Are Affiliates Stealing From The Cookie Jar?

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punch11.jpgInternet advertising fraud has staged a resurgence this year, entangling listed marketing services groups, some of the country’s biggest online advertisers and now the NSW Police Fraud Squad’s computer crime unit.

In the spotlight is a surge in such dubious online marketing techniques as “cookie hijacking”, which involves “rogue” and often secretive website operators. But leading internet publishers, online “affiliate” advertising networks and e-commerce sites are also caught up in the deceptive activity – many unwittingly – when online users book travel and hotels, apply for credit cards and buy magazine subscriptions, flowers, chocolates and gifts online.

The Computer Crime Unit is assessing hundreds of pages of evidence compiled by companies which have lost millions of dollars to shady operators who “hijack” identification cookies from legitimate websites which promote links to online merchants in return for sales or advertising commissions.

Debate at the Affiliates4u online forum has made regular reference to a couple of key Australian players, including the Photon Group division Coolworkz and its partnership with controversial US “adware” company Zango. Zango struck a $US3 million settlement with the US Federal Trade Commission last November for deceptive online practices.

Another Australian-listed marketing group, BlueFreeway, has also been caught up in the drama after acquiring affiliate advertising network Viva9, which owns the Commission Monster platform managing thousands of small website publishers and online “pay-for-performance” advertising deals.

Commission Monster has been subjected to heated criticism from parts of the industry for harboring network affiliates which have been manipulating cookie trails and poaching commissions from online traffic building and sales efforts they’ve had nothing to do with. Commission Monster acknowledged in a public online forum six months ago it had struck several affiliates off its books but this week would not comment specifically on the issue.

Some of Commission Monster’s critics say it acted too slowly in dealing with the activity. Similar claims in the US led to a class action being launched in April against the US affiliate network, ValueClick

“Certainly we have lost some of our commissions,” says Gayle Dallaston, publisher of a Brisbane website developer, BCL, which employs six people to earn “affiliate” commissions by generating traffic and sales for online merchants and news and entertainment portals. “The last 18 months has been a huge learning curve. I’m seeing a lot less of it now because we are watching.”

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