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Ben Edelman Accuses Google of Artificially Inflating Network Conversion Rates

Noted spyware researcher Ben Edelman has published an article accusing Google and certain ad partners (WhenU and large list of typosquatters) of conversion-inflation syndication fraud. The article sites Adwords examples with both video and screen captures of various activity including ones initiated through Google Chrome. Very troubling.

Microsoft Set to Spend $80 Million on Consumer Focused Search Education Campaign

Having seen some success from its “I’m a PC” campaigns targeting Apple, Microsoft is set to employ the same tactic in search. According to Ad Age, Microsoft has budgeted at least $80 million in a traditional media campaign hoping to get users to rethink search. The ads will try to plant the idea that today’s search is broken and doesn’t meet consumers needs. Microsoft’s solution? Apparently a new search engine purportedly named Bing.

Minnesota Fails to Pass Anti-Affiliate Tax Bill

Anti-affiliate tax bill SF 282 has failed to pass in Minnesota. We figured the bill supporters were no match for Flamingo World’s Connie Berg.

Google Puts Screws on Renewing MySpace Search Deal

According to TechCrunch, Google is interested in renewing its search marketing contract with MySpace in 2010 it wants to pay 225 million less per year than what it is paying now. Currently Google is in the last year of a 300 million a year deal which they want to whittle down to $75 million. Google is putting the pricing pressure on due to shrinking MySpace audience and poor CTRs.

Facebook Delivers on OpenID Promise

Facebook became the largest relying party for OpenID as it went live with the standard this week. Users with Facebook accounts can now switch from any issuing party (Google, Microsoft) account into Facebook without logging in separately. Hopefully this will increase adoption and consumer awareness of OpenID.

YouTube Channel Partners Get Access to Google Analytics

It may seem like a no brainer that corporate level advertisers would like to see the data behind their efforts, but only this week YouTube gave its channel partners access to Google Analytics.

IAB Sets Best Practice Guidelines for Social Media Ads

Adoption is the key to any industry group’s success. The Interactive Advertising Bureau has been very successful in getting the standards they have set in regards to online ad types and sizes adopted by advertisers. This week the IAB has released (full document embedded below) best practice guidelines for social media ads. The guidelines were announced at the IAB’s Marketplace: Social Media conference in New York.

Social Media Ad Standards –

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Cashing Out: Week of May 17th-23rd 2009 in Online Marketing News

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There are not many things that can bring affiliates to band together. Cheating them out of their commissions is one sure way to do it.

As technology grows the various affiliate networks, rather than adapting the way their compliance departments look at affiliate tactics, have chosen to ignore the practices of affiliates whose tactics while technically legal break the very agreements set forth by the networks themselves. The networks do so for a variety of reasons: a) often the advertiser/merchant is unaware of the situation; b) it is difficult to keep up with new technology; c) the networks still get paid for such transactions; and d) not enough sustained pressure is put on the networks to change.

While the networks benefit this is not a victimless situation. Affiliates who play fair are cheated out of their commission. Advertisers end up in some cases paying double for transactions and more importantly loosing the source that brought them the customer.

This problem has been around a long time. Folks like Ben Edelman, Kellie Stevens, Center for Democracy and Technology, and ABestWeb (see current discussion with multiple videos on a toolbar by One Cause) have made various attempts to make networks enforce their own rules. After all, how else are they going to earn the role of “trusted 3rd party”?

Personally I feel education is the only way to put pressure on the networks. Education of affiliates as well as merchants. Which is why I am glad to see Scott Jangro, former Director of Product Management for BeFree and Commission Junction and one of the smartest folks in online marketing, compile an informative series of videos that display these tactics in layman’s terms. If you are an affiliate or a merchant get informed on how this technology impacts your business.

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As an editor there times when you find yourself torn between personal/public sentiment and the journalistic ideal of providing a neutral forum. Last month with the dust-up over having Hydra as an advertiser when our authors are calling for an association to promote ethical standards, Hydra’s subsequent response, and the discussion of when it is appropriate to drop an advertiser, has lead me affect a change in Revenews advertising policy.

Effective immediately: Any potential direct advertiser who in the 12 months prior to requesting an ad does not maintain a clean record will be denied placement. Clean record shall constitute not having the advertiser’s business tactics identified as being unethical or harmful by Ben Edelman, Kellie Stevens, Center for Democracy and Technology, Sun Microsystems, the Webwatch Project, not having been fined by the FTC, or currently in a lawsuit with a state attorney general.

Ultimately Revenews does not seek to become a watchdog group and the final decision on whether or not to accept an advertiser will still be the burden of the editor. However I have seen good people like the folks at ABestWeb, the PMA, Avantlink, ShareASale take steps to improving the makeup of our industry. I applaud their efforts as well as the efforts of those listed above who spend time and energy being vigilant. I think it is time Revenews makes a stand as well.

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Hard to Make a Stand

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Boutin Inserts Foot In Unfortunately Not Wired Mouth

The art of the shock jock is alive and well on the internet as Wired Magazine writer Paul Boutin demonstrated this week. His now infamous piece of linkbait entitled Kill Your Blog is such tripe that we are not going to link to it. However, we will link to two excellent rebuttals we found by Paul Stamatiou and Jack Humphrey.

Layoffs Continue

Online companies continued to make cutbacks that impacted their employees. Companies announcing layoffs included:

Dell – Was the biggest announcement this week with 8,900 people loosing their jobs amounting to 10% of their staff
Yahoo – Cut 1,500 people approximately 10% of their staff
TicketMaster – Laid off 300 about 5% of their staff
WildTangent – Eliminated 20% of its staff
Mercent – Trimmed 12% of its staff

ScanSafe Warns of Big, Bader Malware Threats and MessageLabs Warns of Zombie Computer Phishing Attacks

ScanSafe released a report finding that employer are increasingly risk of having employees inadvertently download backdoors and password stealers onto corporate computers from Web sites that have malicious software hidden on them. A company in ScanSafe’s focus group faced a nearly 500 percent greater risk of exposure to those threats in September than was faced in January of this year, according to ScanSafe’s Global Threat Report (pdf) released on Tuesday.

Companies in the energy sector are at greater risk from Web-based malware than other industries, the report concludes. The energy sector, worldwide, faces a 189 percent higher risk of exposure from workers visiting sites with malware on them than other industries, followed by the pharmaceutical and chemicals industry, construction and engineering, and media and publishing. The industry with the lowest rate of exposure was aviation and automotive.

Also on Tuesday, security firm MessageLabs released statistics on the numbers of phishing attacks related to the banking crisis.

MessageLabs intercepted 7,000 phishing attacks exploiting Bank of America on October 16 and 15,000 on October 17, reaching 125,000 total e-mails over that weekend. American Express was the focus of a phishing attack that started on October 20 and reached 35,000 e-mails for the day. The Cutwail botnet, which controls more than 1 million active unsuspecting zombie computers on the Internet and is believed to be the largest botnet, is responsible for those phishing attempts, MessageLabs said.

CPA Empire Rebrands as Affiliate.com

Taking steps toward an upcoming rebranding launch in November CPA Empire, posted a preview of what is in store in November when they officially become Affiliate.com. Their new look promises to focus a lot on compliance which has been a problem in the past when they were Opt In Real Big and as shown in a recent report by Ben Edelman.

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Cashing Out: Week of October 19-25th, 2008 in Online Marketing News

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Since this type of discussion is important and it is rare for an ad network to come forth while under fire, below is the response from Mason Wiley, the SVP of Marketing for Hydra, as originally posted in the comments section Brad Waller’s article Reason #4837 Why This Industry Needs an Association and in response ultimately to Ben Edelman’s research here:

Hello, SVP of Marketing for Hydra here to throw in my 2 cents… or fuel for the fire. First off, we aren’t going to pull our ad just because the discussion puts us under a harsh spotlight. We really truly have nothing to hide. The fact that people use adware is not news. It is not illegal. Some advertisers even request it. And for the record it represents just a small fraction of our overall business.

Does allowing adware by some affiliates hurt all others? In theory, It could. Is it truly a widespread problem in reality? Frankly, we hadn’t thought of it before – as I said, it’s not a big part of our business. But now that our attention has been called to it, we’re looking into it.

If you recall, Hydra was the first to eliminate cash incentivizers due to shadiness. We have made heavy investments to provide rigorous compliance – in fact we are widely regarded as exceptionally aggressive in that area. We also spend legal and research dollars to vet claims by advertisers. And more.

I don’t bring these points up thinking they can counteract the this whole adware brouhaha. The point is this: Hydra does not wish to engage in shady black or grey hat practices – NOR do we feel it is in our economic interest to do so. Do you think we want to jeopardize the inroads we have made with major brand name advertisers in order to score a quick buck? (the answer is no) We have had great success playing by the rules… and we want to be even more successful.

So we welcome any efforts to set professional standards, monitor and police, and generally clean up the affiliate marketing space. The better advertisers understand how reputable affiliates and networks work, the safer they will feel, and the more ad dollars they’ll pump in. That would be good for affiliates. That would also be good for us. Our interests are totally aligned on that one!

Anyway it’s end of day Friday so I will stop for now. But i do look forward to continuing the discussion.

If you have your two cents about Hydra specifically, CPA networks in general, or the proliferation of adware, the comment section below is a good place to express those opinions.

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Hydra Responds

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