Category: advertising fraud

Advertising fraud, overcharging advertisers, and related concerns

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Direct Revenue’s Dirty Documents

On Tuesday, the New York Attorney General filed suit against notorious spyware vendor Direct Revenue. In a detailed complaint, the NYAG alleged Direct Revenue surreptitiously installed spyware onto users’ computers and made its spyware exceptionally difficult to remove. The suit includes claims under New York’s General Business Law (prohibiting false advertising and deceptive business practices), New York’s Penal Law (prohibiting computer tampering), and New York’s common law prohibitions against trespass.

The NYAG’s complaint was accompanied by more than a thousand pages of exhibits and appendices. Some of these documents present the results of NYAG’s testing — narratives of misleading and nonconsensual installation, not unlike my own installation tests. But the NYAG also produced a treasure trove of documents: Internal Direct Revenue documents, records, and emails that present their strategy, intentions, and plans in great detail.

I have obtained these additional documents and posted them to a new page:

People of the State of New York v. Direct Revenue, LLC – Documents and Analysis

Some documents and findings of particular interest:

  • Revenues reported at $6.9 million in 2003, $39 million in 2004, $33 million in January-October 2005. 2004 expenses total only $13 million, for a profit margin of 66%.
  • Payments to Direct Revenue’s senior staff, totaling more than $27 million.
  • A list of distributors of Direct Revenue’s spyware, with the number of installations attributable to each.
  • Admission that Direct Revenue for a time sold a “majority” of its advertising through ad networks Traffic Marketplace and ValueClick.
  • Admission that Direct Revenue’s ads appear so frequently that they constitute “user abuse.” But reducing ad frequency lowers company revenues, so frequency stays high.
  • Admission that Direct Revenue previously tracked and transmited users’ GET and POST data — names, addresses, emails — and even sent this data to third parties Hitwise and Compete.com. Itemizes the specific personal information collected from online forms: first name, last name, e-mail address, street address, and zip code. Hitwise reports successfully analyzing and matching users’ IDs, genders, and phone numbers.
  • Instructs making Direct Revenue harder to remove, by deleting its entry from Control Panel’s Add/Remove Programs, because too many users were relying on that method to remove Direct Revenue.
  • Report of April-June 2005 payments from Yahoo, totaling more than $600,000 in those three months alone.
  • Installation by Direct Revenue of Ebates’ Moe Money Maker onto users’ computers.
  • Listing of Direct Revenue’s many names and shell companies, all used to confuse and deceive the public.
  • Complaints from Direct Revenue partners, such as Kazaa (which called Direct Revenue’s ads “purposefully confusing to the user”) and Integrated Search (which wanted Direct Revenue to include an uninstaller in Control Panel, as previously promised)
  • Threatening the Center for Democracy and Technology. Demanding revisions from CNET. Hiring an investigator to track anti-spyware researcher Webhelper, and planning tactics to intimidate him.
  • Claims I am “losing credibility in the industry” and calls me a “fanatic.”
  • Endorses NYAG’s suit against Intermix as an “important opportunity to draw a bright line between purveyors of spyware and legitimate behavioral marketing companies like Direct Revenue.”
  • Scores of complaints from users (1, 2, 3 , 4, 5, 6, 7, 8, 9) Direct Revenue staff call one complaining user an “idiot.”
  • Complaints from Direct Revenue’s investors get special handling. One investor worries that another member of his investment firm, former Secretary of the Treasury Bob Rubin, may learn of Direct Revenue’s practices.
  • Reports daily revenue per user at approximately $0.015 (one and one half cents per user per day). (Compare that revenue with the harm caused to users — the amount a typical user would be willing to pay not to have Direct Revenue installed.)

See also others’ analysis of the documents.

I still have a few more documents to post, and I’ll be uploading them later today.

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The Spyware – Click-Fraud Connection — and Yahoo’s Role Revisited

In August I reported a startling number of notorious spyware programs receiving payments, directly or indirectly, from Yahoo!’s pay-per-click (PPC) (Overture) search system. Yahoo pays numerous other companies to show these ads via syndication relationships. So when a spyware vendor can’t find advertisers to buy its ad inventory directly, the spyware vendor can show Yahoo ads instead. Every time a user clicks on such an ad, the advertiser must pay Yahoo. Then Yahoo pays a revenue share to the spyware vendor that showed the ad. My August article documented relationships between Yahoo and 180solutions, Claria, Direct Revenue, eXact Advertising, IBIS, and SideFind.

My August article covered “just a few of the … examples I have observed and recorded.” Since then, my Yahoo-spyware collection has grown dramatically. I now have many dozens of different examples of Yahoo pay-per-click ads shown within spyware.

My August examples demonstrate what I call “syndication fraud” — Yahoo placing advertisers’ ads into spyware programs, and charging advertisers for resulting clicks. But Yahoo’s spyware problems extend beyond improper syndication. In my August syndication fraud examples, an advertiser only pays Yahoo if a user clicks the advertiser’s ad. Not so for three of today’s examples. Here, spyware completely fakes a click — causing Yahoo to charge an advertiser a “pay-per-click” fee, even though no user actually clicked on any pay-per-click link. This is “click fraud.”

This document offer four fully-documented examples of improper ad displays (1, 2, 3, 4), including three separate examples showing click fraud. I then develop a taxonomy of the problem and suggest strategies for improvement.

The Pay-Per-Click Promise; The Click Fraud Threat

When advertisers buy pay-per-click advertising, they largely expect and intend to buy search engine advertising. If a user goes to Yahoo and types a search term, interested advertisers want their ads to be shown. Ads are supposed to be carefully targeted, i.e. to the specific keywords advertisers specify. And an advertiser is only supposed to pay Yahoo when a user actually clicks the advertiser’s ad.

Click fraud attacks these promises. In canonical click fraud, one advertiser repeatedly clicks a competitor’s ads — or hires others to do so, or builds a robot to do so. Deplete a competitor’s budget, and he’ll leave the advertisement auction. Then the first advertiser can win the advertising auction with a lower bid.

Advertisement syndication also creates a risk of click fraud. Suppose Yahoo contracts with some site X to show Yahoo’s ads. If a user clicks a Yahoo ad at X, Yahoo commits to pay X (say) half the advertiser’s payment to Yahoo. Then X has an incentive to click the Yahoo ads on its site — or to hire others to do so, or to build robots to do so.

Spyware syndication falls within the general problem of syndication-based click fraud. Suppose X, the Yahoo partner site, hires a spyware vendor to send users to its site and to make it appear as if those users clicked X’s Yahoo ads. Then advertisers will pay Yahoo, and Yahoo will pay X, even though users never actually clicked the ads.

The following three examples show specific instances of spyware-syndicated PPC click fraud. In each example, I present video, screenshot, and packet log proof of how spyware vendors and advertisement syndicators defraud Yahoo’s advertisers.

Click Fraud by 180solutions, Nbcsearch, and eXact Advertising – December 17, 2005

PPC advertisers
money viewers
Yahoo Overture
money viewers
eXactSearch
money viewers
Nbcsearch
money viewers
180solutions

The money trail – how funds flow from advertisers to Yahoo Overture to 180solutions

On a test PC with 180solutions (among other unwanted software) (widely installed without consent), I browsed Nashbar.com, a popular bicycling retailer. I received a popup that immediately forwarded traffic to a Yahoo Overture PPC link — faking a click on that link, and charging an advertiser as if a user had clicked on that link, even though I had not actually done so.

Reviewing my packet log, I see that traffic flowed as listed below.

http://tv.180solutions.com/showme.aspx?keyword=bicycle%2aparts+cycling+cycling…
http://popsearch.nbcsearch.com/metricsdomains.php?search=mountain+bike
http://ww3.exactsearch.net/red.php?mc=T%2FcbeGxGNus4%2F3AyiyVWsqV5cRprOptbkiRR…
http://ww3.exactsearch.net/click.php?mc=T%2FcbeGxGNus4%2F3AyiyVWsqV5cRprOptbki…
http://207.97.227.18/clk/?31303b313133343836343333352e39347e74696572313b3030
http://www22.overture.com/d/sr/?xargs=15KPjg149StpXyl%5FruNLbXU7Demw1X18j2tJ5w…
http://clickserve.cc-dt.com/link/click?lid=43000000005485843
http://www.sportsmansguide.com/affiliate/ccx.asp?url=http%3A%2F%2Fshop%2Esport…

See also full packet log, annotated screenshots, and video.

As shown in the diagram at right, the net effect of these practices is that advertisers pay Yahoo, then Yahoo pays eXact Advertising (eXactSearch), which pays Nbcsearch, which pays 180solutions.

All these payments are predicated on a user purportedly clicking an ad — but in fact no such click ever occurred. Because advertisers are charged for pay-per-click “clicks” without any such click actually taking place, this is an example of click fraud.

Click Fraud by 180solutions, Nbcsearch, and Ditto.com – March 2, 2006

PPC advertisers (i.e. SmartBargains)
money viewers
Yahoo Overture
money viewers
Ditto.com
money viewers
Nbcsearch
money viewers
180solutions

The money trail – how funds flow from advertisers to Yahoo Overture to 180solutions

On a test PC with 180solutions (among other unwanted software) (widely installed without consent), I browsed SmartBargains.com, a popular discount retailer. I received a popup that, in its title bar, indicated that it came from 180solutions. Mere seconds later, I was redirected to a duplicate window of SmartBargains.

Reviewing my packet log, I see that traffic flowed as listed below.

http://tv.180solutions.com/showme.aspx?keyword=%2esmartbargains%2ecom+smart+…
http://popsearch.nbcsearch.com/metricsdomains.php?search=smartbargains.com
http://ww2.ditto.com/red.php?mc=T%2FgSdHBNM%2Bg2%2B3AyiyVWsqV5cRprOptbkiRRrZ…
http://ww2.ditto.com/click.php?mc=T%2FgSdHBNM%2Bg2%2B3AyiyVWsqV5cRprOptbkiRR…
http://agentq.ditto.com/click.clk?pid=708811&ss=smartbargains.com&advname=sm…
http://www24.overture.com/d/sr/?xargs=15KPjg1%2DpSgJXyl%5FruNLbXU6TFhUBPycz2…
http://www.smartbargains.com/default.aspx?aid=47&tid=82136

See also full packet log, annotated screenshots, and video.

As shown in the diagram at right, the net effect of these practices is that advertisers pay Yahoo, then Yahoo pays Ditto.com, which pays Nbcsearch, which pays 180solutions.

All these payments are predicated on a user purportedly clicking an ad — but in fact no such click ever occurred. Because advertisers are charged for pay-per-click “clicks” without any such click actually taking place, this is an example of click fraud.

This example also shows what I call “self-targeted traffic.” Notice that the net effect of this click fraud is to show the user the site the user had requested — but to show that site also in a second (“double”) window. Since users end up at the requested site, users may not notice that anything is wrong. But from an advertiser’s perspective, something is very wrong: This process asks SmartBargains to pay Yahoo Overture PPC fees for SmartBargains’ own organic traffic — a lousy deal, since Yahoo Overture is providing SmartBargains with no new leads and no genuine value.

Click Fraud by Look2me/Ad-w-a-r-e, Improvingyourlooks.com, and Two Unknown Parties – April 1, 2006

PPC advertisers (e.g. lasikcookeye.com)
money viewers
Yahoo Overture
money viewers
64.14.206.59
money viewers
improvingyourlooks.com
money viewers
12.129.178.27
money viewers
Look2me / Ad-w-a-r-e

The money trail – how funds flow from advertisers to Yahoo Overture to Look2me / Ad-w-a-r-e

On a test PC with Look2me/Ad-w-a-r-e (among other unwanted software) (installed without my consent), I received a popup that redirected me to and through a Yahoo Overture PPC link. The popup ultimately showed me the lasikcookeye.com site even though I had showed no prior interest in eye problems or eye surgery. Reviewing my packet log, I see that traffic flowed as listed below:

http://www.ad-w-a-r-e.com/cgi-bin/UMonitorV2
http://64.194.221.33/cgi-bin/KeywordV2?query=4047&ID={…}
http://12.129.178.27/redir?aid=1006&cid=162&xargs=ZmlkPTUxJmtleT1sYX…
http://search.improvingyourlooks.com/index.html?red=1&q=lasik%20eye%20su…
http://search.improvingyourlooks.com/?1143930576
http://64.14.206.59/cgi-bin/feedred?c=2188&p=2068&q=lasik%20eye%20surgery&de…
http://www10.overture.com/d/sr/?xargs=15KPjg17hS%2DZXyl%5FruNLbXU6TFhUBQxd7t…
http://www.lasikcookeye.com/

See also full packet log, annotated screenshots, and video.

As shown in the diagram at right, the net effect of these practices is that advertisers pay Yahoo, then Yahoo pays the operators of the server at 64.14.206.59, which pays improvingyourlooks.com, which pays 12.129.178.27, which pays Ad-w-a-r-e.

All these payments are predicated on a user purportedly clicking an ad — except that in fact no such click ever occurred. Because advertisers are charged for pay-per-click “clicks” without any such click actually taking place, this is an example of click fraud. Furthermore, because my prior activity gave no sign of any interest in eye care, this popup sends the advertiser untargeted traffic — also contrary to Yahoo’s representations to advertisers.

Advertiser Lasikcookeye is the victim of these practices and the victim of this click fraud. Lasikcookeye contracted with Yahoo to buy pay-per-click ads shown at Yahoo.com when users performed relevant searches. Lasikcookeye intended (and reasonably expected) that its ad would be shown to appropriate users, and that it would only be charged if a user saw the ad, found it appealing, and specifically chose to click on it. Instead, Lasikcookeye here was charged for a “click” that never took place, and for its site being shown to a user who never asked to see it. Furthermore, Lasikcookeye’s site was shown in a popup, an advertising format users are known to dislike, which risks damaging Lasikcookeye’s good name.

Unlabeled PPC Links Inserted into Third Party Web Sites – by Qklinkserver.com / Srch-results.com, Searchdistribution.net, and Intermix’s Sirsearch – April 2, 2006

The circled link was inserted into the nytimes.com site by Qlinkserver. Clicking the link sends traffic to Yahoo Overture PPC and on to an advertiser. The circled link was inserted into the nytimes.com site by Qklinkserver, without the Times’ consent. Clicking the link sends traffic to Yahoo Overture PPC and on to an advertiser.

PPC advertisers (e.g. shop.com)
money viewers
Yahoo Overture
money viewers
Intermix Sirsearch
money viewers
Searchdistribution.net
money viewers
Qklinkserver.com / Srch-results.com

The money trail – how funds flow from advertisers to Yahoo Overture to Qklinkserver

On a test PC with Qklinkserver (among other unwanted software) (installed without my consent), I observed numerous extraneous hyperlinks inserted into third parties’ sites. Checking these same sites on ordinary uninfected PCs, I received no such links. See e.g. the partial screenshot at right, showing an extra hyperlink inserted into the lead article listed on the New York Times site.

Clicking that extra New York Times link yielded traffic to a Yahoo Overture PPC link and on to a Yahoo Overture advertiser (here, shop.com). Reviewing my packet log, I see that traffic flowed as listed below:

http://www.qklinkserver.com/lm/rtl4.asp?si=20057&k=prime%20minister
http://search1.srch-results.com/search.asp
http://partnernet.searchdistribution.net/go3.aspx?encr=1&nv_click=9JT5m1b…
http://www.sirsearch.com/click.cfm?rurl=http%3a%2f%2fwww10.overture.com%2…
http://www10.overture.com/d/sr/?xargs=15KPjg1%5F5SjJXyl%5FruNLbXU6TFhUBPz…
http://www.shop.com/op/aprod-~Prime+Minister+Print?ost=prime+minister&sou…

See also full packet log, annotated screenshots, and video.

As shown in the diagram at right, the net effect of these practices is that advertisers pay Yahoo, then Yahoo pays Intermix (Sirsearch), then Intermix pays Searchdistribution.net which pays Qklinkserver.com / Srch-results.com.

As shown in the inset image above-right, Qklinkserver.com inserts links into other sites without any on-screen indication that the links come from Qklinkserver, not from the requested sites. Users seeing such links might reasonably think they reflect editorial selection by the requested sites (i.e. New York Times editors picking an appropriate link), when in fact the links merely point to whichever advertisers bid highest at Yahoo.

Note that traffic passes through Intermix’s Sirsearch servers. This is not Intermix’s first involvement with spyware, nor Intermix’s first involvement with Yahoo in the context of spyware. During the New York Attorney General’s summer 2005 investigation of Intermix for improper installation of advertising software onto users’ computers, a NYAG investigator reported that more than 10% of Intermix’s revenues came from Yahoo. The investigator further commented that the NYAG was “not ruling out … going after … Overture” for its role in funding Intermix. My findings here suggest that Intermix’s relationship with Yahoo and Intermix’s funding of spyware may extend beyond what was previously known.

I have tested the Qklinkserver advertising software at length. Of the links I have received from Qklinkserver, every single one ultimately passes through Yahoo Overture. As best I can tell, Yahoo Overture is the sole source of funding for Qklinkserver. (Compare: Yahoo Overture funding 31% of Claria, per Claria’s 2003 SEC S1.)

Understanding the Problem

I see six distinct problems with the Yahoo practices and partners at issue.

  • Click fraud. Through these improper ad displays, Yahoo charges advertisers for “clicks” that didn’t actually occur. This violates the core premise of pay-per-click advertising, i.e. that an advertiser only pays if a user affirmatively shows interest in the advertiser’s ad. Yahoo promises: “Pay only when a customer clicks on your listing.” But that’s just not true here. Instead, through click fraud, advertisers are asked to pay for spyware-delivered traffic, whether or not users actually click.
  • Untargeted traffic. Premium prices for PPC advertising reflect, in part, the extreme targeting of PPC leads: PPC ads are only supposed to be shown to users actively searching for the specified product, service, or term. Yahoo promises: “Advertise only to customers who are already interested in your products or services.” That’s also untrue in some of my examples. in fact spyware-delivered PPC results show Yahoo PPC ads to users with no interest in advertisers’ products or services.
  • Self-targeting traffic. Spyware-delivered PPC ads often target advertisers with their own ads. For example, in August I reported a user browsing the Dell site, then receiving spyware-delivered Yahoo PPC advertising promising “up to 1/3 off” if a user clicked a prominent link. But clicking that link didn’t actually provide any discounts or savings beyond Dell’s usual prices. However, each time a user clicked the link, Dell had to pay Yahoo a PPC advertising fee that I estimate at $3.30. That’s a bad deal for Dell: These users were already at Dell’s site, and there’s no reason why Dell should pay Yahoo or a spyware vendor just to keep them there. Same for self-targeting of SmartBargains, reported above.
  • Failure to label sponsored links as such. Through spyware syndication, Yahoo PPC ads often appear on users’ screens without appropriate labeling. When unlabeled ads appear in or adjacent to search engine results, these ads risk violating the FTC‘s 2002 instructions for advertising disclosures at search engines. See my prior SideFind example, where SideFind justifies bona fide search results with Yahoo PPC ads, without labeling Yahoo’s ads as such. Unlabeled ads also prevent users from understanding the nature of the linked content: For example, recall my Qklinkserver example. Seeing unlabeled text links inserted into ordinary web pages, users reasonably expect that such links were chosen by the sites users were visiting, when in fact such links were unilaterally inserted by unrelated spyware installed without user consent.
  • Low-quality traffic. Advertisers pay Yahoo a premium to reach desirable users at Yahoo.com — sophisticated users, users who are actively engaged in search. In contrast, spyware sends advertisers low-quality users, including users who are less likely to make a purchase. This traffic is not worth the premium price Yahoo charges. Consider: 180solutions sells popups for as little as $0.015 (one and a half cents) per ad display. In contrast, Yahoo charges a minimum of $0.10 — more than six times as much. Yahoo harms advertisers when Yahoo charges advertisers its premium prices for ads ultimately shown through low-quality low-cost channels like 180solutions.
  • Unethical spyware-sourced traffic. Industry norms, litigation, and instructions from policy makers (1, 2) all tell advertisers to keep their ads out of spyware. Discomfort with spyware reflects concerns about installation methods (misleading and nonconsensual installations), privacy effects, other harms to consumers, and harms to other web sites. For these and other reasons, many advertisers make a serious good-faith effort to stay away from spyware. These same advertisers also buy PPC ads from Yahoo — a standard, reasonable practice for anyone buying online advertising. Unfortunately, these Yahoo PPC ad purchases inevitably and automatically put advertisers into notorious spyware, including the programs reported above. By allowing these improper ad placements, Yahoo endangers its advertisers’ good names, and risks putting them in violation of best practices and policy-makers’ guidance.

Each of these problems is serious in its own right. But the examples at hand, in my current and prior reporting, inevitably combine several such problems — making them particularly troubling. The table below attempts to summarize my findings, as to the specific examples reported above and previously.

Click Fraud Untargeted traffic Self-targeting traffic Failure to label sponsored links as such Low-quality traffic Unethical spyware-sourced traffic Software sometimes installed without any user consent
180solutions / Nbcsearch / eXact (December 2005) x n/a* x x x
180solutions / Nbcsearch / Ditto (March 2006) x x n/a* x x x
Look2me / Ad-w-a-r-e / Improvingyourlooks (April 2006) x x n/a* x x x
Qklinkserver / Srch-results / Searchdistribution / Intermix SirSearch (April 2006) x x x x
Claria (August 2005) x x x
eXact Advertising (August 2005) x x x x
Direct Revenue / InfoSpace (August 2005) x x x x x
180solutions / InfoSpace (September 2005) x x x
IBIS / InfoSpace (June 2005) x x x
SurfSideKick / TrafficEngine (September 2005) x x x x x
Hotbar (November 2005) x x x x x

* – These examples entail click fraud — with nothing shown to a user before a PPC ad was invoked, and hence no opportunity for improper ad labeling.

An empty box should not be taken to be an endorsement of a vendor’s practices, or an indication that that vendor does not perform the specified practice. For example, although I have not chosen to post an example of eXact Advertising harming merchants via self-targeting, I have observed such self-targeting.

Yahoo’s Click Fraud and Syndication Fraud in Context

Many others have alleged click fraud at Yahoo. (1, 2, 3) But others generally infer click fraud based on otherwise-inexplicable entries in their web server log files — traffic clearly coming from competitors, from countries where advertisers do no business, or from particular users in excessive volume (i.e. many clicks from a single user). In contrast, my proof of click fraud is direct: As documented and linked above, I have captured click fraud on video and in packet logs. Yahoo may argue about advertisers’ inferences in other instances, i.e. disputing that advertisers have really found click fraud. But it’s far harder to deny the click fraud shown in my examples.

In the examples I show above and previously, Yahoo’s problem results from bad partners within its network. Yahoo syndicates ads to numerous partners, many of whom syndicate ads to others, some of whom then syndicate ads still further. The net effect is that Yahoo does not know who it’s dealing with, and therefore cannot exercise meaningful supervision over how its ads are displayed. I consider this a bad idea — bad business, bad for quality, bad for accountability. But Yahoo need not listen to me. Instead, consider instructions from New York Attorney General staff member Ken Dreifach: “Advertisers and marketers must be wary of fraud or deceptive practices committed by their affiliates, even [affiliates] that they have no working relationships with.” (Quote from MediaPost, summarizing Dreifach’s remarks.)

Yahoo’s “Whack-A-Mole” Problem

The many bad partners in Yahoo’s network make fraud particularly hard to block: When Yahoo terminates one fraudster, that fraudster’s partners find another way to continue operations.

Notice that the first and second examples (above) both show click fraud that originates with 180solutions and Nbcsearch. Yet Nbcsearch’s relationship with Yahoo Overture differs between these two examples: In the first, Nbcsearch gets ads from eXactSearch which gets ads from Yahoo; in the second, Nbcsearch instead gets Yahoo ads from Ditto.com. My testing suggests that Yahoo may have terminated the former ad channel at some point after my December testing. But Nbcsearch’s efforts to defraud Yahoo advertisers were not stymied by Yahoo’s possible termination of the first channel; Nbcsearch was able to find a new channel, i.e. Ditto.com, by which to continue to perform click fraud.

Yahoo’s enforcement difficulties are also borne out in its unsuccessful attempts to sever ties with 180solutions and Direct Revenue. After I highlighted these vendors in my August report, it seems Yahoo attempted to terminate its relationships with them. Yet 180 continued not just to show Yahoo ads, but also to perform click fraud, as documented in the first two examples above. Furthermore, as recently as February 2006, I have continued to see Direct Revenue serving popups that ultimately show Yahoo PPC ads. So even when Yahoo seeks to sever relationships with a partner as well-known as 180solutions or Direct Revenue, it seems Yahoo is unable to do so.

What Comes Next

After my August report, Yahoo terminated several of the specific wrongdoers I identified. I expect and hope that Yahoo will respond similarly to the findings reported here. If I learn of such a response, or if I receive any other relevant communication from Yahoo, I will update this page accordingly.

But it is not a sustainable approach for me to perform occasional public audits for Yahoo. These reports are infrequent, hardly sufficient to protect advertisers from ongoing fraud. Furthermore, these reports are merely illustrative — giving a few examples of a broad class of problems, but reporting only a small proportion of the fraud of which I am aware.

Yahoo recently announced its support (as a founding sponsor) of TRUSTe‘s forthcoming Trusted Download Program. The Trusted Download program intends to certify advertising software — so advertisers can confidently buy ads from such programs. I have a variety of concerns about the program — including that its standards may be too lax, that it will face exceptional difficulties in performing meaningful enforcement, and that I don’t know that any “adware” deserves a certification or endorsement. But even if Trusted Download were fully operational and working as expected, it would not have identified or prevented the problems described in this article. At best, Trusted Download would tell Yahoo that it may work with whatever adware vendors earn TRUSTe’s certification. But Yahoo’s problem isn’t uncertainty about which adware vendors are good. Instead, Yahoo’s problem is that, time and time again, it finds itself working with (and its advertisers defrauded by) notorious “adware” vendors — vendors Yahoo has already resolved to avoid (e.g. 180solutions, Direct Revenue), or vendors that wouldn’t come close to passing any ethics test (e.g. Qklinkserver, Look2me/Ad-w-a-r-e). Trusted Download doesn’t and won’t monitor advertisement syndication; Trusted Download won’t and can’t prevent these bad Yahoo PPC syndication relationships.

I see two basic strategies for Yahoo. Yahoo could try to limit its exposure to fraud, i.e. by scaling back its partner network, by more thoroughly vetting its partners, and by prohibiting its partners from further resyndicating Yahoo’s ads. Alternatively, Yahoo could try to detect fraud more thoroughly and more quickly, i.e. by implementing aggressive and robust testing methods to find more examples like those above, and like the dozens more examples I have on file. I tend to think both strategies are appropriate; in combination, they might serve to blunt this growing problem. But merely ignoring the issue is not a reasonable option; Yahoo’s advertisers pay top dollar for Yahoo PPC ads, and they deserve better.

Yahoo cannot expect these fraudulent techniques to disappear. Yahoo is an attractive target for fraudsters due to Yahoo’s high advertising charges and Yahoo’s high payments to partners. As spyware vendors find other revenue sources increasingly difficult (i.e. because advertisers do not want to buy spyware-delivered advertising), spyware vendors are likely to continue to turn to more complex advertising channels such as PPC, which are more amenable to fraud due to their reduced transparency and increased complexity. Yahoo, like other PPC services, needs to anticipate and block this growing problem.

Similar issues confront Google — though, in my testing, more often through bad syndication and less often through click fraud. I’ll cover Google’s problems in a future piece. Meanwhile, see my prior articles about Google and spyware: 1, 2.

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Affiliate Hall of Shame updated February 19, 2006

I’ve always had high hopes for affiliate marketing — a great way for small web sites to cover their costs and make a reasonable return, by promoting well-known merchants relevant to their visitors. I stand by this optimism, in general. But after several years of watching this space, my expectations have fallen significantly. I’ve seen countless examples of “rogue” affiliates cheating their “partner” merchants. And I’ve seen plenty of underhanded practices from merchants too.

Popular wisdom says most “rogue” affiliates are small. The big guys have too much to lose by getting caught. So we can trust them to behave. Or can we?

Intro to Affiliate Marketing and Small-Time Rule Breakers

In principle there’s nothing unique about affiliate marketing: As in other marketing channels, merchants pay third parties to promote their products. And as in other marketing channels, sometimes this advertising goes terribly wrong — showing merchants’ ads in ways that don’t reflect well on the merchant or the ad channel, cheating merchants by claiming payments not fairly earned, and siphoning payments from other ad channels.

What’s notable about affiliates is the relative prevalence of bad practices. Through affiliate networks, merchants sign up to advertise with hundreds of small companies (and individuals) they don’t really know and haven’t reasonably investigated. Worse, when an affiliate gets caught breaking the rules, the affiliate often just signs up under a new name: Having earned little reputation, the affiliate has little to lose, so there’s little penalty for starting fresh under a new name. With such limited accountability, enforcement is tougher than in other channels. Hence my sense that there are more bad actors in affiliate marketing than in other kinds of marketing.

I show examples of these problems in my September piece on affiliates funding spyware and simultaneously defrauding merchants. See also my Affiliate Summit slides showing new examples of similar practices.

Of course not all affiliate fraud uses spyware. There’s affiliate cookie-stuffing, whereby affiliates claim commissions without users actually clicking through a link to merchants’ sites. (This violates networks’ rules, which say a merchant only has to pay a commission if a user clicks a link.) See also my index of additional affiliate research and testing.

In calling these rule-breakers “small,” I don’t mean to say they don’t make real money by cheating merchants. Quite the contrary! But these “small” affiliates earn fees without developing brand names for themselves. They’re “small” in the sense of appearing and disappearing willy-nilly, without anyone much caring or, in many cases, even noticing.

Big Affiliates Breaking the Rules: CoolSavings and MyPoints

With slim to nonexistent reputations, small affiliates are often tempted to flout the rules. But major affiliates also compromise ethics in order to increase profits.

Notorious among affiliates gone bad is ShopAtHomeSelect, whose software has been widely installed without consent and has been widely observed to “force clicks” without an affirmative end user action. These practices got SAHS kicked out of CJ in fall 2005. But oddly SAHS remains in LinkShare.

Turning to fresh research: Consider well-known affiliates CoolSavings and MyPoints. CoolSavings is a $16.7+ million company, featured in various LinkShare promotional materials, even touted in Wall Street Journal coverage of affiliate marketing. MyPoints is featured in a CJ case study, and LinkShare lists MyPoints with just five other premium “partners” on a special page. So CoolSavings and MyPoints are big, well-respected affiliates. If they don’t follow the rules, no one will.

As it turns out, CoolSavings and MyPoints are widely violating applicable rules. Despite clear prohibitions from affiliate networks, both CoolSavings and MyPoints recently began using “adware” (“spyware,” most users would say) to recruit new users, at the expense of their targeted “partner” merchants. See screenshots below, showing CoolSavings and MyPoints receiving traffic from Direct Revenue. When users visit targeted merchants, Direct Revenue shows CoolSavings or MyPoints pop-ups, which encourage users to register and ultimately to click through to merchants’ sites. Then merchants end up paying CoolSavings or MyPoints for users they already had — expenses they need not have paid, but for CoolSavings’ and MyPoints’ intervention.

CoolSavings Targeting Buy.Com via Direct Revenue   MyPoints Targeting a CJ Merchant via Direct Revenue
CoolSavings Targeting Buy.Com via Direct Revenue
(January 12, 2006)		   MyPoints Targeting a CJ Merchant via Direct Revenue
(January 2, 2006)

CoolSavings and MyPoints’ ads violate applicable affiliate network rules. Commission Junction prohibits affiliates from buying media from “ad services that download and install software on an end user’s computer” — so traffic from Direct Revenue is clearly off-limits. But that’s not the only rule these pop-ups violate. Recall CJ’s rule against “in any manner … modif[ying]” others’ sites. And LinkShare forbids (PDF) “alter[ing] in any manner the Web user’s … view … of … any network affiliate webpage” (rule 1.(a)(i)).

In my view, these Direct Revenue-delivered pop-ups are serious offenses against the targeted merchants. CoolSavings’ and MyPoints’ pop-ups appear as users browse affiliate merchants’ web sites. For example, a CoolSavings pop-up (shown above, at left) appeared as I browsed Buy.com, a CoolSavings partner: Buy.com pays CoolSavings for sending it customers. But despite this alliance and despite applicable affiliate network rules, CoolSavings still uses use Direct Revenue to grab Buy.com customers.

When MyPoints performs similar targeting of its merchant partners, MyPoints explicitly attempts to capitalize on its partners’ goodwill. In the areas blocked out in green (in the right screenshot above), MyPoints specifically names the company a user was visiting before MyPoints interrupted. These references give MyPoints’ ads a further appearance of legitimacy. But the references simultaneously tarnish MyPoints’ partners’ good names — by putting their names into Direct Revenue pop-ups.

Earlier this month, I brought MyPoints’ use of Direct Revenue to the attention of a targeted CJ merchant. Since that report, I haven’t seen many MyPoints pop-ups appearing through Direct Revenue. But affiliates ought to comply with applicable rules from the get-go, without me first identifying or reporting infractions. Merchants should demand no less.

I will update this piece with any material statements I receive from merchants, networks, or CoolSavings or MyPoints. I will be particularly interested in penalties, if any, assessed against these affiliates for their violations of networks’ rules.

Update (January 31): I have received no response from CoolSavings, MyPoints, or any affiliate network. But despite my public documentation of CoolSavings’s practices, CoolSavings’s “adware”-delivered ads continue. See screenshot below, showing a CoolSavings FreeStyleRewards popup delivered by 180solutions (“Zango”), as users browse Circuit City’s web site.

CoolSavings Targeting Buy.Com via Direct RevenueCoolSavings’ FreeStyleRewards Continues to Target Circuitcity.com via 180solutions (January 28, 2006)

FreeStyleRewards’ merchant list (registration required) confirms that Circuit City is a FreeStyleRewards advertiser. So not only is CoolSavings FreeStyleRewards buying adware-delivered traffic (in specific violation of an applicable Commission Junction rule), but FreeStyleRewards is also targeting its business partner’s traffic.

CoolSavings FreeStyleRewards cannot claim ignorance of its traffic sources. For one, these practices have been publicly-documented for two weeks, since my initial January 16 article. Furthermore, 180 sends traffic to a FreeStyleRewards URL that specifically confirms CoolSavings FreeStyleRewards’s knowledge of the traffic’s origin: http://www.freestylerewards.com?ref=metricsdirect&bn=www_circuitcity_com&bl=lp-ce . Notice the highlighted reference to MetricsDirect, the advertising sales division of 180solutions.

Update (February 17): I have received a statement from MyPoints. I quote it here in its entirety:

“MyPoints is a leader in permission-based marketing and is firmly committed to marketing ourselves through channels and with products that respect the privacy and experience of consumers and deepen our productive relationships with our advertisers.

From November 2005 through the middle of January 2006, MyPoints ran a small-scale campaign with an “adware” firm.

When we became aware that the campaign might be in conflict with the best interests of our advertisers, we immediately pulled the advertisements and terminated our relationship with the company.

MyPoints will continue to be extra diligent with regard to selection of acquisition partners. We maintain extremely strong relationships with the affiliate networks and their merchant partners. MyPoints continues to be a leader in opt-in marketing and sets the highest bar possible with respect to privacy, permission and choice.”

CoolSavings Targeting Buy.Com via Direct RevenueCoolSavings Continues to Target Its Merchants via Hotbar
(February 19, 2006)

Update (February 19): I have continued to observe CoolSavings ads appearing through advertising software, still in violation of applicable CJ rules and stil targeting CoolSavings merchants. See screenshot at right, observed last week on a PC running Hotbar, as I browsed the web site of a CoolSavings merchant.

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How Yahoo Funds Spyware updated September 5, 2005

Yahoo’s Overture (recently renamed Yahoo Search Marketing) allocates pay-per-click (PPC) ads among Yahoo’s network of advertisers. When users run searches at yahoo.com, Yahoo’s advertisers are assigned placements at the top, right, and bottom of search results. Advertisers pay Yahoo a fee when users click on their ads.

But Yahoo doesn’t just show advertisers’ ads on yahoo.com; Yahoo also distributes advertisers’ ads to Yahoo’s various syndication partners. Many of these partners are entirely legitimate: For example, most advertisers will be happy to show their ads to users running searches at washingtonpost.com, where Yahoo sponsored links complement searches of Post articles.

However, serious concerns arise where Yahoo syndicates advertisers’ ads to be shown by advertising software installed on users’ PCs — software typically known as spyware or adware. In my testing, Yahoo’s funding of spyware is widespread and prevalent — an important source of revenue for many spyware programs installed on millions of users’ PCs. Were it not for Yahoo’s funding of these programs, the programs would be far less profitable — and there would be fewer such programs trying to sneak onto users’ PCs.

Yahoo’s funding of spyware is not unique. I’ve recently written about Google’s funding of similar bad actors (1, 2). Earlier this year, FindWhat disclosed related problems, admitting that terminating its dubious distributors would reduce revenues by at least 5%. But in my hands-on testing of various spyware-infected PCs, I find that I receive Yahoo-syndicated ads more frequently than I receive such ads from any other single PPC network.

This article proceeds in three parts. First, I show examples of Yahoo ads supporting Claria, eXact Advertising, Direct Revenue, 180solutions, and various others; I also review the objectionable practices of each of these vendors. (Numerous additional examples on file.) Second, I review Yahoo’s disclosures to advertisers — finding that Yahoo has failed to tell advertisers about its controversial syndication partners, even in general terms. I conclude with recommendations to Yahoo (and other PPC search engines that allow syndication), as to how to put an end to this mess and avoid such problems in the future.

Claria (Gator / GAIN): SearchScout Popunders of Yahoo Sponsored Links

A Yahoo Overture popunder, delivered by Claria, targeting a Google search for the same phrase. Shown after activating the popunder. A Yahoo Overture popunder, delivered by Claria, targeting a Google search for the same phrase. Shown after activating the popunder.

A Yahoo Overture popunder, delivered by Claria, showing sponsored results for A Yahoo Overture popunder, delivered by Claria, showing sponsored results for “computer” when users visit Dell.com. Shown after activating the popunder and right-clicking the ad to show its destination.

    PPC advertisers (i.e. Dell)    
money viewers
Yahoo Overture
money viewers
Claria (Gator / GAIN)

The money trail – how funds flow from advertisers to Yahoo Overture to Claria.

Likely Yahoo’s largest single advertising software syndicator, Claria shows Yahoo Overture pay-per-click ads in popunders triggered by users’ web browsing.

Before showing Yahoo ads, Claria software must first become installed on users’ computers. Claria’s installation often proceeds without meaningful user consent. For example, Claria often gets installed through software bundles — where a user seeks one program but gets Claria too. Historically, Claria’s bundles have featured lengthy license agreements (as long as 5,900+ words and 63 on-screen pages), broken license formatting (missing line breaks, making section headings hard to find), and substantively unreasonable terms (including restrictions on how users can remove Claria software). Claria also promotes its software through banner ads — including ads on kids sites, claiming to fix computer clocks or improve computer security, showing a license only after installation has begun and cannot be cancelled. Some Claria uninstallers don’t work — leading users in circles rather than actually removing Claria software.

Claria’s core business is showing pop-up ads specifically purchased by advertisers. (See my 2003 listings, including well-known advertisers. See also PC Pitstop listing based on Claria 2003 disclosures.) But Claria also shows popunders of Yahoo Overture sponsored links. Search for “computer repair” at any major search engine, and Claria adds a popunder giving Yahoo Overture ads for that same term. Sponsored link popunders also target specific web sites. Visiting Dell often yields a Claria popunder of Yahoo Overture ads for “computer.”

Claria’s provision of Yahoo Overture sponsored links raises clear questions of business benefit for affected advertisers. In the second screenshot at right, the user was already at the Dell.com site. (Indeed, Dell might have just paid several dollars to reach that user, via a pay-per-click ad at Yahoo, Google, or elsewhere.) Claria’s popunder risks drawing the user’s attention away from Dell — but if the user then clicks on the prominent Dell ad in Claria’s Overture listing, Dell has to pay again for the same user who was already at the Dell site. Why pay Yahoo and Claria to get the user back, when it was they who took the user from Dell in the first place?

Claria’s provision of Yahoo Overture sponsored links also presents ethical concerns. Many advertisers dislike Claria’s practices — including its aggressive methods of becoming installed on users’ PCs, its serious effects on privacy, and its harm to computer performance. Indeed, when I previously revealed that, through another channel, Dell was advertising with Claria in mid 2004, Dell staff sought to distance Dell from Claria, commenting “[T]oday we do not do business with anyone like Claria.” But despite Dell’s stated dislike of Claria, Dell does help fund Claria when Dell purchases pay-per-click ads from Yahoo: Payment flows from Dell to Yahoo to Claria, as shown in the diagram at right. Same for thousands of other Yahoo Overture advertisers.

In the future, Claria purports to plan to shut down its popup business. That’s a move I applaud — it’s been a bad business from the start. But at present Claria still serves lots of popups — including Yahoo Overture popunders as frequently as every few minutes. These ads are big money: Claria’s 2003 SEC S1 discloses receiving $31 million from Yahoo in 2003 alone — despite a relationship only in place for 9 months of that year. Annualizing the payment and taking account of the dramatic increase in pay-per-click fees, Yahoo might now be paying Claria $50 million or more per year. (It’s hard to know for sure because Claria hasn’t filed more recent financial disclosures, and Yahoo doesn’t include this level of detail in its financial reports.)

eXact Advertising – Popups and Sidebars of Yahoo Sponsored Links

A Yahoo Overture auto-opening sidebar, delivered by eXact Advertising, targeting Google search results. A Yahoo Overture auto-opening sidebar, delivered by eXact Advertising, targeting Google search results.

  PPC advertisers
money viewers
   Yahoo Overture   
money viewers
eXact Advertising

The money trail – how funds flow from advertisers to Yahoo Overture to eXact Advertising.

Claria claims to always install with consent — however tricky or ill-gotten, per my testing and documentation. But other Yahoo Overture syndicators can’t even make this claim. On dozens of occasions, I have observed and recorded software from eXact Advertising installed through security holes, with no notice or consent. (Some examples: 1, 2.) I’ve also seen eXact installed by tricky popups claiming to be required to view sexually-explicit videos, and by unrequested popups claiming to offer “browser enhancements.” Others have reported eXact bundled by P2P-distributed videos purporting to offer child pornography, and even by instant messenger worms. In short, when a user has software from eXact, the user is unlikely to have granted meaningful informed consent to the installation, and the user may not have granted any consent at all. Reporters tell me that eXact claims to have fixed these problems, but that’s just not true: I’ve received nonconsensual installations of eXact software this very week. Videos on file.

Despite its poor installation practices, eXact receives Overture sponsored links, shows these advertisements to users, and presumably is paid by Yahoo for doing so.

See screenshot at right, showing an eXact auto-opening sidebar that appeared as I ran a search at Google. The sidebar shows Yahoo Overture links, and clicking a link sends users to Overture and on to the advertiser (without passing through any other search intermediary). Notice the Overture reference in the browser status bar as I hold my mouse over a sponsored link.

To typical users, the eXact-delivered Yahoo Overture sidebar appears to be an integrated part of search results — presumably delivered by Google (or whatever other search engine the user had requested). Notice the absence of any distinctive branding, logo, disclosure, or other identification that the sidebar comes from eXact and Overture. To find such a disclosure, a user must scroll to the bottom of the sidebar. Even there, the disclosure is truncated and hard to read. Screenshot.

eXact’s BullsEye service also shows sponsored link listings in freestanding windows. Here too, results are obtained from Yahoo Overture. Screenshot.

Direct Revenue – Popups and Popunders of Yahoo Sponsored Links

A Yahoo Overture popunder, delivered by Direct Revenue, targeting Dell. Shown after activating the popunder. A Yahoo Overture popunder, delivered by Direct Revenue, targeting Dell. Shown after activating the popunder.

  PPC advertisers (i.e. Dell)  
money viewers
   Yahoo Overture   
money viewers
InfoSpace
money viewers
Direct Revenue

The money trail – how funds flow from advertisers to Yahoo Overture to Direct Revenue.

Direct Revenue installations are at least as poor as eXact. I have numerous videos on file showing DR installed without consent (one such video on my public site). DR also uses various other tricky methods to get installed — like tricky popups, bundles, etc. But DR is perhaps worse than other advertising software in its unusual difficulty of removal (requiring downloading a special uninstaller from DR’s web site). DR is also unusual in its ability to disable and delete other software on a user’s PC.

Despite these troubling practices, DR also shows Yahoo Overture ads. See e.g. the example ad at right. The searchblazer results appeared when I browsed to Dell.com. Notice Direct Revenue’s “Aurora” branding in the upper-left corner and title bar. Although the ad’s body lacks any Direct Revenue branding or logo, the ad was loaded from the search.offeroptimizer.com server, a server under DR’s control. (Offeroptimizer.com is a well-known DR domain.) Furthermore, clicking on a sponsored link within the ad caused traffic that first passed through search.offeroptimizer.com en route to Overture. In short, this ad is not a rogue advertiser buying traffic from Direct Revenue. Rather, these sponsored links were specifically placed by Direct Revenue itself.

When I clicked on the first sponsored link shown at right, traffic flowed as listed below. See also full packet log.

http://xadsj.offeroptimizer.com/c/click.php?c=48685&s=5261&…
http://msxml.infospace.com/_1_B2HUEF099WI63__dirrev.feed.pu1/…
http://www10.overture.com/d/sr/?xargs=…
http://landingstrip.dell.com/landingstrip/ls.asp?CID=8278&LID=230157&…

As indicated in the diagram at right and in the traffic flow above, Yahoo Overture syndicates its ads to InfoSpace, and InfoSpace in turn syndicates these ads to Direct Revenue. This series of relationships makes it particularly hard for Yahoo Overture to know where its advertisers’ ads will appear: Yahoo must count on InfoSpace to assure the quality, ethics, and compliance of InfoSpace’s partners.

This is not the first instance of InfoSpace partners with questionable practices. In June I documented Google ads syndicated to the IBIS Toolbar (also known to become installed without consent). Like Overture ads passing through InfoSpace en route to Direct Revenue, these Google ads were passed from Google InfoSpace to IBIS.

As in the Claria examples above, Direct Revenue syndications of Yahoo Overture ads often ask advertisers to pay for visitors already at their sites. In the example above, Dell was targeted by a list of sponsored links that places Dell in both of the top two positions. If a user clicks on one of these links, Dell pays Yahoo (and ultimately Direct Revenue) for a user who was already at the Dell site. Screenshot.

180solutions – Popups of Yahoo Sponsored Links

A Yahoo Overture popunder, delivered by Direct Revenue, targeting Dell. Shown after activating the popunder. A Yahoo Overture popup delivered by 180solutions.

  PPC advertisers (i.e. Driverloans)  
money viewers
   Yahoo Overture   
money viewers
InfoSpace
money viewers
180solutions

The money trail – how funds flow from advertisers to Yahoo Overture to 180solutions.

When I first posted this piece, I included no mention of 180solutions. My rationale: They’ve been involved in so many widely-publicized spyware scandals — from installing without consent, to installing with euphemisms (but no EULA) at kids sites, to installing at child porn sites — that undisclosed syndication of Yahoo Overture ads seemed like the least of their problems. Perhaps that’s right. But multiple readers asked me whether 180 wasn’t involved also, and why 180 wasn’t included in my write-up. So make no mistake about it: 180 shows Yahoo Overture ads too.

The screenshot at right shows a popup of Yahoo Overture ads delivered by 180solutions. In testing, I click on the ad, and traffic flows to InfoSpace, then to Overture, then to the advertiser. See traffic log below, and full packet log. See also a video of this click, showing the cookies created as a result of the click.

http://searchresults.180searchassistant.com/clicks.php?p==…
http://msxml.infospace.com/_1_YWCU9J03JUL8FV__180sol.feed/…
http://www10.overture.com/d/sr/?xargs=…
http://www.driverloans.com/app/2p1a?x=seoyahoo:value

Other Advertising Software Installed Improperly – Showing Yahoo Sponsored Links

Yahoo Overture ads in an auto-opening sidebar delivered by Sidefind, targeting type-ins to Dell with Dell sponsored links. Yahoo Overture ads in an auto-opening sidebar delivered by Sidefind, showing Dell sponsored links in response to type-in requests for the Dell.com site.

  PPC advertisers (i.e. Dell)  
money viewers
   Yahoo Overture   
money viewers
81.201.104.136
money viewers
trafficengine.net
money viewers
SideFind

The money trail – how funds flow from advertisers to Yahoo Overture to SideFind.

Claria, eXact Advertising, Direct Revenue, and 180solutions are all relatively well-known programs — each installed on millions (or tens of millions) of PCs, and each backed by major investors. But Yahoo also helps to fund vendors who are far less well-known.

Earlier this summer, in the course of documenting Google funding IBIS, I also prepared detailed proof showing how Yahoo ads get syndicated to IBIS too. Video and packet logs on file.

Just this past week, I happened to test a computer infected with a variety of unwanted software (a few disclosed in license agreements; most not). I observed that traffic was sent to Yahoo from both “Slotchbar” (an unrequested toolbar added to my test PC’s browser without my consent) and “SideFind” (an auto-opening browser sidebar, also installed without consent). I have video and packet logs on file, showing these nonconsensual installations as well as their syndication of PPC advertisements from Yahoo Overture. The screenshot at right shows the auto-activating SideFind sidebar, targeting a type-in request for Dell with various sponsored links, largely pointing back to Dell.

These are just a few of the additional examples I have observed and recorded.

In some instances, Yahoo’s dealings with these smaller spyware vendors entail traffic passing through multiple levels of intermediaries. For example, when SideFind sends traffic to Yahoo Overture, the traffic passes through trafficengine.net and then through an unnamed server at IP address 81.201.104.136 (reportedly operated by Copernic/Inktomi) before reaching Overture. See diagram at right, traffic log below, and full packet log.

http://www.sidefind.com/ist/scripts/log_clicks.php?account_id=…
http://feeds.trafficengine.net/click.ashx?key=computers…
http://81.201.104.136/fast-cgi/bsc?context=redir…
http://www6.overture.com/d/sr/?xargs=…
http://landingstrip.dell.com/landingstrip/ls.asp?CID=8278…

In principle, these many levels of intermediation might make it especially hard for Yahoo to know where traffic begins. However, Yahoo ultimately has a direct relationship with some final source who sends the traffic to Yahoo. (In this example, Yahoo has a direct relationship with the operators of the 81.201.104.136 server.) So Yahoo can require that that final source take steps to keep Yahoo’s ads out of spyware. Furthermore, syndicated traffic often includes a HTTP Referer header that gives the name of the originating site. For example, in the Sidefind packet log, Yahoo’s servers receive a HTTP Referer header bearing the domain name sidefind.com, making it easy for Overture to see where traffic began. With its servers specifically receiving the name and URL of the traffic’s source, Yahoo cannot claim not to know where its ads are being shown.

Yahoo’s Failure to Disclose

If Yahoo’s advertisers were fairly advised of Yahoo’s plan to syndicate their ads to spyware programs, Yahoo might claim to be acting solely as their agent; perhaps advertisers want to buy advertising from Claria, eXact, DR, 180, and other such vendors. But in fact Yahoo fails to tell advertisers what will occur — so Yahoo’s syndication of advertisers’ ads cannot be claimed to occur with advertisers’ authorization.

Yahoo’s marketing materials are silent on the risk of spyware syndication, even where Yahoo’s syndication relationships are large and longstanding (i.e. Claria). Within Yahoo’s marketing materials to solicit new advertisers, Yahoo’s “Publisher Network” page mentions various syndicators of Yahoo ads, but Yahoo fails to mention even a single “adware”-type program. Yahoo’s formal Advertiser Terms and Conditions doesn’t mention adware either, and this document discloses advertisement syndication only to say that Yahoo syndicates ads to “various third parties who may be authorized by Overture to make the Sponsored Listings Marketplace Results available as a link from, an add-on service to, or otherwise in connection with Third Party Products.” Yahoo defines these third-party products broadly, as “Web sites, content, applications and/or e-mails.” “Applications” alludes to spyware — but makes no mention of the specific nature of these applications, nor of the likelihood that these applications install by security exploits, trickery, or taking advantage of users’ naivete.

Only at Yahoo’s privacy page does Yahoo make specific mention of any of its advertising software syndicators. Even there, Yahoo mentions only Claria, and Yahoo calls Claria an “ad network” — without mention of its adware, its software download, and its substantial privacy consequences. Furthermore, Yahoo’s privacy page states only that Yahoo has a “relationship” with Claria — but says nothing about the nature or scope of that relationship, i.e. that Claria shows Yahoo Overture ads. In any event, advertisers are unlikely to look to a page about consumer privacy in order to learn where their ads will be shown.

Given the perceived importance and value of Yahoo’s pay-per-click advertising network, some advertisers might choose to advertise with Yahoo despite the blemish of Yahoo’s dealings with spyware companies. Others might decide not to advertiser with Yahoo at all, if advertising with Yahoo necessarily entails supporting spyware. But where Yahoo fails to disclose these relationships, advertisers are denied this choice.

What Yahoo Should Do

In my view, Yahoo — and other PPC networks facing similar problems — should begin by developing and distributing clear rules for who may syndicate their ads. Last year a Yahoo spokesperson told eWeek that “Overture screens its distribution partners to make sure they gain user permission before downloading software.” “Permission” may sound clear-cut, but in practice it’s a surprisingly imprecise concept. What about “permission” obtained under false pretenses — like promising to fix a user’s clock or to improve security, but actually adding advertising software? What about “permission” obtained from a user at a kids site? What about syndicators that buy traffic from advertising software installed without consent, but that don’t make such software of their own? PPC networks need rules that speak to these situations — presumably forbidding all these methods of trickery and deception.

After clarifying their stance on spyware syndicating their ads, PPC networks need to redouble their efforts at enforcement. Tellingly, even Yahoo’s “permission” standard is violated by the frequent nonconsensual installations of Direct Revenue and eXact Advertising (links above). Nonconsensual installations of these programs are well known to those who test and study spyware, and they’re frequently reported at spyware news sites like Spyware Warrior. PPC network staff need to become familiar with these basic industry sources and testing methods, and they need to enforce their rules accordingly.

At present, Yahoo has many PPC syndicators — apparently hundreds or thousands. (Yahoo does not disclose all its syndicators.) Finding all rogue syndicators may prove hard, especially if Yahoo’s syndicators have further partners of their own (as in the Direct Revenue / InfoSpace and SideFind examples, above). In this article, I’ve focused on a few large and well-known syndicators who rely on software installed on millions of PCs, but smaller players are often harder to find and identify. Nonetheless, I’ve found dozens of rogue PPC syndicators using only a single off-the-shelf PC in my lab. (See above.) With all their resources, big PPC networks (like Yahoo) can surely do far better.

Enforcement also needs to include real penalties for those who break the rules. Merely ejecting a rogue syndicator does not deter future violations: Others see that they can make money from PPC syndication through spyware, anticipating only a slap on the wrist when these practices are discovered. A better enforcement strategy would seek to recapture fees previously paid to rogue syndicators — then refund advertisers for ads shown improperly. If a PPC network adopted this strategy and sued its rogue syndicators where necessary, other rogues would be less anxious to follow.

Beyond advertiser backlash and consumer demand, PPC networks face regulatory pressure to avoid supporting spyware through PPC syndication. For example, in the course of their investigation of Intermix, staff of the New York Attorney General revealed that Yahoo contributed 10% of Intermix’s revenue. NYAG staff say they’re “not ruling out” litigation against Yahoo for funding Intermix. More recently, rumors indicate a possible NYAG investigation of Direct Revenue. Given Yahoo’s past support for Intermix, I wonder how NYAG will react to seeing Yahoo funding Direct Revenue too.

If a PPC network can’t or won’t eliminate rogue syndicators, it could at least grant advertisers the ability to opt out of particular unwanted syndications. Others have offered this suggestion on various occasions (e.g. Kraft seeking to avoid syndicating its ads to white supremacy groups), as to both Yahoo Overture and Google. Affiliate networks all offer this level of granularity — letting each affiliate merchant decide what affiliates may earn fees for promoting it. But to my knowledge, no major PPC search engine offers this level of advertiser control.

Ultimately, PPC syndication offers savvy PPC networks a valuable opportunity — a chance to lead industry efforts to stop the spread of unwanted advertising software. Earlier this week, Azoogle launched its new “MPORT” network with the promise of keeping the network entirely adware-free. With a bit of effort and a renewed commitment to stopping spyware, Yahoo could bring MPORT’s no-adware benefit to Overture advertisers too.

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Debunking ShopAtHomeSelect updated October 14, 2005

Reading ShopAtHomeSelect‘s marketing materials, their advertising software might seem to present compelling benefits. SAHS promises users rebates on products they’re already purchasing. And SAHS even offers reminder software to make sure forgetful users don’t miss out on the savings. What could be better than timely reminders of free money?

But the SAHS site doesn’t tell the whole story. My testing demonstrates that SAHS software is often installed without users wanting it, requesting it, or even accepting it. (Details.) When users receive an unwanted SAHS installation, SAHS still claims commissions on users’ purchases — but typical users will never see a penny of the proceeds. (Details.) Meanwhile, whether requested by users or not, SAHS’s commission-claiming practices seem to violate stated rules of affiliate networks. (Details.)

Despite these serious problems, SAHS boasts a superstar list of clients — the biggest merchants at all the major affiliate networks, including Dell, Buy.com, Expedia, Gap, and Apple. Why? Affiliate networks have little incentive to investigate SAHS’s practices or assure compliance with stated rules. (Details.) SAHS and affiliate networks profit, but users and merchants are left as victims. (Details.)

Update (October 14): Commission Junction has removed SAHS from its network, thereby ending SAHS’s relationships with all CJ merchants. No word on similar actions by LinkShare or Performics.

Wrongful Installations – No Consent, and Tricky So-Called “Consent”

ShopAtHomeSelect is widely known to become installed without meaningful consent — or, in many cases, without any consent at all. Most egregious are installations through security exploits, without any notice or consent. I continually test these installations in my lab, and I have repeatedly observed SAHS appearing unrequested — more than half a dozen such installs, occurring on distinct sites on distinct days. I posted one such video in May, and I retain the others on file.

3D Screensaver installs SAHS, although the SAHS license does not disclose inclusion of SAHSSAHS’s improper installations extend to many of SAHS’s bundling partners. I have repeatedly seen (and often recorded) SAHS disclosed midway through lengthy license agreements; users often have to scroll through dozens of pages to learn of SAHS’s inclusion. Even worse, some programs that bundle SAHS nonetheless fail to mention SAHS’s inclusion. See e.g. 3D Flying Icons, which shows a 12-page 2,286-word license that makes no mention of SAHS, yet 3D installs SAHS anyway. (Screenshot at right.)

PacerD installs SAHS, although the PacerD EULA does not disclose inclusion of SAHS.In other instances, ActiveX popups pressure users to accept multiple advertising programs in the guise of “browser enhancements” (or similar). In February 2005, I observed an ActiveX popup that labeled itself “website access” and “click yes to continue,” but immediately installed SAHS if users pressed yes once. More recently, I posted an analysis of the PacerD ActiveX. (Screenshot at left.) PacerD’s ActiveX popup links to a license agreement which discloses installation of eight advertising programs — but doesn’t mention SAHS, though Pacer in fact does install SAHS. So even when careful users take the time to examine Pacer’s 1,951-word license, in hopes of learning what they’re getting, there’s no way to learn that SAHS will be installed, not to mention grant or deny consent.

A porn video distributed by BitTorrent (P2P) installs SAHS. Disclosure occurs only if users scroll down several pages in the video's EULA. Disclosure consists of only a single sentence, without even a link to more information.I’m not the only observer to notice SAHS installed improperly. Earlier this month, VitalSecurity.org reported SAHS installed via IM spam: Users receive an unsolicited instant message, and clicking the message’s link installs SAHS (among other programs) without any notice or consent. Last month, PC Pitstop (1, 2) and VitalSecurity.org reported SAHS bundled with porn videos distributed by BitTorrent — so a user seeking adult entertainment would unwittingly receive SAHS too. In my testing of these BitTorrent videos, SAHS was listed in a license agreement preceding the videos, but users had to scroll past four pages of other text to learn of SAHS’s inclusion, and even then SAHS’s mention was only a single sentence — without even a link to an external SAHS license agreement, and without any description of the privacy effects of installing SAHS software. (See screenshot at right.) Furthermore, these BitTorrent videos aren’t SAHS’s only tie to porn videos. In January, I analyzed ActiveX popups triggered by porn videos. These popups falsely claimed to be required to view the videos, but in fact they were mere ploys seeking to install SAHS and other advertising software.

In short, a user receiving SAHS cannot reasonably be claimed to have wanted SAHS, nor to have granted informed consent. Perhaps some SAHS users run SAHS willingly and knowingly, but many clearly do not.

In contrast, affiliate networks’ rules set a high burden for installation disclosure and consent. LinkShare’s Shopping Technologies Addendum (PDF) requires that disclosure be “full and prominent,” a standard met neither by SAHS’s nonconsensual installations, nor by its installation when bundled with porn videos. Commission Junction’s Publisher Code of Conduct requires that disclosure be “clearly presented to and accepted by” users, and CJ specifically prohibits software that is “installed invisibly” (as in the nonconsensual installations detailed above).

SAHS may claim that these wrongful installations have stopped. But that’s just not credible. I’ve continued to see (and record) these installations as recently as the past few days.

SAHS may say these wrongful installations are the fault of its distributors. (SAHS offered that argument when PC Pitstop inquired as to SAHS bundling with porn videos.) But affiliate networks’ rules do not forgive wrongful installations merely because the installations were performed by others. To the contrary, affiliate networks set out high consent requirements which apply no matter who installs the software. Furthermore, with so many diverse wrongful installations over such an extended period, it’s clear that something is fundamentally wrong with SAHS’s installation methods; SAHS can’t escape responsibility by vague finger-pointing.

Update (September 9): Staff from SAHS have prepared a document (PDF) purporting to rebut my findings of nonconsensual and dubious installations of SAHS. In each instance, SAHS claims they weren’t really installed in the manner I describe, so they say I am “mistaken” as to my allegations. Let’s look at each of the types of installations I described, and review the evidence:

Tricky popups (PacerD specifically): I previously posted an analysis of PacerD’s installation, including a screenshot of new folders created by PacerD. SAHS correctly notes that there’s no new folder containing SAHS files. But the lack of a new Program Files folder doesn’t mean SAHS wasn’t installed; quite the contrary, SAHS was installed by PacerD. Furthermore, SAHS was installed into the c:Windows directory, where inexperienced users are unlikely to look for it, and where its files tend to become jumbled with other files. To document this installation, I have added two new screenshots to my SAHS write-up, showing newly-created SAHS files placed in my c:Windows directory. I also have on file a video, showing the installation of the PacerD ActiveX followed (without interruption in the video) by the creation of these files. I also have on file a packet log indicating the newly-installed copy of SAHS contacting SAHS servers. So my initial write-up was right and SAHS’s response is wrong: PacerD did indeed install SAHS — and it did so without mentioning SAHS in any EULA or other disclosure.

Large bundles with little or no disclosure (3D Flying Icons specifically): Here again, SAHS makes the same analytical error. My write-up reports lots of new folders (within c:Program Files) reflecting other programs becoming installed. SAHS didn’t add a folder to c:Program Files, so it didn’t come up in my Program Files screenshots. But SAHS absolutely was installed by 3D. In a video I made at the time (now also posted to my public site), I observed a SAHS installer created in c:Temp (1:44), and I saw SAHS program files in c:Windows at 2:43, in each instance bearing distinctive SAHS icons as well as typical SAHS filenames. So there can be no disputing that 3D installs SAHS.

Nonconsensual installations through security holes: The section above links to a particular single security exploit video, one of literally scores I have on file. My automated network log analysis, file-change, and registry-change analysis confirm that SAHS was installed in the course of that security exploit, and Ad-Aware logs say the same, but the video does not specifically show the installation. That’s not particularly surprising — SAHS installs can be silent, and I wasn’t specifically seeking to document SAHS installs when I made that video. But rather than worry about this single example from so many months back, let me take this opportunity to post a recent example, showing a nonconsensual SAHS installation I happened to receive just last month (August 2005). In this video, I view a page at highconvert.com (video at 0:05), receive a series of security exploits (0:20-0:30), browse my file system and diagnostic tools, and then get a popup indicating that SAHS has been installed (1:57) (screenshot). My packet log and change-logs also confirm the SAHS installation.

So where does this leave my claims of improper SAHS installations? Notwithstanding SAHS’s promises of legitimacy, there can be no doubt of SAHS becoming installed without consent. SAHS may not like to admit it, and SAHS produces intense rhetoric to deny it, but users with SAHS aren’t all “opt-in.” To the contrary, some SAHS users have SAHS just because they’re unlucky enough to get it foisted upon them. And contrary to SAHS’s claim that my findings are “incorrect,” I have ample proof of these nonconsensual SAHS installs.

 

Wrongful Operation – Forced Clicks

In addition to regulating installation methods, affiliate networks’ rules limit the ways in which affiliates may claim affiliate commissions. Commission Junction’s Publisher Code of Conduct prohibits claiming commissions on “non-end-user initiated events” — invoking affiliate links without an “affirmative end-user action.” LinkShare’s Shopping Technologies Addendum (PDF) lacks a corresponding prohibition of non-end-user initiated events, but LinkShare’s Affiliate Membership Agreement repeatedly calls for affirmative user actions as a necessary condition to earning commission. For example, LinkShare’s provision 1.1 says commissions are payable only for “users who activate the hyperlink” (emphasis added); the “users … activate” wording specifically contemplates a user taking an affirmative action, not merely a software program automatically opening a link. (Since LinkShare’s special Addendum lacks any provision to the contrary, these Agreement terms still apply.)

There are good reasons for these rules: Affiliate merchants often make substantial payments if an affiliate link is activated and a user makes a purchase. (For example, Dell could easily pay $10+ for a single purchase through a single link.) So software programs aren’t allowed to “click” on affiliate links automatically. Instead, users must actually show some interest in the links — protecting merchants from being asked to pay commissions when an affiliate did nothing to earn a fee.

Although applicable network rules require that clicks on affiliate links be affirmative and that such clicks actually be performed by users (not just by software), SAHS software opens affiliate links and claims commissions without users taking any specific action. See e.g. this SAHS-Dell video, showing a user requesting www.dell.com on a computer with SAHS installed. SAHS immediately redirects the user to its affiliate link to Dell (video at 0:06), and LinkShare affiliate cookies are created (0:08), all without a user affirmatively clicking on any SAHS affiliate link. See also a corresponding SAHS video for Buy.com, showing affiliate link being loaded (0:06) and cookies created (0:10), again without any user interaction.

So SAHS’s operation constitutes an apparent violation of applicable network rules — claiming affiliate commission without the required user click on an affiliate ad, seemingly contrary to network rules.

Affiliate Networks’ Motives

I began this piece with the claim that affiliate networks have allowed SAHS to remain in their networks, notwithstanding the violations set out above. Why?

One possibility is that the affiliate networks simply never noticed the violations. But that’s a suggestion I can’t accept. Consider the many articles above, each reporting wrongful installations. Much of this work received extensive media coverage, including discussions on industry sites of record. Furthermore, most of these findings can be verified easily using any ordinary PC. So affiliate networks can’t credibly claim ignorance of what was occurring.

More persuasive, in my view, is the theory that affiliate networks declined to punish SAHS because SAHS’s actions are profitable for affiliate networks. When an affiliate merchant pays a commission to an affiliate, that merchant must also pay a fee to the intermediary affiliate network. Commission Junction’s public pricing list reports that this fee is 30% — so for every $1 of commission paid to SAHS, CJ earns another $0.30. As a result, affiliate networks have clear financial incentives to retain even rogue affiliates. (Indeed, at the same time that adware has exploded to infect tens of millions of PCs, CJ and LinkShare are reporting unusually strong earnings. [1, 2])

I don’t want to overstate my worry of affiliate networks’ profit motivation. In recent months, affiliate networks have repeatedly kicked out long-time rule-breakers, even where the rule-breakers make money for the networks. (See e.g. LinkShare kicking out 180solutions, and CJ kicking out 180solutions, Direct Revenue and eXact Advertising.) But these actions generally only occur after an extended period of user and analyst outcry. (See e.g. my writing last summer about 180solutions’ effects on affiliate systems.) In contrast, to date, little attention has been focused on SAHS.

Update (October 14): Commission Junction has removed SAHS from its network, thereby ending SAHS’s relationships with all CJ merchants. No word on similar actions by LinkShare or Performics.

Merchants and Users as Victims

As shown in the example video linked above, SAHS claims affiliate commissions even when users specifically request merchants’ sites. Dell and Buy.com get no bona fide benefit from paying 1%-2% to SAHS, as shown in the videos above. SAHS might claim that it pays users rebates as a way to encourage their purchases from participating merchants. But when SAHS arrives on users’ PCs unrequested, and even without users’ acknowledgement or acceptance of its arrival, users are unlikely to be motivated to make purchases from SAHS-participating merchants. So it’s unclear what benefit SAHS can offer merchants under these circumstances.

Notwithstanding the problems with SAHS’s business, affiliate networks encourage merchants to make payments to SAHS by listing SAHS as an affiliate in good standing, inviting SAHS staff to conferences, and occasionally even giving awards to SAHS. Whether through these network actions or based on merchants’ own failure to diligently investigate, merchants bear the brunt of SAHS’s bad actions — paying out commissions SAHS has not properly earned under stated affiliate network rules.

Users also suffer from SAHS. As a result of the ill-gotten payments paid to SAHS by merchants, SAHS receives funds with which it can and does purchase additional installations from its software distribution partners (including the nonconsensual and tricky installations shown above). Payments from Dell (and other targeted merchants) ultimately help to fund the infection of more users — slowing down more users’ PCs, making more users’ PCs unreliable, and pouring fuel onto the spyware problem. To the extent that affected users respond by buying new PCs, Dell perhaps benefits indirectly — but I gather Dell does not aspire to fund such infections.

SAHS may claim that users benefit from its presence, even if its initial installation was improper. After all, SAHS claims affiliate commissions based on users’ purchases, and SAHS stands ready to refund a share of these commissions to the responsible users. But from the perspective of users who received SAHS without meaningful disclosures, SAHS’s offer is of dubious value. Where a program arrives unrequested, users’ fears of identity theft or fraud will (rightly!) discourage them from providing the personal information necessary to receive a payment (name, address, etc.). SAHS may be offering users legitimate actual payments — but when SAHS’s installation was nonconsensual in the first place, users have no easy way to distinguish SAHS’s offer from a phishing attempt or other scam. Without payment details, SAHS will simply retain users’ funds — giving users no benefit for the unrequested intrusion on their PCs, but giving SAHS extra profits.

This is an unfortunate situation — but it’s not hopeless. Dell, Buy.com, and other affected merchants need not continue to help fund this mess. LinkShare and Commission Junction need not continue to pass money to SAHS from unwitting merchants, nor need they continue taking 30% cuts for themselves. Stay tuned.

Update (September 13): News coverage discusses the problem of SAHS retaining commissions for users who never requested SAHS and never even registered for rebates. CJ claims that they have not confirmed “SAHS performing redirects on unregistered users,” but admits that this would be a “major violation.” I have provided CJ with screenshot and video proof, showing SAHS doing exactly that.

Posted on

More on Google’s Role: Syndicated Ads Shown Through Ill-Gotten Third-Party Toolbars

I’ve previously written about two different ways that Google gets involved in distributing and funding spyware: Allowing Blogspot to be used to foist spyware through tricky ActiveX popups and paying fees to AdSense sites who in turn buy pop-ups through 180solutions (such that revenue ultimately flows from advertiser to Google to AdSense site to 180solutions).

Many of Blogspot’s ActiveX popups have disappeared since my February article, and Google promises to put a check on AdSense popups too. But Google’s role goes much further: Through syndication relationships, Google provides ads to multiple web toolbar operators, including to toolbars installed on users’ PCs without notice or consent. Google pays these toolbar companies for the ads they show — thereby supporting and funding their operations.

Google’s Rules and Policies

Google repeatedly tells its advertisers that their ads will appear only on Google’s “high-quality” partner sites.

What does “high-quality” mean? Google doesn’t say. But last year Google published a set of “Software Principles” for advertising programs — calling for improved notice and consent before advertising software becomes installed. A basic notion of “high-quality” sites is that they don’t solicit traffic through software violating Google’s Software Principles, and that they also don’t make or distribute such software. My sense is that an advertising channel cannot be considered “high-quality” if it is predicated on installing software onto users’ PCs without their consent or without their informed consent.

Ask Jeeves and Its Ill-Gotten Toolbars

I’ve previously shown that Ask Jeeves’ toolbars sometimes install without asking for permission (additional videos on file). Other Jeeves toolbars install in effective stealth or otherwise without informed consent. Some examples:

  • The AJ toolbar bundled with the iMesh P2P program is disclosed only at page 27 of iMesh’s 56 page license. Users who manage to locate this paragraph are likely to face some difficulty in understanding it; the text largely uses euphemisms in place of the word “toolbar” to describe AJ’s software. (Until recently, the license didn’t use the word “toolbar” at all.) See also analysis by SearchEngineWatch.
  • Kazaa has long bundled AJ’s MySearch toolbar (though a recent revision to Kazaa seems to have replaced it with a competing toolbar). Historically, AJ’s inclusion has been prominently disclosed in the Kazaa installer. But users wanting to learn more about AJ have had no reasonable way to find details or even to read AJ’s license: Kazaa oddly placed the AJ license agreement at page 32 of a document puzzlingly labeled “Altnet License Agreement” (without mention of AJ).
  • When Ask Jeeves promotes its toolbars in banner advertising, it again fails to obtain the kind of consent that Google seeks. AJ advertises on kids sites, using euphemisms in place of plain language, and showing pictures of smiley faces rather than pictures of its advertising toolbar. AJ’s installation does not affirmatively show a license agreement providing more detailed terms. On 800×600 screens (such as many older PCs), AJ even fails to show a properly-labeled link to a license or to mention the word “toolbar” in on-screen text prior to installation..

So even if a user has an AJ toolbar, the user may not want it, may not know how it arrived, and may not have granted meaningful consent (if any consent at all). These various behaviors seem to constitute multiple violations of Google’s Software Principles — among others, installation without any consent at all, as well as failure to provide appropriate “upfront disclosure.”

    PPC advertisers    
money viewers
Google AdWords
money viewers
Ask Jeeves

How Funds flow from advertisers to Ask Jeeves

Notwithstanding the tricky installation methods used by these Ask Jeeves toolbars, AJ’s revenues ultimately largely come from Google: Enter a search term into an AJ toolbar, and most of the resulting ads are Google AdWords ads. AJ’s recent 10-Q says AJ gets 74% of its total revenues from Google. With AJ’s 2005 Q1 revenue at $94.9 million, Google apparently pays AJ approximately $278 million per year. Fees flow from advertiser to Google to AJ, as shown at right.

Google’s relationship with Ask Jeeves is widely publicized: Google issued a press release announcing its relationship with AJ, and Google’s main AdWords page even shows AJ’s logo. But Google’s statements to advertisers fail to mention the possibility that AJ will send advertisers traffic that was obtained from toolbars installed without proper notice and consent or, in some instances, any notice or consent at all.

Of course, Google’s relationships with toolbar makers doesn’t stop with Ask Jeeves. Google ads end up shown through other distribution channels with even worse installation practices.

How Google Supports IBIS WebSearch

IBIS WebSearch results showing Google PPC adsIBIS WebSearch results showing Google PPC ads


I’ve long watched the IBIS WebSearch toolbar and its troubled installation practices. I’ve often seen IBIS installed through security holes with no notice or consent. (Multiple additional videos on file.) I’ve also posted documentation of IBIS installed in tricky bundles with minimal notice. I’ve even seen IBIS offered in repeated ActiveX popups that tell users “you must click yes to continue” if users initially refuse installation. Other IBIS ActiveX popups offer a defective license link; clicking the license yields no license. (Video proof on file.)

These practices seem to violate almost every one of Google’s Software Principles. Google says to let users decline an unwanted installation, to give users upfront disclosure of major program functions, to clearly disclose changes to browser configuration, and only to come bundled with other programs meeting these rules. But my records show IBIS failing to meet each of these requirements.

 PPC advertisers 
money viewers
   Google AdWords   
money viewers
Go2Net
money viewers
IBIS WebSearch

How Funds flow from advertisers to IBIS WebSearch

Notwithstanding these apparent violations of Google’s Software Principles, IBIS shows many Google ads, seemingly receiving payment for such displays. Run a search in IBIS, and the ads often match Google ads. See screenshot at left. See also a video showing a search conducted through the IBIS WebSearch toolbar, a click on an ad, and the immediate creation of Go2Net and Google cookies. (Note that Google ads typically fill the entire screen of an 800×600 web browser.)

Click on a WebSearch ad, and traffic flows from WebSearch to Go2Net to Google to advertiser. Payment flows in the opposite direction. See diagram at right.

Using a network monitor (“packet sniffer”), I recorded the raw traffic that occurred when I clicked on the Orbitz ad shown above. In particular, my browser retrieved the URLs listed below. See also the full packet log of the associated transmissions, showing the full parameters of all redirects.

http://www.websearch.com/xfb_redir.aspx?CP=…
http://clickit.go2net.com/search?pos=1&ppos=1&plnks=5…&query=car+rental…
http://clickit.go2net.com/search/id?pos=1&ppos=1&plnks=5…&query=car+rental
http://www.google.com/url?sa=l&q=http://www.orbitz.com/App/DisplayCarSearch…&ai=…
http://www.google.com/url?q=http://www.orbitz.com/…&ai=…
http://www.orbitz.com/App/DisplayCarSearch?semsource=goog&semkeyword=car+rental

Google’s listing of ad partners confirms that Google ads can be shown by InfoSpace, owner of Go2Net. Note that InfoSpace is a publicly-traded company (NASDAQ: INSP).

The example above shows an Orbitz ad being shown by IBIS WebSearch. In my testing, Orbitz often advertises through programs often called spyware. (Examples: Orbitz ads shown by Claria/Gator, eXact Advertising and Hotbar.) But because IBIS WebSearch syndicates and shows many Google ads for many keywords, IBIS shows ads even for advertisers who otherwise refuse to do business with spyware firms. Indeed, thanks to syndication from Google, IBIS even shows (and receives payment for showing) ads from firms that have filed suit against makers of such software. For example, I have captured proof of IBIS showing Google AdWords ads from the Hertz, LL Bean, and the New York Times, each of which has taken a stand against unwanted advertising software by suing Claria.

Enforcement Challenges

Google’s Software Principles document concludes by noting that “Responsible … advertisers can work to prevent [undesirable software] by avoiding these types of business relationships [those violating the principles set out above], even if … through intermediaries.” This is surely good advice. But Google’s far-reaching relationships with Ask Jeeves, IBIS, and others indicate that Google’s actions fall short of Google’s own recommendations to others.

Most of Google’s AdWords partners are probably highly trustworthy — unlikely to show ads except in the ways that Google intends and permits. But where Google’s partners have partners of their own (as InfoSpace/Go2Net does in WebSearch), enforcement is likely to be more difficult and accountability lacking. Google could eliminate this problem by prohibiting its partners from syndicating Google ads on to further partners of their own — though such a rule would narrow the network showing Google sites and thereby reduce Google’s revenues. Google’s existing partners may also have contractual rights to distribute Google ads to partners; AJ’s 10-Q comments that AJ “display[s] paid listings from Google on … many of the third-party sites in our network” (page 18).

My testing of Go2Net/WebSearch was made particularly difficult by the fact that the Google ads at issue apparently occur only on nights and weekends. During the business day, I have observed that WebSearch generally shows ads from other sources, not from Google. This type of change tends to undermine and confuse casual efforts at testing and enforcement.

Tough enforcement is particularly difficult due to the large amount of money at issue. Ask Jeeves’ relationship with Google has grown to hundreds of millions of dollars per year. Yet my documentation of AJ’s installation practices demonstrates that some AJ traffic to Google comes from AJ toolbars installed without consent or installed without consent that meets Google’s standards. With huge money on the line, will Google terminate its relationship with AJ, as its Principles seem to require (“avoid… these types of business relationships”)? The wrongful installations cannot immediately be undone — it’s hard (though probably not impossible) to determine exactly which AJ toolbar installations lacked consent or lacked the kind of consent Google calls for. But it seems clear that AJ’s practices don’t live up to Google’s standards. What will Google do now?

Posted on

Intermediaries’ Role in the Spyware Mess updated May 28, 2005

When unwanted programs (“spyware” and others) sneak onto users’ computers, their main goal is often to show extra ads, typically pop-ups. If a vendor’s program steals users’ credit card numbers or social security numbers, the vendor will get in real trouble. But, historically, software vendors have been able to show extra ads with impunity.

Where do these ads come from? What companies are willing to support the advertising software that users so despise? It turns out some of the world’s biggest companies are advertising in this way. In 2003, I posted a list of some of Gator’s then-biggest advertisers, work that PC Pitstop updated in 2003 (using Claria’s S1 filing). More recently, I’ve posted a list of substantially all eXact advertising advertisers. More to come.

These advertisers aren’t working in a vacuum. To the contrary, many of their ads appear through spyware only thanks to major ad intermediaries that facilitate and track those placements, and that assist in the associated payments.

Are ad intermediaries responsible when their ads are shown by software installed improperly? Marquette law professor Eric Goldman thinks not. But the New York Attorney General’s office has repeatedly suggested they might be. My take: Advertiser and intermediary liability is an interesting question of law, well beyond my aspirations for this brief piece. But where ad intermediaries purport to certify or stand behind the quality of the venues where their ads are shown, I’m not receptive to their claims that they can’t do what they’ve promised. Where ad intermediaries merely count advertisement clicks without even claiming to assure traffic quality, the case for blaming intermediaries for improper use of their tracking links may be somewhat weaker (though still cognizable).

One fact about which there is no reasonable dispute: Spyware would be far less profitable — and there would be far less of it trying to sneak onto users’ PCs — if big advertisers weren’t advertising this way and if big ad intermediaries weren’t helping to facilitate such advertisements.

An Initial Example: Atlas DMT Assisting with Expedia Ads Shown by 180solutions


An Expedia ad shown by 180solutions, via Atlas DMT tracking.An Expedia ad shown by 180solutions, via Atlas DMT tracking

The many relationships in spyware advertising can be quite complicated, all the more so because advertising and payment structures take so many forms. But let me start with a relatively straightforward example: When users visit aa.com (American Airlines) on PCs with advertising software from 180solutions, 180 may show a popup of Expedia’s web site. See inset image at right.

Expedia
(advertiser)
viewers
Atlas DMT
(intermediary)
viewers
  180solutions  

Traffic Flow

Although 180 could show the Expedia site directly, traffic more typically passes through intermediaries like, in this case, aQuantive’s Atlas DMT. In particular, 180 invokes the Atlas tracking link http://expedia.click-url.com/ go/www18epd0600005172ave/ direct/01, which then redirects users to the specified page at Expedia. So users reach Expedia through Atlas, as shown in the diagram at right.

Ads are placed through intermediaries for a variety of reasons. Sometimes intermediaries help to broker the deal — making connections between advertisers and venues where ads can be shown. Some advertisers might not want to do business with 180solutions directly — maybe they haven’t heard of 180, or have heard only bad things; but doing business with Atlas seems reasonable thanks to Atlas’s better reputation. Or perhaps Atlas adds accountability: An advertiser might not trust 180’s record-keeping, but the advertiser might feel confident that Atlas will accurately count how many times each ad was shown. Intermediaries can also provide efficient and centralized payment, reducing administrative costs. Whatever the reason, ads tend to flow through intermediaries — and so intermediaries like Atlas are well-equipped to stop such ads from appearing, if they care to do so.

Of course this Expedia/Atlas example is but one of many. See e.g. a more detailed example I posted in July 2004, showing a 180solutions ad for Hawaiian Airlines ad, also served by Atlas, substantially covering the Delta.com site.

A Case Study: Advertising Intermediaries Supporting 180solutions

Beyond the Expedia ad shown above, I’ve also been looking at all 180’s other ads, along with examining where these ads come from.

For those interested in advertisers supporting unwanted software, 180solutions is a natural place to start. 180solutions is often installed with no consent at all (videos: 1, 2), via misleading promises at kids sites, in poorly-disclosed bundles, and otherwise without appropriate notice and consent — so ads shown by 180 are presumptively unwanted. Meanwhile, my testing confirms that 180solutions tracks what web sites users visit — rightly earning the name “spyware” since 180 installations can be nonconsensual. 180 also attracts attention for its large installed base and substantial venture funding. Crucially, 180’s self-serve advertising sales system, MetricsDirect, lets anyone hire 180 to show a given ad URL when users visit URLs with a given keyword — without so much as speaking to a 180 representative. In combination, these factors make 180 among the worst offenders at showing problematic ads: Bad actors can use 180 to show advertisers’ sites to millions of users, without meaningful scrutiny by 180 and, thanks to ad intermediaries’ tracking systems, sometimes even without advertisers’ knowledge.

Earlier this month, I found that 180solutions tracks a total of 510,211 keywords within the URLs users visit. In my testing, 157,083 of these keywords are actively targeted with ads. A total of 88,388 distinct ads target these keywords. (As expected, many ads target more than one keyword. I measure “distinct ads” based on use of distinct ad URLs.)

Of these 88,388 ads, many pass through well-known intermediaries which serve to facilitate relationships between advertisers and 180; to track views, clicks, or purchases; and/or to track orcoordinate facilitate payment. The listing below gives a summary of the number of ads (of these 88,388) found to be actively loading content from the specified intermediaries. The listing reports only intermediaries associated with 500 or more different 180solutions ads.

Advertising intermediary
     # ads
Traditional banner ad networks / tracking services
Atlas DMT (aQuantive) (NASDAQ: AQNT)
2,666
Adteractive
2,231
DoubleClick (NASDAQ: DCLK)
1,352
FastClick (NASDAQ: FSTC)
513
Affiliate networks
ClickBank
1,054
Commission Junction (including BeFree) (ValueClick) (NASDAQ: VCLK)   
686
Syndicated search engine advertising
Google (NASDAQ: GOOG)
4,678

See disclosure as to Advertising.com (AOL).

Update: I’ve been asked for details about the “actively loading content from” criteria that governs inclusion in the table above. My scripts check for content loaded from an intermediary by looking for redirects, for loading an intermediary’s content in a FRAME or IFRAME, or for use of JavaScript to load arbitrary code from an intermediary. Most of the listed intermediaries primarily use the redirects and FRAME/IFRAME methods. But Google AdSense sites typically use JavaScript to load Google’s inline ads in a JavaScript-created subwindow. What all these practices have in common is that they actually show substantial content from the ad intermediary — not merely (for example) a small text link to an affiliate network.

Do Ad Intermediaries Intend to Support 180?

Multiple advertising intermediaries (and some big advertisers) have recently written to me to tell me that they “can’t” track how ads are being shown using their networks and systems. They apparently consider it impossible to track all their ads — so they think they shouldn’t be blamed if they fail, i.e. if their ads are shown through software installed improperly on users’ PCs.

I emphatically disagree. The task is definitely doable. I know because I’ve already done it.

advertisers
money viewers
ad intermediaries
(e.g. Commission Junction)
money viewers
independent intermediaries
(e.g. Top3offers)
money viewers
spyware
(e.g. 180solutions)

Flow of Traffic and Payments

Ad intermediaries are correct that the design of spyware and similar systems makes their traditional enforcement procedures ineffective. Historically, if an ad intermediary noticed that some client or site was showing its ads in a way the intermediary didn’t like, the intermediary could simply cancel the corresponding entity’s contract and withhold payments to that entity or refuse future business from that entity.

180solutions’ design (and others like it) wreaks havoc on this simple enforcement model. Many of 180’s ads are placed by 180 advertisers, acting in their own names, in general without disclosing that the resulting traffic will be shown in 180solutions pop-ups. For example, Top3offers.com pays 180solutions to show Top3offers URLs when users visit certain keywords pertaining to online dating. Top3offers then sends such traffic to Yahoo Personals via a Commission Junction tracking link, ultimately receiving payments for leads or signups. Yahoo and CJ did not request that Top3offers take any such action — and if they search their advertiser databases for 180solutions, they won’t find a match, because the underlying account is in the name of Top3offers, not 180. And of course Top3offers is just one of hundreds — thousands? — of middle-men using similar methods. (See e.g. ten specific examples I posted in detail last year — complete with packet logs, videos, etc.)

So it’s insufficient for ad intermediaries to merely search their databases for the names of known wrongdoers. Rather, rigorous enforcement requires examining actions, not just names. Savvy intermediaries need an enforcement system that monitors ads at trouble spots like 180solutions, that flags suspect ads shown there, and that does not naively assume that bad actors will be truthful in their statements to ad intermediaries. Conveniently, that’s precisely how my ad-tracking robot works — that’s precisely how I generated the table above.

This CJ/Top3offers example is just one of many, and of course facts vary across types of ad intermediaries. Because affiliate networks like Commission Junction generally pay commissions only when users make purchases, they tend to be particularly indiscriminate as to who can place such links and earn such commissions — operating under the mistaken assumption that if a user made a purchase, the traffic must have been legitimate. (They ignore the risk that the ad was improperly shown to the user, without appropriate prior consent.) Indeed, despite CJ having ended its direct relationship with 180, 180’s advertisers (the “independent intermediaries” in the diagram above) continue to run CJ links — apparently in the expectation of continuing to receive payment, i.e. because CJ won’t catch them. If CJ can’t identify and block this traffic, then CJ still earns its commissions on such traffic — so paradoxically CJ still profits from the activities of 180 and its advertisers.

How Google Gets Involved

PPC advertisers
money viewers
   Google (AdWords)   
money viewers
AdSense sites
money viewers
180solutions

Flow of Traffic and Payments via Google

Google’s relationship with 180 proceeds in the convoluted path shown at right. Pay-per-click advertisers pay Google to show their ads on Google’s AdSense partner sites. Some AdSense members then pay 180 to show the members’ sites via 180solutions popups, such that funding ultimately flows as shown at right: From pay-per-click advertiser to Google to AdSense member site to 180solutions. (Example.)

Google’s relationship with 180 merits special discussion for at least two reasons. First, where other intermediaries often withhold from making claims about the quality of the sites they track or serve, Google tells its advertisers that sites showing Google ads are “high-quality” and “reviewed and monitored according to … rigorous standards.” Furthermore, Google’s AdSense Program Policies provide that AdSense ads may not be displayed in pop-ups or via client software (like 180).

Second, notwithstanding Google’s statements about the quality of sites in its network, Google’s relationship with 180 is surprisingly large: Of the 88,388 current 180solutions ads, some 4,678 (5%+) include Google AdSense ads, making Google the most prevalent source of funding for web sites advertising with 180solutions (at least when measured by the methods set out above).

Despite the “quality” claims in Google’s statements to its advertisers, it is unclear what steps Google takes to enforce its stated rules. I sent an inquiry to Google staff two weeks ago, but I have not yet received a response.

That Google AdSense members promote their sites through pop-ups like 180’s is entirely foreseeable. Indeed, Google apparently foresaw this problem when it included AdSense policy text to specifically forbid this practice. Now that the problem is observed and now that it turns out to be substantial, will Google enforce its existing rule?

Update: In a blog entry responding to this piece, Eric Goldman concludes “nothing about traffic to AdSense sites sourced by adware vendors runs contrary to Google’s stated policies.” Perhaps I haven’t explained (what I view to be) the violation sufficiently clearly. So let me try again. First, AdSense Program Policies require that “No Google ad … may be displayed on any … pop-ups” — seemingly violated when 180 shows pop-ups of sites that include AdSense ads. Second, AdSense’s Terms and Conditions provide as follows (emphasis added):

“5. Prohibited Uses. You shall not, and shall not authorize or encourage any third party to … (vi) directly or indirectly access … Ads … through or from … any software application.

My example shows behavior that seems to exactly match the prohibited activity: An AdSense site hires 180 (surely “authoriz[ation]” and “encourage[ment]” within the meaning of the rule) to show the AdSense site, including showing (and thereby “access[ing]”) the site’s AdSense ads, as a result of the 180 software application observing the user viewing certain targeted sites. To me, the inconsistency between this practice and the stated rule seems abundantly clear.

Methodology, Enhancements, and Future Work

For those interested in my methodology: I’ve previously written about how to learn what ads 180 shows when users visit certain sites. The results above are derived from this list of ad URLs by processing with a robot that looks at the contents of each ad URL, attempting to determine and classify any ad networks or other intermediaries forwarding users to other advertising elsewhere.

Because my robots are imperfect, my methods tend to undercount the number of ads actually coming from each ad intermediary. My robots can track and analyze most standard HTML, including server-side redirects, client-side redirects, frames, iframes, and even basic JavaScript. But encoded JavaScript and certain other tricks currently serve to stop my robots from successfully and fully analyzing all ads.

In the coming weeks I’ll be posting more specific data — perhaps a listing of specific ads shown through unwanted software on users’ PCs, passing through some or all of the ad intermediaries listed above; perhaps videos and packets logs examining particular examples in detail. Interested readers should feel free to send suggestions and requests. Note that my March 2005 eXact Advertising testing reported the intermediaries associated with most of eXact’s current ads.

Where Do We Go From Here?

At a recent NAI Spyware conference, advertising executives reportedly discussed “creating robot-like technology to follow … advertisement[s].” They’re on the right track — but it’s unfortunate that they’re still just “discussing” rather than actively moving forward with the work. If I can do the analysis above — using just my ordinary cablemodem, some VB scripts running within Microsoft Access, and a single spare PC in my lab — then surely NAI’s members can do a lot better.

NAI members like aQuantive and DoubleClick are currently placing and tracking thousands of ads that are helping to fund the unwanted software plaguing users’ PCs. The time for talking has long since ended.

Disclosure: I serve as a consultant to AOL on certain matters related to spyware. If AOL’s Advertising.com ads had been sufficiently frequent to meet the criteria for inclusion in the table, I would have included them. However, in fact AOL / Advertising.com serve/track/support substantially less than 500 ads shown by 180solutions, therefore not calling for inclusion in the table. This calculation is based on 180solutions ads as they stood before I sent AOL any report as to its Advertising.com ads being shown by or through 180solutions. To the extent that AOL’s numbers are below those of other ad intermediaries, I attribute this to AOL’s March 2005 decision to stop doing business with all adware companies.

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180 Talks a Big Talk, but Doesn’t Deliver updated February 4, 2005

The anti-spyware community has been abuzz all weekend with the news of spyware company 180solutions joining the Consortium of Anti-Spyware Technology (COAST). From the 180solutions press release:

“180solutions, a provider of search marketing solutions, today announced it has become a developer member of … COAST. … By working with COAST and complying with its strict Code of Ethics, standards and guidelines, 180solutions aligns itself with the organization’s governing companies, … PestPatrol, … Webroot. … “180solutions has passed a lengthy and rigorous review process demonstrating their commitment to develop and distribute spyware-free applications,” said Trey Barnes, executive director of COAST.”

Some specific worries:

Substantive conflict of commitment

COAST members PestPatrol and Webroot currently detect and remove 180 software. So these companies are (rightly!) telling their users that 180solutions software should be removed from users’ computers.

At the same time, according to 180’s press release, 180solutions is “releasing versions of its applications that have been reviewed and evaluated by COAST.” This press release, COAST’s “review” of 180 software, and COAST’s acceptance of 180 into its consortium can only be taken to constitute a COAST endorsement of 180. That’s a clear conflict with COAST members simultaneously recommending that users remove 180 software.

Then there’s the conflict of interest that inevitably arises whenever an anti-spyware company declares an alleged spyware provider to be legitimate. Users buying a vendor’s anti-spyware software think they’re buying that vendor’s best efforts to identify and remove software users don’t want. When the vendor instead accepts funds from a software provider, one making the kind of software that the vendor is supposed to be removing, users can’t help but wonder whose interests the vendor has in mind. To my mind, the better strategy is for anti-spyware vendors to refuse partnerships with any company making software that might colorably be claimed to be spyware. (See Xblock’s statement of policy.)

I don’t want to overstate the problem. So far, PestPatrol and Webroot still detect and remove 180 software. 180 isn’t listed on COAST’s Members page. And COAST members don’t directly receive the money 180 pays COAST.

But the latent problems remains: For a fee, COAST is certifying controversial providers of allegedly-unwanted software, dramatically complicating the role and duties of COAST and its members. COAST staff are providing favorable quotes in 180 press releases. Who can users trust?

180solutions installation practices are outrageous and unethical

180’s endorsement by COAST is particularly puzzling and particularly worrisome due to 180’s many bad business practices. Indeed, in my testing, 180’s installation practices remain among the worst in the industry. The details:

I have personally observed (and preserved in video recordings) more than two dozen instances of 180 software installed through security holes. (Example video.) Just yesterday, I browsed the Innovations of Wrestling site (iowrestling.com, proceed at your own risk), where viewing the site’s privacy policy invoked a security exploit installing more than a dozen unwanted programs, 180solutions software included. (Note that iowrestling’s installations are at least partially random, so it’s hard to replicate this result. But I kept a video and packet log of my findings.)

Even when 180 installers do request consent to install, the disclosure is often quite misleading. For example, I previously documented Kiwi Alpha installing 180, first mentioning 180 at page 16 of a 54-page license agreement. With 180’s installation warning buried in such a long text, ordinary users are unlikely to learn that Kiwi gives them 180. Certainly users don’t grant knowing consent to the installation.

180’s web site claims “no hiding,” but 180 uses a variety of tricks to make its software harder to find and remove. 180 sometimes uses randomized filenames which make its files unusually difficult to locate. 180 also installs itself into multiple directories — sometimes c:Program Files180solutions (or similar), but sometimes into the root of c:Program Files and sometimes directly into a user’s Windows directory. If uses do manage to find and delete some 180 files, another 180 program often pops up to request reinstallation. If these tricks don’t constitute hiding, I don’t know what does.

180’s controversial installation practices are not mere anomalies. I’ve observed these, and others like them, for months on end. Even 180solutions’ director of marketing sees the problem. See Seattle Post-Intelligencer article, reporting his admission that “n-Case could get bundled with other free software programs without the company’s knowledge [which] could lead to the n-Case software fastening to individual’s computers without their knowledge.”

How did 180 get into this mess? It seems 180 hasn’t been careful in choosing who they partner with. In fact, they recruit distributors (as well as advertisers) by unsolicited commercial email. See 20+ examples.

Interestingly, in its recent press release, 180 does not claim to have stopped these controversial practices. If 180 did make such a claim, I’d be able to disprove it easily — there are so many sources of 180 software installed without notice and consent. Instead, 180 claims only that they are working on a “transition” to improved business practices.

But this isn’t the first time 180 has promised to clean up its act. In March 2004, 180’s CEO claimed 180’s “Zango” product — then the new replacement for the older n-CASE — would give users more information before installation. In an April interview, he attributed to the old n-CASE product “certain users … who are not sure where or how they got our software,” but said “the Zango product … is a means to improve that.” On at least these two occasions, 180 has pledged to improve its practices. Nearly a year later, 180 software often still gets installed without notice or consent. So we’re still waiting for the promised improvements. Meanwhile, 180 continues to benefit profit from its millions of ill-gotten installations.

180solutions advertising practices are outrageous and unethical

Beyond controversial installation methods, 180 also deserves criticism for its intrusive and allegedly-anticompetitive advertising practices.

180 covering Delta.com with Hawaiian Airlines web site180 covering Delta.com with Hawaiian Airlines web site

When 180 covers a web site with one of its competitors, 180 doesn’t just show a small popup ad (like, say, Claria — not that Claria’s practices deserve praise). Instead, 180 opens a new web browser showing the competitor’s site, generally covering substantially all of the targeted web site. A user who wants to stick with the site he had previously requested must affirmatively close the new window — taking an extra step due to 180’s intervention. What would we think of a telephone company that connects a user to Gateway when the user dials 1-800-Dell-4-Me, unless the user then presses some extra key to return to what he had requested initially? The real-world analogy makes it almost too easy to assess 180’s legitimacy: No telephone company could get away with such a scam, yet 180’s advertising practices have gone largely unchallenged.

Even more problematic are 180 ads targeted at competitors’ check-out pages. Sometimes 180 lets a user browse a merchant’s web site uninterrupted, but when the user reaches the page requesting order confirmation, 180 then covers the merchant’s site with a competitor — interrupting the user’s purchase. Again, the real-world analogy is straightforward. Suppose one retailer sent its sales employees into a competitor’s store, to invite users to take their business elsewhere as they waited in line to reach the checkout counter. The intruding employees would be arrested as trespassers.

Then there are the thousands of 180 ads that include affiliate codes. Some of 180’s ads cover a web site with a competitor reached through an affiliate link. Via these ads, companies find themselves promoted by 180, and find themselves directly or indirectly paying commissions to 180 — all despite never requesting that 180 advertise or promote them.

Even worse are the 180 ads that target a merchant with its own affiliate links. Here, merchants end up paying affiliate commissions where they’re not otherwise due. For example, when users reach merchants’ sites by clicking through non-affiliate links or by typing merchants’ domain names, 180 nonetheless intercedes by opening affiliate links to merchants’ sites. Whether shown in double windows, hidden windows, or on-screen decoys, 180’s affiliate links make merchants’ commission-tracking systems think resulting purchases resulted from 180’s promotional efforts. Unless merchants figure out that they’re being cheated — being asked to pay commissions not fairly earned — 180 and its advertisers receive commission payments for users’ purchases. (Details; example.)

There’s plenty more to criticize about 180. To this day, installations on zango.com let users install 180 software without so much as seeing 180’s license agreement. Even 180’s current uninstall procedures give far more information than 180 provides prior to installation. And Andrew Clover reported 180 code that deletes competitors’ programs from users’ disks.

COAST’s credibility on the line

180’s claims of planned improvement are essentially unverifiable. Since 180 admits to a mix of permissible and impermissible installations, its claims of improvement cannot be falsified by critiquing current behavior. Instead, whenever I or others show 180 software installed without proper notice and consent, 180 can say this is just a remnant of prior practices not yet cleaned up in “transition.” By the plain text of 180’s press release, we’ll have to wait at least 90 days to prove that 180 isn’t living up to its promises to COAST and to users.

Why would COAST sign onto this bargain? MediaPost reports 180 paying COST a membership fee as large as $10,000 per year, so that gives one clear explanation. Also, notwithstanding participation by PestPatrol and Webroot, COAST’s past is hardly uncontroversial. In 2003, Lavasoft (makers of Ad-Aware) decided to leave COAST, complaining that COAST’s focus on “revenue generation … reflect[s] badly on the entire anti-trackware industry.” Similarly, Spybot refused to join COAST due to participation by companies that were, in Spybot’s view, unethical.

COAST’s credibility is on the line. I don’t see endorsement of software providers as an appropriate part of COAST’s mission. But even if such work were appropriate, 180 deserves no such praise — its history of outrageous practices and its continued use of such practices mean it should be criticized, not granted an award or endorsement.

Update (February 4): Reporting “concern” at COAST’s certification program, Webroot resigned from COAST.

Update (February 7): Computer Associates (makers of PestPatrol) also resigned from COAST. However, a CA spokesperson defended COAST’s endorsement procedure, calling such endorsements “valuable.”

Disclosure: I serve as a consultant to certain merchants concerned about fraudulent activities by 180solutions and its advertisers. I have advised certain attorneys and merchants concerned about 180solutions activities and practices.

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Cookie-Stuffing Targeting Major Affiliate Merchants

Certain affiliate web sites use pop-ups, pop-unders, IFRAMEs, JavaScript, and other methods to claim affiliate commissions on users purchases from affiliate merchants, even if users do not click on affiliates’ links to the merchants. This page documents selected affiliates using these practices and selected merchants suffering from these practices.

Overview & Summary

Affiliate tracking systems are intended to pay commissions to independent web sites (“affiliates”) when users click through these sites’ links to affiliate merchants. Merchants are not intended to pay commission when users merely visit affiliates’ sites. Instead, commission ordinarily only becomes payable in the event that a user 1) visits an affiliate’s site, 2) clicks through an affiliate link to a merchant, and 3) makes a purchase from that merchant.

However, some affiliates use “cookie-stuffing” methods to cause affiliate merchants’ tracking systems to conclude that a user has clicked through a tracking link (and to pay commissions accordingly) even if the user has not actually clicked through any such link. If the user subsequently makes a purchase from that merchant — immediately, or within the “return days” period specified by the merchant’s affiliate program — the affiliate then receives a commission on the user’s purchase.

This page presents the incentives that have allowed cookie-stuffing to continue, and captures selected examples of cookie-stuffing. See also the Affiliate Fraud Information Lookup, reporting of the number of observations Wesley Brandi and I have gathered in ongoing high-volume tests for cookie-stuffing.

Groups Affected by Cookie-Stuffing

Affiliate Networks Benefit from Cookie-Stuffing

Affiliate merchants ordinarily pay their affiliate networks a percentage of all affiliate revenues passing through the network. For example, Commission Junction’s public pricing list reports that CJ charges a merchant 30% of all amounts to be paid to affiliates. (In other words, if a merchant sells $1,000,000 of merchandise and pays a 5% affiliate commission, then it must pay $50,000 of commission to its affiliates. It must further pay 30% of $50,000, or $15,000, to Commission Junction.) As a result, in the first instance, affiliate networks benefit from cookie-stuffing. Such cookie-stuffing increases the total volume of sales flowing through affiliate networks, and increases the affiliate commissions on which, for example, CJ can charge a 30% fee.

Set against this short-run incentive is the long-term problem that if affiliate networks fall greatly in value to merchants, or if affiliate networks are perceived to facilitate fraud, then merchants may no longer be willing to pay affiliate commissions and affiliate network fees. But in the short run, affiliate networks benefit from more money flowing through their networks.

To date, affiliate networks have failed to aggressively pursue, stop, and punish those affiliates using cookie-stuffing. Indeed, LinkShare has repeatedly granted a $15,000 award to affiliates later found to be using cookie-stuffing. In each instance LinkShare subsequently withdrew the award after pressure from affiliates, merchants, and others. (See MediaPost coverage.) LinkShare’s repeated awards to affiliates using cookie-stuffing reveal that this technique extends to large affiliates and to well-regarded affiliates.

That said, affiliate networks’ black-letter rules generally officially prohibit cookie-stufing. For example, Commission Junction’s Publisher Service Agreement states that an affiliate publisher “may earn financial compensation … for transactions … made from such publisher’s web site … through a click made by a visitor … through an Internet connection (link) to a web site.” In all the examples set out below, no such click occurred, and therefore no commission is fairly earned given the limitations set out in the PSA.

Affiliate Merchants Suffer from Cookie-Stuffing

Affiliate merchants suffer financially from cookie-stuffing. Cookie-stuffing causes merchants to pay commissions that, according to program rules, they need not pay. Cookie-stuffing also causes merchants to pay commissions to the wrong affiliates — to affiliates who never caused an actual user click-through — which is likely to reduce the quality and effort of affiliates participating in the merchant’s program.

Cookie-Stuffers Profit from Cookie-Stuffing

Cookie-stuffing apparently proves profitable for those who do it. Suppose an affiliate ordinarily has a 10% click-through rate from its site to its merchants. The affiliate ordinarily receives affiliate commission only if a purchase is made by one of the 10% of users who clicks through the affiliate’s link. In contrast, by cookie-stuffing, the affiliate can claim commissions from any purchases made by the entire 100% of the affiliate’s visitors.

Rule-Following Affiliates Suffer from Cookie-Stuffing

Rule-following affiliates suffer from cookie-stuffing. For one, rule-following affiliates’ cookies may be overwritten by cookie-stuffers. Suppose a user clicks to affiliate site A, a rule-follower not using cookie-stuffing, and clicks through A’s link to a given merchant. The next day, the user visits affiliate site B, a rule-breaker using cookie-stuffing as to the same merchant site. Using cookie-stuffing, site B sets an affiliate tracking cookie that overwrites A’s cookie. If the user subsequently makes a purchase from the merchant, the affiliate commission will be paid to B, not A.

Rule-following affiliates also suffer from cookie-stuffing because cookie-stuffing encourages merchants to cut their commission rates. Without cookie-stuffing, merchants would be paying commissions on fewer orders. At least some merchants would likely then choose to increase commission paid on each order.

Specific Examples of Cookie-Stuffing

This section links to my research and testing, showing cookie-stuffing targeting major affiliate merchants. In initial reporting, I have focused on cookie-stuffing targeting merchants CJ designates as “featured” and on merchants who participate in discussion fora on ABestWeb.

The table below gives “clear-cut” examples of cookie-stuffing — affiliate HTML code that clearly shows intention to set affiliate cookies without a user clicking through any affiliate link.

MerchantCookie-Stuffing AffiliateDateNotes
Amazon (an independent merchant)Avxf (qufrho-20)10/6/08Broken IMG loaded within forum page. Details and video.
Amazon (an independent merchant)consumernow.com (jumpondealscom)11/6/04Obfuscation via a redirect. Details and video.
Amazon (an independent merchant)Bannertracker-script2/27/12JavaScript invisibly inserted into multiple independent sites via web server hacking. 200+ affiliate IDs in use. Details.
Amazon (an independent merchant) Imgwithsmiles 5/2/12Flash-based stuffing syndicated through Google AdSense display ad network. 49+ affiliate IDs in use. Details.
Argos (a CJ Advertiser)Eshop600 (3910892) 1/30/12Encoded JavaScript and invisible IMG. 26 cookies stuffed at once. Details.
Barnes & Noble (a CJ Featured BFAST Advertiser)dailyedeals.com (BFAST 26682568)11/4/04Misleading JavaScript comments. Details and video.
Buy.com (a CJ Advertiser)Couponcodesmall (2705091) 10/5/08Invisible IFRAME. Details and video.
Cooking.com (a LS Selected Merchant)dailyedeals.com (FZOkC4w7rNM)11/6/04Misleading JavaScript comments. Details and video.
Crucial.com (a CJ Featured Vantage Advertiser)dailyedeals.com (340672)11/2/04Details and video.
Dell (a LS Selected Merchant)jumpondeals.com (HAHu6s1Hzp4)11/5/04Obfuscation via a redirect. Details and video.
Dentalplans (an ABestWeb CJ merchant)consumernow.com (517038)11/6/04Obfuscation via a redirect. Details and video.
Drugstore.com (a LS Selected Merchant)dailyedeals.com (FZOkC4w7rNM)11/6/04Misleading JavaScript comments. Details and video.
Eastwood (an ABestWeb CJ merchant)aboutdiscounts.com (1311826)11/4/04SCRIPT after /HTML. Details and video.
eVitamins (an ABestWeb CJ merchant)couponvine.com (465743)11/4/04 Two-step JavaScript. Details and video.
Folica (a CJ merchant)ahugedeal.us (568228)11/8/04 Details and video.
Folica (a CJ merchant)ahugedeal.com (568228)10/25/05 Still occurring with same affiliate ID, 11+ months after prior reporting. Obfuscation via a redirect. Details and video.
FunToCollect (an ABestWeb CJ merchant)specialoffers.com (306244)11/6/04Obfuscation via a redirect. Details and video.
Globat (a CJ merchant)coupon-monkey.com (1446676)11/8/04/CLICK loaded in IMG tag. Details and video. Note: Coupon-monkey claims cookie-stuffing was accidental. Details.
HostGator (an independent merchant)Avxf (dsplcmnt01)10/6/08Broken IMG loaded within forum page. Details and video.
HSN (a CJ Featured BFAST Advertiser)coupons-coupon-codes.com (BFAST 38772000)11/4/04Obfuscation via external JavaScript and redirect. Details and video.
iPowerWeb (a CJ BFAST merchant)bids2buy.com (1525933)11/6/04Details and video.
Irv’s Luggage (an ABestWeb CJ merchant)edealinfo.com (600263)11/4/04IFRAME. Details and video.
JCWhitney (an ABestWeb CJ merchant)consumernow.com (517038)11/6/04Obfuscation via a redirect. Details and video.
LaptopsforLess (an ABestWeb CJ merchant)find-coupon.com (1525933)11/4/04Popup. Details and video.
Match.com (a CJ Featured Vantage Advertiser)asmartcoupon.com (1515738)11/4/04/CLICK loaded in IMG tags. Details and video.
MLB.COM (a CJ Featured Vantage Advertiser)edealinfo.com (600263)11/4/04IFRAME. Details and video.
Napster (a CJ front-page Featured Advertiser) coupons-online-coupon.com (1167113)11/4/04Popup. Details and video.
Netzero (a CJ Featured Vantage Advertiser)consumernow.com (517038)11/4/04Obfuscation via a redirect. Details and video.
Orbitz (a LS Selected merchant)thewinnersclub.net (HAHu6s1Hzp4)11/8/04Obfuscation via a redirect. Details and video.
Oreck (an ABestWeb CJ merchant)1couponstop.com (517038)11/4/04Obfuscation via a redirect. Details and video.
Overstock.com (an ABestWeb LS merchant)dailyedeals.com (FZOkC4w7rNM)11/5/04Misleading JavaScript comments. Details and video.
PetcareCentral (an ABestWeb CJ merchant)aboutdiscounts.com (276460)11/4/04SCRIPT after /HTML. Details and video.
Priceline (a CJ BFAST merchant)findsavings.com (40001021)11/7/04Details and video.
RapidSatellite (an ABestWeb CJ merchant)smartqpon.com (979227)11/4/04Details and video. Details and video.
Relaxtheback.com (a LS Selected Merchant)office-coupons-online.com (g/KOq4zlIIk)11/6/04 Details and video.
Shoes.com (an ABestWeb CJ merchant)ultimatecoupons.com / webbuyingguide.com (1417434)11/4/04Cookie tracking of popunder triggering. Details and video.
ShopNBC (a CJ Featured BFAST Advertiser)ultimatecoupons.com / webbuyingguide.com (BFAST 38954339)11/4/04IFRAME. Details and video.
SkinStore.com (a CJ BFAST merchant)discount-coupons-online.com (568228)11/6/04Details and video.
Spafinder.com (a LS Merchant)ultimatecoupons.com / webbuyingguide.com (OEu024dtHXs)11/6/04JavaScript URL variable. Details and video.
Toshiba (a CJ front-page Featured Advertiser)consumernow.com (517038)11/4/04Obfuscation via a redirect. Details and video.
TigerDirect.com (an ABestWeb CJ BFAST merchant)findsavings.com (39104038)11/5/04Details and video.
Travelocity (a CJ BFAST Selected merchant)xpcoupons.com (40031581)11/8/04IFRAME. Placed after /BODY. Details and video.

The table below gives additional examples of cookie-stuffing. In these examples, I see insufficient basis to determine whether the affiliate intended to set affiliate cookies without a user clicking through any affiliate link. Nonetheless, that is the net effect of the examples linked below.

MerchantCookie-Stuffing AffiliateDateNotes
DentalPlans (an ABestWeb CJ merchant)savings-center.com11/4/04FRAME. Details and video.
FunToCollect (an ABestWeb CJ merchant)goodbazaar.com11/4/04FRAME with META tags. Details and video.
JCWhitney (an ABestWeb CJ merchant)a2zrewards.com11/4/04FRAME with META tags. Details and video.
Travelocity (a CJ BFAST merchant)couponmountain.com11/8/04Redirect with META tags, broken BACK button. Details and video.

Because LinkShare’s compliance and quality problems are already well-known (e.g. as described above, as to LinkShare’s repeated Titanium Award missteps), the listing above focuses primarily on Commission Junction merchants.

Last Updated: May 8, 2012

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Pick-Pocket Pop-Ups

I’ve been writing for months — years! — about unwanted programs, installed on users’ PCs, that show users extra pop-up ads. There’s been lots to write about: The actual ads shown (WhenU’s and Gator’s), whether users grant meaningful consent (especially in the face of lengthy licenses), privacy (and possible privacy violations), and online marketing methods (like search engine spamming) sometimes used by companies in this space.

Today I present research about another problem, quite distinct from pop-ups: Programs that tamper with affiliate commissions. Call them stealware, thiefware, or even “pick-pocket pop-ups” (a term recently coined by Kenn Cukier), but their core method is surprisingly simple: Stealware companies join the affiliate networks that merchants operate — networks intended to pay commissions to independent web sites that recommend the merchants to their visitors. Then when users browse to targeted merchants’ sites, the stealware programs jump into action, causing merchants’ tracking systems to think users reached the merchants thanks to the stealware programs’ efforts.

Stealware raises several major policy concerns. For one, merchants risk throwing away money — paying commissions when none are due, increasing their costs, and ultimately raising prices for everyone. For another, legitimate affiliates lose commissions when stealware programs overwrite their tracking codes with stealware programs’ own codes. Finally, stealware puts affiliate networks (like LinkShare and Commission Junction) in a truly odd position: If the networks enforce their rules and remove stealware programs from their networks, then the networks shrink and receive smaller payments from merchants.

I’ve begun my research in this field with a particular program that I believe to be the largest and most prevalent of those that specifically seek to add and replace affiliate commissions: Like Gator and WhenU, Zango (from 180solutions / MetricsDirect) monitors users’ activities and sometimes shows popup ads (though 180’s ads are particularly large, often covering the entire browser window). But the real news is that Zango frequently sets and replaces affiliate tracking codes — as to some 300+ major merchants, using at least 49 different affiliate accounts and scores of redirect servers.

Much of Zango’s affiliate code replacement lacks any on-screen display. As a result, ordinary users (not to mention merchants’ testing staff) are unlikely to notice what’s going on. Where possible, I’ve captured Zango’s behavior with screenshots and videos. As to the rest, I’ve used my trusty network monitor to inspect the raw transmissions passing over my Ethernet wire.

Details:

The Effect of 180solutions on Affiliate Commissions and Merchants