DigitalMoses: Flogs and Farticles — The Crackdown Begins

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riotDM CONFIDENTIAL – On what has historically been tax day, April 15, the FTC sought to impose a tax of its own, this time against those associated with fake blogs and fake news sites.

Last year, we said that it was not a matter of if but when the FTC would take action against those involved in the marketing of fake blogs. The when was a two-step approach, the filing of five lawsuits and a just completed press conference titled, “FTC Cracks Down on Fake News Websites Used to Advertise Acai Berry Weight-Loss Pills.”

We first started talking about fake blogs two years ago, in early 2009. By then, fake blogs had already been running successfully for more than six months, and taste aside, offered many insights into performance based advertising. A study of the fake blog ecosystem was a look into risk and arbitrage based media buys. It provided case studies on the monetization of remnant advertising, one click or two click models, and lessons in run of network advertising. And, since their inception, we’ve seen them promote weight loss, colon cleanses, auto insurance, e-cigarettes, penny auctions, men’s supplements (not those men’s supplements), and work from home programs.

Fake blogs and fake news sites also taught us a lot about the affiliate marketing space – highlighting the difference between affiliate networks and CPA Networks as well as those doing lead generation and those doing continuity marketing. They were a source of tremendous wealth, as well as a lot of pain, especially for the earliest participants.

The FTC filings could appear to those not following the industry as a first action against such advertising; instead, it’s just the latest. Merchant accounts were shut down, and millions of dollars held by the credit card companies never made their way to the advertisers who then ended up leaving the networks holding the proverbial bag.

Read the rest of the commentary at DM Confidential.

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