ADOTAS – A weary Internet public sighs in relief. Finally the Federal Trade Commission is coming down on the people responsible for the animated belly fat ads — no more crudely drawn cellulite jiggling above tight jeans! No more images of French newscaster Melissa Theuriau (who reportedly didn’t know her image was being used) promising hard-hitting investigations into Acai berry products!
All is solved, the Internet is safe!
When I first started reporting on the digital ad space, over and over I heard CPA network heads claiming that the Wild West days of the Internet were over. Bulls—, I thought then, and I’m of the same mindset now. CPA networks love propagating the idea that some bad apples are ruining a legitimate business for the rest, but the fake blogs and articles (hence “flogs and farticles”) issue is systemic — publishers, networks, affiliates and advertisers are all guilty parties.
FTC reps — likely in response to a widely shared AdAge article suggesting the agency’s crackdown on flogs and farticles wasn’t doing much — sat down with Paul Farhi of The Washington Post to explain the 10 operations (PDF) it swept back in April, focusing on the belly ad scam in particular and why it spread to even the most premium content depots (MSNBC.com? CNN.com? My lord!) of the worldwide web via affiliate marketers (which WaPo almost describes as alien-like creatures).
Basically, affiliates used ads with the animated shrinking belly and pretty (fake) investigative reporters to lure browsers to websites disguised as legitimate news depots — i.e., they had no big print that saying “This is an advertisement.” These were/are filled with fake statements from real news depots and unsubstantiated benefits, as well as links to sketchy stores where you can buy miracle diet products.
It’s nothing new — a source recently suggested to me that the farticle has been ingrained in the affiliate model for a long, long time.
But the FTC is always quick to jump on health-related fraud, and there happens to be a scam du jour behind the belly ads. Most of the companies offer “free” samples in exchange for credit card information, but the devil is in the details, which are typically in the finer-than-fine print: a user unwittingly agrees to pay for more shipments in the future and can’t stop them until the toll-free cancel line is located and called (which is another hassle all in itself). The FTC is arguing that’s misleading to the point of fraudulent.
The previous poster boy for this kind of business is Jesse Willms, a Canadian Internet marketer accused by the FTC of making $467 million from such unsavory practices. If you Google “Jesse Willms,” a few sites about fraud and scams show up, but the majority of results are self-published sites boasting Willms’ charity work and puke-worthy platitudes about business ethics. Yes, Google’s search engine appears to be Willms’ bitch.
Anyway, there’s no real news in the WaPo story, just investigation details that show the FTC’s crime-stopping abilities and a clarification to the general public of the extent of such Internet scams.
But Fahri notes that WaPo is guilty of running the ads as well — he asks his own publication why it ran the ads and a representative says they are “investigating the situation.” Let me know when/if they finish that investigation, Paul. Jim Edwards at Bnet notes his site also ran the ads, as fingered ad network Pulse 360 sells space for parent company CBS.
Circa Direct and owner Andrew Davidson, the second listing on FTC’s “Fake News Site Sweep” info sheet, spent $6.25 million advertising with Pulse 360, Edwards writes: “Pulse 360 isn’t a scam house — it’s a legitimate media buying agency that counts Comcast and CBS* as clients or customers. Circa also placed its ads via SuperMedia, which is best known for Switchboard.com and other legit directory sites.”
Innocent until proven guilty, Circa like the rest in the gang of 10 is denying all charges.
The FTC’s plan to clean up the flogosphere (as DigitalMoses lovingly puts it) is to scare affiliates (i.e., small fries) straight by coming down on a few Jesse Willms clones. But who else profited from the scams? The FTC claims that its gang of 10 spent $10 million — money that made its way into the pockets of ad networks and publishers.
They are not innocent bystanders — they’re looking the other way as easy revenue comes in. For publishers, it’s particularly atrocious because it suggests they’ll expose their readerships to scams for a quick buck.
“In one email, Pulse 360 executive Joe Burton told “email@example.com” (allegedly an email contact for Circa) about complaints his agency was getting from customers that their credit cards were being dinged with unauthorized charges and no one will return their calls. The email was titled ‘Disgruntled customers.’ it said: ‘Can you help out here. If [Rubicon Project] keeps getting all these complaints they will shut you down….’ The email chain contained a bunch of emailed complaints from customers.”
If the FTC really wants to make a dent in this kind of advertising, it just can’t go after the affiliates. The agency needs to come down on the distributors.
Status Quo and the R-Word
Is there a need for regulation? That’s very arguable — in theory, browsers should reject publications that host flog and farticle ads. But I remember getting an email from a source a few weeks after the FTC’s crackdown with screenshots from an AOL site with a bunch of fake news-site advertising. I was tempted to send him back a screen shot from Salon.com with the exact same ads.
I haven’t stopped visiting Salon because the content is worth more than the slight ire I feel when the animated shrinking belly shows up on the right side of the page. (Only slightly more valuable — could you Salon guys lay off the TV show reviews?) I will never click on one because a) if I wanted to lose weight, I’d lay off the beer and hit the elliptical machine; and b) like the majority of Internet users, I know it’s a scam. Having been able to go online for more than half my life (and having been raised with a modicum of common sense), I recognize such advertising screams illegitimacy.
And that’s the status quo: while most browsers roll their eyes at another belly impression, the scammers pick up a decent amount of marks. Those that are as overly arrogant or perhaps delusional as Jesse Willms — he just may think he is running a legitimate operation — get picked up by the Feds. But cut off the head…
To actually make the Internet safer from this kind of fraud, the FTC would need to slap the networks, and possibly the publishers — these operations should be performing due diligence to keep scammers away as a service to consumers (and many do). It’s not like it’s hard to spot the fraudulent stuff — like pornography, you’ll know it when you see it. If it seems fishy, it probably is — even if it isn’t scammy, why do you want something that seems fishy on your site anyway?
Well, publishers may not want the fishiness, but they do want the revenue — without an agency breathing down their necks, what’s the real threat? A couple hundred angry emails and comments from pesky readers? That’s a speck a dirt when there’s millions of uniques visiting a month.
Many ad networks advertise themselves as “acai berry free” — publishers wield the power to kick out networks for serving sketchy ads, which is solid encouragement to stay clean. As for big boys, Google has been trying to play the “we’re too big to run due diligence on all our advertisers.” However, Google just set aside $500 million dollars for a likely Justice Department settlement relating to advertising by illegal pharmacies — the pretty much opens the door for the FTC (as soon as it files its anti-trust suit against the search giant).
Part of the reason I barely batted an eye when the FTC announced its farticle crackdown because it just fingered affiliates. The flogosphere will continue to thrive if that’s the only step taken — come next year, we’ll have a new Jesse Willms to frown and shake our fists at. Media outlets can write more articles along the lines of “Can you believe the nerve of this guy?”
And I’ll shrug, not even noticing the glittering banner on the right promising to help me make thousands a month working from home. By the way, this ad was served to me above and below the fold on the WaPo story on the belly ads: