12 letter domains, laundered through Matador websites.


This traffic was verified by ComScore and Integral Ad Science, AdBistro partners in ad fraud detection and brand safety. We found that the founder and CEO of Matador Web Group Victor Ahumada, prior to the scheme above, was the client of Integral Ad Science.


The scheme involved dozens of well-known and trusted media. We tell you about the seven largest recipients of this traffic from February to April 2017. The names on this list will certainly surprise you.




Funnyordie.com


Max percent of traffic from AdBistro


46 %





Traffic stats
Total traffic December 2016 3,900,000
Average monthly visits 2017 (Jan-Apr) 6,000,000
Average pageviews per visitor 2,5



Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
46%
Max bot visits 3,500,000
Max bot pageviews 8,850,000



The first traffic from go.bistroapi.com came in October 2016.


The comedy site launched in April 2007, was founded by four Hollywood comedians led by Will Ferrell and serial entrepreneur Randy Adams. The site has its own studio for the production of entertaining video content for millennials. In November 2016, the publisher raised undisclosed investment round from AMC Networks (total funding is $18,000,000).


In 2014-2016 the company successfully made a branded content deals, according to Brandtale, since Q3 2014 it passed 97 native companies. However, in 2017, only 5 native campaigns took place on the site: Oreo, Walt Disney, Under Armor, Carl's Jr., IFCFilms.


In 2017

Total bot visits more than 10,000,000, the made more than 25,000,000 pageviews.

The total number of artificial ad views is up to 100,000,000.







Mashable.com


Max percent of traffic from AdBistro


3,8%






Traffic stats
Total traffic December 2016 53,400,000
Average monthly visits 2017 (Jan-Apr) 54,300,000
Average pageviews per visitor 2,5



Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
3,8%
Max bot visits 2,100,000
Max bot pageviews 5,300,000



The first traffic from go.bistroapi.com came in December 2016.


The site about new gadgets and social networks was launched in 2005. This is one of the first personal blogs that grew into the media empire and one of the first Google’s AdSense partners on the advertising. The founder of the site Pete Cashmore was repeatedly mentioned as a student without media experience, which created a techno-entertainment media empire, mainly for men. The company has 7 advertising offices around the globe and its own studio for creating video content. It uses both programmatic and native monetization strategy. According to the Brandtale, since 2017, the site has 23 native campaigns: Dove, Chevrolet, Adobe, Warner Bros, Hasbro, Olay, British Airways, McDonalds, Silk, Toyota, Play Station, Hyatt, Capital One, Sky, Paramount, American Family Insurance, Nestea, Panasonic, Universal, Ciroc, Accenture, Nespresso, Visit London (campaign by Great Britain Government).


Mashable earns $17,500,000 in 2016.







Wellandgood.com


Max percent of traffic from AdBistro


46 %





Traffic stats
Total traffic November 2016
2,000,000
Total traffic December 2016 2,900,000
Average monthly visits 2017 (Jan-Apr) 3,550,000
Average pageviews per visitor 3,3

Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
46,5%
Max bot visits 2,400,000
Max bot pageviews 7,000,000



The first traffic from go.bistroapi.com came in September 2016.


The site was launched on September 14, 2010, when two former beauty and wellness reporters figure out how to capitalize their wide professional network among NY and Los-Angeles fitness, fashion, beauty, and organic food business. Alexia Brue (Columbia School of Journalism) and Melisse Gelula (beauty industry expert for CBS This Morning and New York Times) have built the company without investments.


According to Brandtale, the site has 42 branded content campaigns since Q2 2016. Since June 2016, more than 180 articles have been published with the tag "Branded". The site promotes sports related sub-brands for Samsung, Adidas and Victoria Secret, DKNY, Intercontinental Hotel Group and even Great Britain Government. Some brands have several weeks-long campaigns and branded events. Wellandgood was the co-organizer of the largest campaign was Reebok’s ‘America's Most Inspiring Trainer” launched in Q4 2016.


WELL+GOOD LLC officially earns $6,000,000 in 2016.







Coveteur.com


Max percent of traffic from AdBistro


47%





Traffic stats
Total traffic December 2016 720,000
Average monthly visits 2017 (Jan-Apr) 770,000
Average pageviews per visitor 3,9


Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
47,2%
Max bot visits 550,000
Max bot pageviews 2,100,000


The first traffic from go.bistroapi.com came in April 2017.

The site doubled the number of monthly visits from 540,000 in January 2016 to 1,150,000 in April.


The site was launched in January 2011 by the group of Canadian fashion industry professionals. Jake Rosenberg is the fashion photographer. Stephanie Mark previously worked for Canadian and US luxury retailer, Hudson’s Bay as event marketing manager. Erin Kleinberg has beauty and fashion media experience. In July 2012, The Coveteur got $500,000 funding from two venture funds and hip-hop singer Drake.


Coveteur has about 80% of visits by women ages 25 to 34. This audience is a target for native advertising campaigns with Hermes, David Yurman, Fendi, Louis Vuitton, Bvlgari, Tiffany & Co and other.


Coveteur has $7,000,000 in revenue in 2016.








Purewow.com


Max percent of traffic from AdBistro


10%





Traffic stats
Total traffic December 2016 3,700,000
Average monthly visits 2017 (Jan-Apr) 3,500,000
Average pageviews per visitor 2,3



Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
10,1%
Max bot visits 370,000
Max bot pageviews 860,000



The first traffic from go.bistroapi.com came in April 2017.


PureWow was launched in September 2010 by former Goldman Sachs employee Ryan Harwood. The site focused on woman 25-45, with kids, with upper intermediate income, interested in luxury, fashion, beauty and easy housekeeping.


According to Brandtale, the site has 197 branded content campaigns since Q3 2014. The advertising campaign costs range from $100,000 to $2,000,000. According to their own estimates, Purewow has $20,000,000 in revenue in 2016.


Since Q4 2016 - Q2 2017 site has 20 Luxury and mass-market native ads campaigns: Dunkin Donuts, Estee Lauder, Dior, Silk, Macy's, Baileys, Hershey, Sephora, Clinique, Moen, Cointreau, IKEA, Emirates, Smirnoff, Cartier, Swiffer, Booking, Louis Vuitton, Tiffany & Co, Van Cleef & Arpels.






Mdlinx.com


Max percent of traffic from AdBistro


43%





Traffic stats
Total traffic December 2016 890,000
Average monthly visits 2017 (Jan-Apr) 770,000
Average pageviews per visitor 3,7

Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
43,1%
Max bot visits 360,000
Max bot pageviews 1,170,000


Established in March of 1999, MdLinx is the aggregator of annotated links to professional medical articles for doctors. In 2006 it was sold to Japanese online pharmaceutical marketing firm So-net M3, backed by Sony Communication Network (NYSE: SNE). The site doesn’t disclosure the information about the team. Last 10 years this site was not covered in the media.


The company proclaims, that it reaches doctors interested in new pharmacological products. This audience is highly relevant for pharmaceutical companies. All advertising on the site is complicated rich media promoting new professional pharmacological products.


We don’t know what the advertised substances are for, and we hope that you will never know it too. This is b2b advertising, a customer will never be able to buy these drugs without doctor prescribing. The main advertisers on MdLinx.com are pharmaceutical giants like Sanofi, Bayer, Lilly, GlaxoSmithKline, Bristol-Myers Squibb, Pfizer, Amgen.


Mdlinx.com has $25,000,000 in revenue in 2016 (includes not only digital advertising revenue).







Ozy.com


Max percent of traffic from AdBistro


16%





Traffic stats
Total traffic November 2016 4,450,000
Total traffic December 2016 5,350,000
Average monthly visits 2017 (Jan-Apr) 6,200,000
Average pageviews per visitor 1,25



Monthly maximum traffic from AdBistro (April 2017)
Max percent of fraudulent traffic
16%
Max bot visits 870,000
Max bot pageviews 1,100,000


The first traffic from go.bistroapi.com came in February 2017.


OZY was founded in 2013 by Emmy award-winning journalist Carlos Watson and Samir Rao, the former associate at Goldman Sachs. The media covers a wide range of themes related to multiculturalism, diversity and corporate responsibility. But it’s positioning is not focused. The other media pay more attention to OZY’s investors than on OZY itself.


The angel investors were Silicon Valley including Laurene Powell Jobs, David Drummond (SVP & Chief Legal Officer at Google), Larry Sonsini (top national tech lawyer), Dan Rosensweig (President and CEO at Chegg) and Ronald Conway (Founder & Managing Partner Angel Investors LP). Next round Ozy raised from German media conglomerate Axel Springer ($ 20,000,000). The last investments were received from venture capital firm GSV Capital, which brings Ozy to $10 million in January 2017.


According to Brandtale.com since Q4 2016 the site has 10 big branded video native campaigns: SAP, Audi Q5, Intel, Mercedes-Benz, Samsung, 20 Century Fox, STX Entertainment, Gildan, and Amazon Studios. But the main and the oldest OZY’s partner is JPMorgan Chase & Co, the bank placed there its video content, management posts guest articles, participate in events. Since 2015 annually “OZY Genius Award”, sponsored by JPMorgan, held. The partnership focused on HR branding for future investment bank employee.


This scheme is easy to check through open data of web analytic systems. Look at the specific example of 5 steps, after which Pop Ads are sold to the advertiser.


(Links to Similar Web site stats)

bgpxrwjrbsjb.com totalnewstoday.comallbreakingnews.com

→go.bistroapi.comfunnyordie.com




We use Similarweb data. The total share of traffic from go.bistroapi.com was extrapolated from desktop visits data.





What happened to the publisher before the 12-letter traffic appeared on its website?


Funnyordie.com


In January 2016, FunnyOrDie has decreased popularity. Traffic from go.bistroapi.com is an anti-crisis move that allows the media to survive. Without this traffic, FunnyOrDie would have half of visits and would not be interesting to top advertisers. The company lost the fight for mobile apps. In May 2016, Mike Farah became the new CEO to bring down costs and in August 2016, fired 37 employees, mostly engineers, closed the California office and began to look for ways out of the crisis. The site has the visits from go.bistroapi.com since October 2016.



Mashable.com


In March 2016, Mashable received another $15,000,000 round of funding, not for growth but for survival. In April, Mashable reduced labor costs. Eighty people were fired, including editor-in-chief and chief revenue officer. New chief revenue officer, Ed Wise, is the investor representative, managing director at Turner Broadcasting. He hired three additional vice presidents for grows of programmatic revenue. The site Started receiving traffic from go.bistroapi.com since December 2016.



Purewow.com


In 2014 Forbes named the site Purewow among Top 100 Best Websites For Women. In May 2015 the site raised $2,500,000 for fast growing. On January 4, 2017, one of 10 seed investors, Vayner Media, bought 100% of Purewow stakes. Gary Vaynerchuk acquired digital media asset in addition to the advertising agency and adtech venture fund to his vertical. Since April 2017 the site has visits from go.bistroapi.com.



Wellandgood.com


In March 2016, WellandGood hired Christina Roberts as new Director Ad Ops & Client Services, from Programmatic platform Spongecell. Since September the site started to receive traffic from go.bistroapi.com.



Ozy.com


One of the most interesting cases. According to WSJ, in 2014, Ozy Media was valued at roughly $120 million after Axel Springer invested $20 million. At that time, the average monthly traffic exceeded 10 million. December 2015 traffic declined to 6.4 million visitors, according to comScore Inc. A year later, December 2016, the company named Michael Sadicario as the new head of revenue. Prior to that, he worked as chief revenue officer at Storyful (owned by News Corp) and Bloomberg. January 2017 Ozy Media, has raised $10 million in funding to help expand its video operations and events business. In February the first traffic from gо.bistroapi.com came.


In April 2017, OZY has 64% of visits from social media, but Facebook links to OZY were posted only by it’s official page. It has no link-sharing community. Comments to the branded articles were made by empty or inactive accounts, with signs of simulation of social media engagement. Search traffic is very suspicious too. 500,000 visits were from search query “lydia sherman murderer” for 3 months. She was a serial murder in the 19th century, the spike of interest in this topic and the article in the spring of 2017 is inexplicable. Ozy.com has no any article about Lydia Sherman. Even more, these keywords are not on the site at all. What is this, if not fake search traffic? We remind, that David Drummond, Chief Legal Officer at Google, made an investment in this media business.


There is no information about Coveteur and MDlinx for the last few years, but they also need a stable traffic for their advertisers.


Management of MDlinx.com, a part of the large international corporation, need to save their jobs and show good financial results for shareholders. If the company is consistently profitable, it is unlikely that someone will check in detail how things really are. This allows management to make any formally legal actions to increase profitability.


Coveteur.com initially was founded as the showcase for the most expensive brands. The founders worked in this business and knew how to get access to the marketing budgets of top fashion and luxury campaigns. But how the edition has drawn the discerning audience for the next fashion magazine, this is a very big question.


Nevertheless, almost half of the audience of these very profitable sites right now is traffic from go.bistroapi.com.



In general, a very important question, how many there were real people in the digital audience of these sites in recent years. We need a serious audit with a qualitatively new methodology and transparent metrics. And this audit should be carried out by the brands themselves, without participants of the digital market. Advertisers can no longer trust anyone in the digital advertising industry.







The business analysis of digital assets


The founders of media that lost the human audience can’t throw in the towel, it will end their careers in the industry. They resort to a simple but proven way to get the audience back. They buy traffic.


This method is used not only by companies in a crisis but also by stable lucrative publishers. In another case, the media is doing well, and it successfully concludes direct contracts with brands. But no one will ever risk a potential profit. Publishers should show the stats of exactly those visitors that advertise ordered for its campaign. Otherwise, the brand will no longer offer to this digital media any new native ad contract. And the only way to do this is to buy targeted traffic.


Of all cases described, it follows that the appearance of traffic from go.bistroapi.com coincided with the appointment of a new chief revenue officer or another person responsible for the media's profitability. All these people are not familiar with each other, but they used the same methods to execute their revenue plans.





How do brands pay for 12-letter fraud?


All these publishers have the very high share of profit generated by direct sales of native advertising. There are certain people from the Sell-side and buy-side who are sign every deal. Each contract for native campaign has detailed targeting and specific conditions for verification of audience and persons, who responsible for approving the payments. There is no untransparency for which criticized programmatic, everything is clear. That's how it really happened.


Brand manager turned to well-known niche media with a good reputation for a native campaign. Media want to earn brand’s money but have not enough relevant audience, so it turned to the digital agency for targeted traffic. Agency wants to earn media’s money, so turned to the webmaster for the source of digital audience. Webmaster wants to earn agency’s money, so it turned to the unreliable provider, which sells the artificial traffic. Verification company wants to earn from all participants (webmasters, agencies, media and brands), so it does not even try to check the primary source of traffic that advertisers pay for.


During the execution of the chain of deals, typical PopAd’s bot with required features, starting from 12-letter domain, passes through the Matador’s sites, then, after the verification, it redirects by the agency’s server to the pages of the reliable media with branded content and native advertising. But it still continues to be a bot, not a customer. Even despite the fact that, verification partners confirm the quality of simulated 12-letter traffic and legitimate the payments.






Why do good people make bad things?


Reputation is the best defense. No one can openly blame management or founders of reliable digital media and large digital agency in ad fraud. Verification companies turn a blind eye to this and similar schemes because they do not want to be the initiators of the huge scandal in the industry, after which they will suffer the first.


Digital ad budgets finance publishers, digital agencies, verification companies, creators of artificial traffic, laundering sites holders, programmatic platforms and other digital ad services with only one purpose, to show the goods to real customers. Instead, the whole ad supply chain works to imitate a digital audience, meeting the requirements of the advertiser.


Surprisingly, nobody asks, how the agency attracts a multi-million target audience for niche media that the publishers can’t. And nobody wonders why they don’t sell it directly to brands, which would be more profitable, but sell it for publishers, which is simply an intermediary with a well-known name, but without their own audience.


The 12-letter-Matador-AdBistro chain shows us that digital ad industry just simulates the struggle with the ad fraud. Among its beneficiaries, the reliable companies got the lion's share of the advertiser's budgets. But even the botnet creator, who gets only the crumbs from the advertising pie, can become a millionaire.


Verification companies are talking a lot about an abstract black hole, where billions of dollars disappear every year. But there is no black hole. There is a well-established system of multi-level plundering of ad budgets by an entire industry. Nobody exposes the participants and beneficiaries of specific fraud schemes ever. Now you know why.


To be continued…