Newsweek is sort of a metaphor for the mainstream media in America. Newsweek had been owned by the Washington Post Company, it was put on the block in 2010 and went for the price of $1. That is not a typo. ONE. DOLLAR.
Eventually it ended up with IBT Media, the parent company of International Business Times. Their grand plan to create a major SEO driven online behemoth cratered. In 2016, payroll checks started to bounce. That usually unnerves employees. In December, Newsweek was slapped with a $1.2 million IRS lien. A week ago, the Manhattan District Attorney’s office raided Newsweek’s main offices. This is how Newsweek handled the scoop of the raid of its own offices:
Investigators for the Manhattan district attorney raided Newsweek’s offices on Thursday, removing 18 computer servers as part of a long-running probe into the company’s finances, according to witnesses.
The investigators, armed with a search warrant, took photographs and gathered information about the servers and their capacity, according to sources close to the matter. Throughout the day, investigators were seen closely examining the equipment inside the server room.
At about 4 p.m., investigators removed servers and loaded them onto a cart and into the freight elevator of the company’s lower Manhattan offices. The servers they took were not being used, and Newsweek’s working servers remain operational in the company’s building.
Now the scope of the problem is becoming clear.
The publisher of Newsweek and the International Business Times has been engaging in fraudulent online traffic practices that helped it secure a major ad buy from a US government agency, according to a new report released today by independent ad fraud researchers.
IBTimes.com, the publisher’s US business site, last year won a significant portion of a large video and display advertising campaign for the Consumer Financial Protection Bureau, a federal agency. Social Puncher, a consulting firm that investigates online ad fraud, alleges in its report that the ads were displayed to an audience on IBTimes.com that includes a significant amount of “cheap junk traffic with a share of bots.”
The CFPB’s ad budget was the subject of criticism from Republican lawmakers after the Daily Caller reported last year that it had awarded more than $40 million in contracts to a single ad agency, GMMB, which is one of the top Democratic media strategists. (A portion of money in those contracts was used to pay media outlets for advertising space, and was not kept by GMMB.)
Read that last paragraph again and get ready to savor what come next.
At the core of Social Puncher’s report is the finding that the audience on IBT that saw CFPB’s ads was disproportionally made up of cheap traffic purchased from ad networks. The traffic is generated via pop-up or pop-under browser windows on file sharing and pirated video streaming websites.
When a user visits one of these piracy sites, a new browser window is automatically opened during their session, and this new window is used to load a different website or an ad. In some cases, the user sees the content in this new window, but in other cases, the window is hidden behind the original site they are browsing. This traffic does involve a human user, but it’s acknowledged to be of low quality because the content loaded in the pop-up window was not requested by the user, and, in many cases, they may never see it.
Data from SimilarWeb show that IBTimes.com began purchasing traffic from pop-up and pop-under windows as early as the fall of 2016. Social Puncher found that as the site’s organic search traffic declined, it replaced the audience with purchased traffic.
This paid traffic also served to increase the portion of US visitors going to the site, according to SimilarWeb data. Before purchasing traffic, just over half of all visitors to IBTimes.com were from the US. But that percentage increased to 80% during the critical period when the CFPB campaign ran. SimilarWeb also shows that, during the period of the campaign, almost a third of the IBTimes.com audience came from purchased traffic.
Social Puncher’s report concludes that IBTimes.com purchased the audience it needed to ensure it met the campaign’s requirements.
CFPB placed ads via a connected ad agency on Newsweek and IBT. The audience for the ads basically did not exist. This is significant fraud and it is very doubtful that Newsweek will be around next year. I hope their last article is about their own demise.