Dozens advertising-technology companies have cut ties with Newsweek Media Group over concerns about allegedly fake website traffic, moves that threaten to exacerbate the company’s financial difficulties as it contends with a wider fraud investigation.
Newsweek said Wednesday it had fired two employees connected with the ad issue, but the developments nevertheless have the potential to scare off advertisers and add to the turmoil surrounding the parent company of the storied Newsweek magazine brand.
According to the WSJ: “Beginning almost a year ago, DoubleVerify’s fraud lab started spotting patterns of invalid traffic on IBTimes.co.uk, said DoubleVerify Chief Executive Wayne Gattinella, and Matt McLaughlin, its chief operating officer.”
One network, AppNexus was a big supplier of revenue — and many of their advertisers were in theory defrauded. They ended their relationship after being exposed on national media as a vendor.
Report claims that IBT, a newsweek company, supplemented a drop in organic search traffic to its website with paid traffic that used redirected traffic from pop-up or pop-under ads from pirate streaming sites. The vast majority of the ads were served this way, making it likely that real people never saw them — or immediately clicked away — while still allowing IBT to meet the buy’s traffic requirements.
Meanwhile, DoubleVerify, a company that offers software for advertisers and ad vendors to authenticate the quality of the locations where their ads appear, has flagged four IBTimes sites and Newsweek.co.uk as having invalid traffic. The warnings signal marketers that the sites are risky to buy ads on.
Unfortunately, this type of method to inflate traffic and to defraud advertisers is regularly done, and we exposed on such company just recently.