Abstract
No Cheap Traffic is a critical view on the unregulated rise of harmful online advertising. The goal of this whitepaper is to issue a call to comprehensive action from world governments, and offer an effective financial win-win solution as an alternative to legal regulation.
Introduction
Advertising is the purchase of human attention for either short term or long term purposes – performance and brand advertising, respectively.
It can be divided along a few axes:
- Targeted vs Untargeted
- Offline vs Online
- Performance vs Brand
- Quality vs Low-quality
For example, a billboard for a brand of beer is 95% untargeted, 100% offline, 95% branding, 100% quality. A less-than-legitimate banner for cryptocurrency trading on a streaming website is 95% untargeted, 100% online, 100% performance, 100% low-quality.
Now let’s see how government regulation and advertiser incentives fit into this context.
Should governments regulate the following ads with the same measuring stick?
- An ad shown to a random person walking down the street
- An ad shown to a person who just searched for “Bet 365 bonus code” on Google
- An ad shown to a person who just searched for “Bet 365 bonus code” on Google and has a search history related to gambling addiction (ie gambling addiction clinics)
Ideally, I believe the following should happen in each scenario:
1. The person walking down the street should see as few gambling billboards as possible, due to regulation such as higher taxes for gambling-related ads.
- The one searching on Google should see any ads the free market wants to show, as they’ve decided to gamble out of their own free will.
- The one with a known history of symptoms of gambling addiction should first see Google-grant ads by NGOs about addiction support, or direct messages as with Covid- or suicide-related searches.
However, most governments lack flexible and innovative thinking when it comes to online advertising. But this is not the problem we’re trying to solve today.
Passing complex laws is not necessarily the easiest and fastest solution. It took over 10 years for the EU to regulate the simple technology of cookies and by the time it passed the ePrivacy Directive (EPD), browser fingerprinting was already on the horizon, making the new directive much less efficient in reducing the effects of online tracking [1].
There is a bigger, invisible problem lurking behind all of this. And if a big problem is divided into enough small pieces, and the solution isn’t glamorous enough, everyone will ignore it. But unlike many other complex issues such as climate change, in the case of harmful online advertising, there is a straightforward solution.
Harmful Advertising
The target of our proposed solution are Untargeted, Performance, Online, Low-Quality ads (UPOL).
Discussions of online privacy and advertisement regulation focuses on maliciously targeted ads – those that target vulnerable members of society . Unlike predatory advertisement, UPOL ads are untargeted and therefore left out of the conversation, especially when it comes to governmental regulation.
However, every marketing expert would tell you the industries that have little to no targeting are the ones that prey on people’s primal urges and weaknesses:
- Gambling
- Dating
- Finance and Cryptocurrency
- Weight loss
- Contests for Free Products
Therefore untargeted ads are often in fact harmful advertisements with very real effects on people in vulnerable states. To add to this, there is a spoonful of adware and malware advertisement, when ad platforms lack proper compliance standards.
Why compliance standards and government policing are simply not enough
Even well-reputed ad platforms like Google Adwords cannot guarantee all-encompassing security and compliance measures.
An example of this is a case of illegitimate domain use involving expired domains purchased through SEO.Domains, an expired domain company I co-founded. The domain name michel-chaudun.jp was purchased and applied for credit card phishing fraud, using the services of Google Adwords. If even Google’s compliance standards aren’t strong enough to prevent blatant credit card data phishing, what’s to expect out of smaller, less-public companies, outside of strict jurisdictions?
Additionally, UPOL ads are extremely hard to keep track of. They are performance-based which means there is no need for brand reputation or long-term customer satisfaction. Therefore the domain names of websites used for UPOL ads can be changed with little to no loss if blocked by an advertising platform. There is even a term for this in black-hat digital marketing communities – “churn and burn”. This alone is an instant red flag for the whole industry of untargeted low-quality ads.
The advertisers behind UPOL ads can choose any jurisdiction they like when choosing a domain name. If additional anonymity is required, they can use cryptocurrency for payments and payouts. Also, UPOL publishers show different ads at different times even to the same users which makes investigating any particular ad practically impossible. Even if law enforcement refreshes the page 1000 times, the same ad may never appear again.
And finally, the UPOL ads are low-quality. Well, what does that mean?
Pricing for online advertisements is determined only by supply and demand. For example, big platforms like Google and Facebook essentially run a micro-auction for every ad click to determine its price. Untargeted traffic doesn’t attract any big brands as it doesn’t do well for neither brand- nor performance-based advertising when it comes to commercial products and services.
When there are no major bidders, the price for ad traffic drops dramatically. On ad networks of traffic providers, the prices run at about 0.01 cents per visit, which adds up to 10 cents per 1000 visits [2].
There is one more concept you need to understand to grasp the full scale of this problem. The concept of zero-click.
Zero-click Traffic
Usually on the Internet you only visit websites you want to. Even if there is an ad, you have to click on it to visit the advertised website. But this is not always the case. Because there is no technical barrier to either redirect users between websites without their consent or open another website in a new window under an active window (called a “pop-under“). This is called zero-click, as no clicks are required for a user to visit a page. Another major driver of similar traffic is push notifications spam.
Because the zero click traffic is so cheap, from an economical perspective it’s a very small part of online advertising. The money spent there is way less than the ad money spent for advertising in Google, Facebook or directly in big websites.
But let’s forget about money for a moment and remember that when buying attention, you buy attention, no matter how much you spend. The attention of John or Kate comes with the same ethical responsibilities. Whether Kate searched for “car insurance” and Google showed a 50-dollars-per-click car insurance targeted ad or John is browsing online and gets hit with a $0,001 pop-under ad for a how-to-win-at-a-casino “strategy”. Both John and Kate are people and from an ethical perspective, we have the same responsibility in a society to prevent them from harmful advertising.
How many UPOL zero-click ads (actual website visits) do you think are served per month? I couldn’t believe the stats when I saw them initially.
A whopping 68 Billion zero-click visits a month and that’s only via one of the many platforms [3].
For comparison, according to Similarweb, Google.com only gets about 85 Billion visits a month.
Pop-unders have more traffic than Google.com and are so overlooked that “pop-under” doesn’t even have a dedicated Wikipedia page. There is a brief mention on the Wikipedia “pop-up” page about pop-unders and how they work in Javascript technicalities. Not a single word about the social effect of dangerous, unwanted and completely unregulated ads that result in an instant actual website visit on billions of actual people every day.
Of course the important questions are, to quote John Oliver, how did we get here and what can we do about it.
How we got here is not complicated – no one ever cared. Marketplaces (if having proper compliance) are not at fault in this case as their existence still provides the auction model needed for the traffic to reach its fair market price. The problem is the demand side doesn’t function properly.
Cheap UPOL ads are a failure of the free market, a price race to the bottom where potential buyers aren’t informed well-enough or are too protective of their reputation. Once the price is too low, the social damage is inevitable. A similar situation occurred with plastic bags, when they used to be so cheap that we used them for everything without worrying about the environmental consequences. Money and free markets are so inseparable from the modern world that anomalies like actual near-free opportunities are extremely dangerous for its proper functioning.
Here is the real world equivalent of what we did digitally.
We basically put for sale keys that can open all home doors in the world up to 5000 times… in supermarkets for 50 cents each. We didn’t advertise it but the key is there for anyone who wants to buy it for 50 cents. While the actions you take with the key may not be, the key itself is completely legal.
Many people buy the key and of course none of those who do care about your wellbeing. Most of the damage is benign, like sneaking into your home to tempt you with penis enlargement flyers. A very small fraction fall for it and while no one ever gets the effect advertised in the flyer, the 50-cents investment of the key buyer generates positive ROI, triggering more keys sold and more of the same.
Occasionally, the consequences of the key being sold would be much worse, such as stealing your possessions or changing the key to your house with one only the criminals have (ransomware).
These days the Internet is a person’s second home. I don’t see a principal difference between accepting to be tossed between 5000 bad websites you didn’t actually want to visit… and giving the world a key to your home that can be used 5000 times. In our thought experiment, both cost 50 cents.
The sad part is the 5000 visits to less-than-legitimate websites cost 50 cents to buy in the real world, today.
There are 3 kinds of places this huge, zero-click traffic of people goes to:
- Criminal activities (malware, ransomware, fake shops, etc)
This is, of course, already illegal so extra regulations are irrelevant. Better technology and policing would help. But another thing to remember is that every criminal business is still a business with a balance sheet. If we could make the traffic less dirt cheap, we can increase the cost to a level where the bad guys cannot operate profitably. And we should because criminal stuff is on the rise.
- Borderline-legal scams (“Get rich”, “win an Iphone”, etc)
These ads often target the elderly and other vulnerable people. They are also quite hard to regulate as it’s very hard to legally define and actually police a phenomenon such as “misleading ads”. People who are victims of borderline-legal scams are less likely to share their experience as they might already be in a socially, physically or psychologically vulnerable state [6].
Given the 100% online nature and already mentioned jurisdiction problem, there is again only one way to cope – somehow raise the dirt cheap traffic price and make their business model unsustainable.
- Website affiliates who buy traffic
An affiliate is someone who sends traffic to a website for a commision of the sales generated.
While many small-scale affiliates use SEO to drive small but highly targeted traffic from Google to their own websites and from there to the end-goal website (usually an ethical business not related to our topic), it’s way easier for many bigger players with capital to just buy tons of traffic, sometimes directly to the end-website via their tracking url.
All this is a multi-billion dollar industry and actually most of the cheap traffic is bought by the quite smart and enterprising affiliate crowd. But remember, affiliates are just intermediaries between the user and the final product/service.
There are some small efforts for affiliate compliance by governments. Some countries have affiliate licensing for certain industries like gambling, others are working on it. But the results are tiny and the workarounds are dime a dozen, especially for the very big affiliates, who hold a lot of traffic hostage and can be tough on negotiating with the brands they redirect it to. After all every brand wants affiliate traffic and it’s the brands fighting for big affiliates, not the other way around. So it’s impossible for the brands to do any real policing. But it’s not their affiliate’s fault that society left a monetary vacuum. Someone is bound to fill it.
There is again, only one real solution – zero-click traffic should not be too cheap.
Solution to Cheap Traffic
In a free market, in auction-based platforms (such as traffic marketplaces) there is an extremely easy way to increase the price of something. Just start buying.
But if big brands don’t want to associate themselves with cheap traffic, who would step up? Who serves non-targeted ads, with a message or product relevant to an enormous group of people that share only a location? Well, the government does.
Every government is among the largest, if not the single largest advertiser in a country. For example, the US government spends about a billion USD yearly on advertising [4], which is more than Coca-Cola [5]. And this is only at the federal level, not counting the significant expenses of the individual states. The state of California spent $111 million in 2 years promoting Obamacare alone [7].
Untargeted online traffic serves the purpose of most government advertising since matters such as public health, safe driving, violence prevention, recycling and climate change are quite universal.
The US Government, for example, spends tons of money on non-targeted advertising, using only a small number of the same large advertising agencies [4].
At the same time the biggest chunk of untargeted traffic in the world is sold mostly to less-than-legitimate advertisers that try to profit off of the vulnerabilities of citizens of the same government for as little as $0.0008 per website visit via a pop-under. The average price for a non-pop-under redirect visit is 0.04$ on average but it’s likely there are leftovers of the traffic sold for $0,01 or less [2].
Meanwhile, everyone who is directly affected by harmful online advertising has no power over the issue – and it’s insupportable that everyone who does have power remains oblivious to the issue. There is one solution and it’s obvious. Desperate times require if not desperate, at least unorthodox measures.
Governments buying their own country’s cheap traffic to protect its citizens is the same as a central bank buying its own currency to keep it stable. Attention is a socially important currency and trading it is okay, but only under appropriate regulations. If an appropriate regulation is impossible, the regulator should enter the market.
Someone please tell them.
Resources
- M. Trevisan, 4 Years of EU Cookie Law: Results and Lessons Learned, 2019. [Electronic resource] https://petsymposium.org/popets/2019/popets-2019-0023.pdf
- Traffic Calculator Tool, ZeroPark.com
[Electronic resource] https://zeropark.com/traffic-calculator/ - Traffic Volume Tool, ZeroPark.com
[Electronic resource] https://web.archive.org/web/20210614091907/https://zeropark.com/ - Government Executive, Federal Agencies Spend About $1.5 Billion on PR Each Year, 2016
[Electronic resource]
https://www.govexec.com/management/2016/10/federal-agencies-spend-about-15-billion-pr-each-year/132139/ - Statista, Coca-Cola Company’s advertising spending in the United States from 2009 to 2019, 2019
[Electronic resource] https://www.statista.com/statistics/463084/coca-cola-ad-spend-usa/ - P. Mcalvanah, Fraudulent Advertising Susceptibility: An Experimental Approach, 2016
[Electronic resource] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2593898 - CNN, California is outspending the U.S. government to market Obamacare, 2017
[Electronic resource]
https://money.cnn.com/2017/12/03/news/economy/california-obamacare-marketing/index.html
