‘The Dark Lord of the Internet’ Used Sponsored Content As His Secret Weapon
The Atlantic’s Taylor Clark tells the incredible story of Jesse Willms, a serial entrepreneur who, by age 22, built a company, Just Think Media, with $100 million in annual revenue — over twice the amount Facebook earned the year Mark Zuckerberg turned 22, Clark notes. But while Zuckerberg’s game was connecting the world, Willms’ business centered around duping people into signing up for “free-product trials” for acai supplements, teeth whiteners, and colon cleansers. Then, he automatically enrolled them in subscriptions that would charge their credit card for months on end.
Subscription schemes are nothing new. Willms’ real secret was getting people to sign up for all of those dubious products. Writes Clark:
“If you’ve used the Internet at all in the past six years, your cursor has probably lingered over ads for Willms’s Web sites more times than you’d suspect. His pitches generally fit in nicely with what have become the classics of the dubious-ad genre: tropes like photos of comely newscasters alongside fake headlines such as ‘Shocking Diet Secrets Exposed!’; too-good-to-be-true stories of a ‘local mom’ who ‘earns $629/day working from home’; clusters of text links for miracle teeth whiteners and ‘loopholes’ entitling you to government grants; and most notorious of all, eye-grabbing animations of disappearing ‘belly fat’ coupled with a tagline promising the same results if you follow ‘1 weird old trick.’ (A clue: the ‘trick’ involves typing in 16 digits and an expiration date.)”
Wilms’ ads would lead to sites with compelling fake news articles and listicle-style content. Usually, these ads are obviously scams, but Willms had such a knack for duping consumers through manipulative content that he was wildly successful. New programmatically bought and sold “sponsored content” ad units didn’t hurt either. Using these channels, Willms was able to “capture 4 million paying customers and nearly half a billion dollars in sales, all at an age when many people are spending their work hours upselling the Never Ending Pasta Bowl at Olive Garden.”
After masterfully deceptive content, the second key ingredient to Willms’ scheme was affiliate marketing — a system in which marketers buy ad space on a brand’s behalf in exchange for a cut of any sales they produce. Willms’ offered unprecedented rates to affiliate marketers that often exceeded the base cost of the products they were shilling, since Willms’ business was all about reoccurring, hard-to-cancel fees. As a result, affiliate marketers jumped at the chance to spread ads for Willms’ products far and wide — “like a tropical rash,” writes Clark — and onto mainstream sites like ESPN.com, FoxNews.com, and MSNBC.com.
After years of fast, lavish living, Willms and his company were shut down by a civil investigation by the FTC. But that hasn’t eliminated the programmatically-purchased and fraudulent advertorials that plague publisher sites.
In late 2012, Clark sat down with Internet-fraud expert Pace Lattin to investigate the issue:
These are all fake.’ FTC guidelines require such sites to label themselves as advertorials, but their creators often skirt those guidelines by disguising the disclosure with small, vanishingly pale fonts.”
“Here’s ‘Las Vegas Celebrity Doctor uncovers one simple trick for a flat belly,’ ” Lattin told me, browsing through a random MSNBC.com page. “I click on it, and it goes to a fake news site. You’ve got sponsored links that say ‘Nevada mom publishes a free facelift secret, doctors angry,’ which goes to a fake blog. There’s one that says ‘Mom outsmarts Botox doctors with her $4 trick to wrinkle-free face, only six trials available,’ which is completely fraudulent; it’s obviously not true.
“These are all fake.’ FTC guidelines require such sites to label themselves as advertorials, but their creators often skirt those guidelines by disguising the disclosure with small, vanishingly pale fonts.”
Not all ads that make these kind of promises are fraudulent; the problem is that its hard for advertisers to know and manage which ones are legitimate, and there are very few regulations to keep them off exchanges. Scrolling through Yahoo just now, these were the first two native ads that I saw in my feed:
Are the claims made here legitimate? It’s hard to tell.
For publishers, these concerns are paramount, especially as many in the ad:tech world push for a world in which more native ads are bought and sold programmatically, instead of being hand-crafted.
For brands, Willms’ story should serve as a reminder of the power and responsibility that comes with branded content and that they should safeguard themselves against deceptive content practices. Though major brands don’t flood the Internet with fake news articles and claims, some do operate lightly-branded content sites that hide brand affiliation while plugging their own products. Others do the same thing through sponsored posts that are not clearly labeled. That doesn’t necessarily make those brands the dark lords of the Internet, it does put them on the dark side of content marketing. They’ll find themselves in a precarious position once their shady practices start to come to light.
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