http://tbm.thebigmoney.com/print/1733
The Anatomy of a Web Advertising Scam
By chadwick.matlin
Created 04/02/2009 - 6:31pm
The Internet wants me to have a flat stomach—and it wants me to have it for free. Over the last few months, those flat stomach ads have followed me around the Internet like a beggar asking for money. On many of my favorite Web sites (including the ones I work for), high-class Internet advertising has been replaced by these low-budget pictures promising a better physical and superficial life.
The ads plead: Wouldn’t I like to click and read a flat-stomach testimonial? And from there, wouldn’t I like to click to see a product that could help me get that flat stomach without even trying? And from there, wouldn’t I like to order that product for free? And wouldn’t I like to give them my credit card info? And wouldn’t I like to investigate a mysterious charge on my credit card bill 30 days after I subscribe to my free product? And wouldn’t I like to hold for two hours while I try to cancel my account after I realize I’ve been had?
Such is the world of flat-stomach advertising. But it’s also the world of stretch mark ads , and white teeth ads , and government grant ads , and get-paid-to-search-Google ads . There are handfuls of these get-beautiful/healthy/rich-quick schemes floating around the Internet, and all their advertising structures behave the same way: Some sketchy ad leads you to some sketchy testimonial page, which then leads you to the sketchy product itself. When you order the product, the vendor doesn’t always make clear that you’re signing up for a free trial, and when that’s over you’ll be charged up to $90 every month until you find a way to cancel. There isn’t much information about why all of these scams operate in the same way, even though this kind of Web advertising is quite prevalent. TBM felt it was time to investigate. The scams are so successful because they’ve created an extremely efficient sales model—for everybody but the consumer. That paradox makes it worth exploring the seedy underbelly of the Web advertising industry. Consider this a TBM public service announcement about the people who make all of this scum possible in the first place.
The Scammer
When tracking the major players in these scams, it’s best to start at the start. At the root you have the vendor: an organization that wants to sell its product and wants help getting it in front of as many people as possible. If the vendor is a shady dealer, either ad networks (Google Adwords , Microsoft adCenter , Yahoo Publisher , etc.) will reject them straightaway, or they’ll quickly be reported as potentially fraudulent. So they need to figure out a better way to get their product in front of the desperate masses.
Unable to advertise for themselves, the vendors turn to mercenaries to help spread the word. The vendor creates something called an affiliate program that gives individuals money every time somebody they refer to the vendor’s site buys the vendor’s product. They’re the ones who are seeding the ubiquitous advertisements for flat stomachs. The affiliates in question don’t care that they’re advertising a scam, because they’re still going to get paid regardless. And payday is quite good—folks on the Internet claim to bring in more than $10,000 a month once they get the hang of being an affiliate. It’s a time-honored element of salesmanship: He who brings in a sale gets a commission—no matter the customer’s ultimate satisfaction with the product.
For example, the flat-stomach ads are primarily a front for acai berry scams. The acai berry is especially popular thanks to endorsements from Oprah and Rachael Ray, so scammers are feasting on its potential. It’s gotten so out of hand that Connecticut’s attorney general is expressing outrage over the acai scams . Some acai berry vendors are legitimate, but they’re crowded out of the marketplace by all of the scammers who are willing to pay high commissions to their affiliates.
I should note that affiliate programs are not, by definition, scams. The most established is Amazon’s, which pays sites a commission for referrals that turn into sales. (Both The Big Money and Slate are affiliates.) The affiliate programs are tainted only when the end program is a bad seed.
The Middleman
Now that the affiliate program has been created, the scamming vendor still has a problem of outreach. Few will know it has an affiliate program, since few know the site exists in the first place. And thus, as happens in every efficient market, a middleman enters the fray.
Here, the middleman is called an affiliate network, and they’re basically the equivalent of temp agencies. They have job boards that wannabe affiliates can peruse. So anybody interested in linking to acai berry products can find all the acai vendors on the job board. When an affiliate signs up via the network, the network is entitled to a cut of the commission. Everybody wins! Except, of course, the scammed consumer.
As middlemen, affiliate networks are uniquely positioned to cut off the scams from reaching wide audiences. Within the industry, there’s a split taking place. In one corner, there are those who want to elevate the craft to be a more professional environment. But on the other side are networks willing to lend their services to any cause. It’s usually easier to peddle scams than accountability. Trip Foster, chief marketing officer for affiliate network Advaliant , told The Big Money that the space is so unregulated that the tainted networks can get away with peddling bad products. Advaliant screens its vendors and affiliates to weed out the scammers, he said, but that doesn’t mean everybody will.
The Mercenary
When an affiliate advertises for a scam, he has two options. He can buy advertising that links straight to the scam vendor’s page (with his affiliate code embedded in the link so he gets a commission if there’s a purchase). But, as we’ve discussed, that method isn’t always best because those pages often get stripped from ad networks.
So instead, they create a landing page. The idea is to create an interstitial page that hypes up the product so that readers are likely to both click through to the product page and buy it once they’re there. The pages usually appear as first-person blogs that have a picture of the author with a short bio and a testimonial about how great the product is. See Jacky ’s, Monica ’s, and Ellie ’s weight loss blogs, all of which feature the same woman’s picture (illegally pulled from iStockphoto ) and all of which link to different weight loss products.
Creating one of these landing pages can take seconds. All you have to do is take somebody else’s landing page, copy the HTML, and make a few superficial changes to personalize the site. (As I’ve written about before, the stimulus scams seem to have an especially prevalent copy-cat culture .) There are even sample landing pages (.zip file) to download on the Internet for those who really want to poach. Of course, nobody can get that upset about landing page theft, since the scam-riddled portion of the industry is based off of deception in the first place. If a landing page isn’t a first-person testimonial, it can be a review site that touts the vendor’s (or multiple vendors’) product as the best , with a link to the page where it can be purchased. Often these sites will say they’re sifting the scams from the legitimate sites, when they’re doing exactly the opposite. How convenient.
The audience
By now, the trap has been set. To entice consumers into the landing pages, the affiliates buy up advertising in a variety of venues, namely search engine, social media, and third-party ad networks. The ad networks will take in the scammy ads because they can’t screen them all ahead of time, and—thanks to the landing pages—they appear to lead to legitimate sites. Google told TBM that they rely on users to report abuses, since they can’t screen all of the ads in their Adwords network . Other networks have the same problem—the scam-fronts are bidding high prices at the ad auctions, so it pays not to check into them too deeply. Facebook is especially egregious . The affiliates keep track of which ads and landing pages are performing the best (offering the most commissions) through free tools like Prosper202 .
Once they’re in the networks, they’re served across the Internet. The search engines will serve the ads on keywords that the affiliates have purchased. The social media sites will serve them based on the demographic data in your profile. And the third-party ad networks will pump them into websites that use their service. This last scenario is why you see the ads pop up on sites like Slate, The Big Money, and other news publications. Most sites use ad networks when they run out of ad inventory they’ve sold themselves. So when advertising is light—as it is in the recession—these ad networks are relied on more heavily. Thus the increase of the scam ads in recent months.
From there, of course, people click on the ads to the landing pages to the vendor pages. Then, when somebody buys the vendor’s product, the money flows through the system, allowing more ads to be bought and more commissions to be paid out.
In a way, it’s a beautiful system. Everybody is intertwined, everybody relies on one another. Its interactions almost seem ecological, as though they’re a food chain contributing to a broader ecosystem. Just don’t call it the circle of life—it’s more like a circle of lies.
***
This piece owes a large bit of thanks to Nickycakes.com , which has a vulgar but indispensible guide to affiliate advertising . Also, the Waffles at Noon blog is ace at keeping track of all the various scams and landing pages . E-mail me if you’ve seen this kind of multilevel marketing scam for other products than those mentioned.
Links:[1] http://wilmens.net/blogs/wp-content/uploads/2009/01/screenshot.png
[2] http://www.ripoffreport.com/reports/0/372/RipOff0372878.htm
[3] http://wafflesatnoon.com/2009/02/16/the-newest-phony-blog-stretch-marks/
[4] http://maryswhiteteeth.com/?t202id=987&t202kw=white teeth
[5] http://www.thebigmoney.com/articles/0s-1s-and-s/2009/02/25/get-your-not-so-free-grant-money
[6] http://google-cash-system.com/gms.php?t202id=8259&t202kw=google money&gclid=CJnc-a2I05kCFRMhnAodegzFug
[7] https://www.google.com/accounts/ServiceLogin?service=adwords&hl=en-US<mpl=adwords&passive=true&ifr=false&alwf=true&continue=https://adwords.google.com/select/gaiaauth?apt=None&ugl=true
[8] https://adcenter.microsoft.com/
[9] http://publisher.yahoo.com/
[10] http://en.wikipedia.org/wiki/AçaÃ_Palm
[11] http://abcnews.go.com/print?id=7132495
[12] http://www.advaliant.com/
[13] http://jackysdietblog.com/
[14] http://www.monicasdietblog.com/
[15] http://elliesweightloss.com/
[16] http://www.istockphoto.com/file_search.php?action=Browse&Cache=8ae59014f78474ba7b757faa9b370727&page=1
[17] http://www.nickycakes.com/wp-content/uploads/2009/02/free_acai.zip
[18] http://www.acaireviewed.org/
[19] http://wafflesatnoon.com/2009/03/01/what-is-facebook-thinking/#more-535
[20] http://prosper202.com/apps/
[21] http://www.nickycakes.com/
[22] http://www.nickycakes.com/newbie-guide/
[23] http://wafflesatnoon.com/
[24] http://wafflesatnoon.com/2009/01/20/the-fake-diet-girls/
[25] mailto:chadwick.matlin tbm@gmail.com
