Who can you trust? Interactive Advertising is Dangerous!
If you’ve been reading the industry publications, you’ve seen that there has been some talk about “fake agencies” doing business in the industry, notably a company under the name “Bellas Interactive.” Casale Media wrote in MediaPost about their encounter with the company, where they were so fooled by this fake agency, that they even granted them credit based on fake trade references. This story is extremely interesting to me, because it shows not only that interactive advertising has scams and frauds out there, but that even those working for a major interactive advertising network are quite gullible and ignorant of the methods and scams. I’ve been covering types of scams like this for years – as has the publications I founded including ADOTAS. This means it’s time to review again what one should do while working with new clients.
First of all, to be completely frank, I am surprised that someone at Casale was so…well.. there is no other way to say this… so STUPID that they allowed this company in the first place to do business with them. (NB: Casale emailed me and wanted me to make clear they didn’t actually do business) Casale has been around for quite a while and is generally considered one of the highest quality interactive advertising networks in the business. Interactive advertising, because of its nature is extremely vulnerable to all types of fraud. With the internet opening up borders, anyone from almost any country can pretend to be anyone, from almost any other country. With P.O. boxes, postal forwarding, IP phones, a virtual company can look like a 100 person company in minutes. In fact, there are some players including agencies and networks that work mainly virtual – and do volumes of business that would be unthinkable just a decade before without a “real” office.
In this case, someone at Casale obviously screwed up. “BellasInteractive” was obviously a fraud. The website was poorly made, looks like a cheap template site, and despite the claim on the site that they have been in business since 1994, the website was registered in April of 2010. That being said, let’s look at some keypoints that are important in dealing with new (and perhaps existing clients) and how to spot some obvious fraud by “fake companies”:
1) Do research. Look over the domain registration (WHOIS) and see if it matches the information provided. If a website says that it was founded in 1994, and the domain registration says it was registered in 2010, there is a huge red-flag right there. Domain registrations can provide significant information, including other possible email addresses that area associated with the domain and domain hosting information. If the registered contact email address is affiliated with something else that looks fishy, that can be a huge giveaway that there is a scam. If the phone number is international in the registration or does not work, that’s another sign something ain’t quite kosher. Similarly, any real marketing company that isn’t engaged in questionable practices will not have a “private” registration. Also, verify corporate information with the State they are doing business with. Every single State has an online verification system now.
2) Look over the website. If it looks like a simple template with no real information about the company except basic template crap about how they’ve been doing business, how they help their non-mentioned clients, them something is wrong. Similarly, look over the address and phone number on the website. Any company that doesn’t list its address or phone number on its website is a dead giveaway of some sort of scam. All companies that are in this business want people to call them and do more business with them. Also, check out the address on the website – if it goes to a dropbox, or someone else’s address that should make your spidey-sense tingle a bit.
3) References are extremely important, and they should be used as a key guide. Those references must be people that you know. If a company is unable to provide references from people that your company does business with, then you need to ask them for other references. In the case of Casale Media, the scammers just made up other companies and put them down as references. That reference should be someone that you yourself would give credit to because they are well known, trustworthy and what they say about another company is credible. Verify the information also with other people that you know – ask people in the industry about a company that seems fishy, and find more information.
4) Be Smart. I’m just bewildered by the complete lack of common sense in the industry sometimes. I’ve been writing about this for years – you’d think people would be listening right? However, time and time again, people are fooled by extremely obvious scams. It’s often because of new people in the industry with little experience. In those cases, the company owner, the supervisor should be watching everything that employee does, if there is an issue. During the credit check process, for example, numerous people should be copied on the applications including the CEO, the VP of Sales, and other people – just to overlook the process in case they see something. Be smart – there are a lot of scams out there, andbeing a little diligent will make a huge difference.
5) Look at reputation. This is the hardest part, and often requires knowing people in the industry. My clients often hire me because of this. If a company has a horrible reputation of doing bad things, that is should always make you wary. Companies that have been targets of enforcement actions, law enforcement, compliance issues, payment issues, you name it, should be avoided. Would you, for example, allow a convicted sex-offender babysit? Similarly, if a company consistantly has issues, you need to examine if its worth doing business with them. I’ve found that people who cause issues, consistantly will always cause issues — a tiger can not change it’s stripes, a leopard can not change its spots. Once a scumbag, always.
What’s your opinion?
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11 Responses to “Who can you trust? Interactive Advertising is Dangerous!”
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(C) 2010 Pace Lattin. It is the policy of this blogger to not edit or remove any content and comments, unless it is specifically attacking a protected group or irrelevant to the conversation, such as a spam. These are the OPINIONS of the respective writers, posters, commentators. All DCMA Notices shoudl be sent to pace@pacelattin.com
If they have a real credit person (it takes a cynic frankly) the alarms should have gone off almost immediately.
Great article, Pace. These fake agencies are a bane to our industry. They are very crafty and use knock off names like Cone Incorporated to emulate a respected agency like Cone, Inc. and another is Martin and Williams to emulate Martin & Williams another respected agency. We found them out by the knock off names, and the references all seemed to come back too clean and too quickly from unknown companies. The websites all looked to be very quickly created and WHOIS info very recent. Tags were sent pending credit review and they were all variations on respected adserving companies such as http://xxxx.mediaplex.com.
Sellers beware!
LOL, so if you get sued by a states AG like Elliot Spitzer. Sued By Myspace and lost millions, we should avoid that company?
On the subject of the blog… Until someone doesn’t get paid, it seems like it’s up to the network regarding their lax or conservative credit policies. The bigger issue is whether the content providers got paid in spite of the lapse.
Pace, nice post! I’m glad this happened to Casale, they kinda deserve it. For an agency that has been around for so long and being that they take such huge margins from both the advertiser and publisher sides they can’t just cry foul and expect people to feel sorry for them. This is by far one of the most cutthroat industries around. Things like this happen all the time, and will never stop happening. There’s no real way to protect yourselves against it because it goes along with that one golden rule, "if someone wants to fuck you over, they will." Exposing these things will only make the fraudsters and scammers become even more creative. I think that one of the only surefire ways of protecting yourself against it is to do business with people you meet in person first and have a reputation for paying and/or being whom they say they are. But let’s face reality, when an advertiser or agency comes knocking on your door offering to do huge new business or brags about a budget that would make you hard, do you really think an agency will say no to them or cap them? I doubt it.
LOL, so if you get sued by a states AG like Elliot Spitzer. Sued By Myspace and lost millions, we should avoid that company?
^This for the win. Come on Pace – LETS LOOK AT WHO YOU WORK FOR – COME ON DUDE
But the point is that Casale DID spot it (in a roundabout way) because they though something was phishy, and as they admitted.. many of the signs was obvious when you looked at it differently. So many ad networks don’t even both doing that and indeed seem happy dealing with malware pushers. Have you experienced Clicksor ads?
I had to LOL a bit at the authoir’s Media Breakaway connection. In 2005 (when it was called OptInRealBig) the defence make in the Elliot Spitzer case was that OptInRealBig were not responsible for the alleged spamming because it was done by affiliates.. and how could they possibly audit affiliates? In fact, the process is almost identical to ad vetting!
To be fair, the vetting problem isn’t just with the likes of Casale and Media Breakaway. Many web hosts and colos turn a blind eye to crimina and unethical activity as long as they get paid. Then very often you have payment processors involved, plus a whole load of other "legitimate" people providing support for these activities.
I received a bunch of emails and a few comments about this article, questioning how I could work for a certain company that has been the target of more than one compliance and legal actions. Several people emailed calling me a hypocrite, and there was a whole SlashDot discussion about my employer.I would 100% agree I am a hypocrite!
While I haven’t talked about it, I resigned a few weeks ago after realizing that it wasn’t a good fit for me. Probably the best decision I’ve ever made. That’s all I’m going to say about that, in the interest of moving forward.
Great post Pace! Ironically many don’t even do the most basic research.
If you look at their whois and check the usps.com website you will see that the address is not valid. Not only is the domain registration date a red flag but if the whois address and phone numbers are invalid, then the research is pretty simple. Further even if the address and phone are correct, you can further verify if the address is a business or residential address. But lets say they’re really good and, in addition to a valid address and phone, they buy an aged domain, check archive.org to see what the website looked like 5 or 10 years ago.
The bottom line is that,except for only the most sophisticated scammers, most agencies should be able to vet applicants with a few short clicks.
One thing I would suggest (at least for US-based organizations) is to check with the Secretary of State for the state where the organization was formed. My organization is based in Georgia and by visiting http://sos.ga.gov/ you can search for entities by name. You would see that my organization was incorporated in 2006, is in compliance, as well as the names and addresses for the corporate officers. Obviously somebody could create a phony corporation but it’s unlikely that they would go to the expense (about $150 in Georgia plus annual fees).
If you do search for a company name, one thing to be aware of is that the corporate name may be different than their trade name (D/B/A = "doing business as"). If that’s the case then you should ask for a copy of the bylaws reflecting this trade name (this is the same requirement that a bank would have in opening a bank account with the D/B/A account styling).
I run a non-profit organization and depend heavily on online trust. I’ve found that by utilizing trusted third-parties (like the Secretary of State) this does not have to be a difficult task – even online where we all know that it can be very easy to portray yourself as something that you are not.
Drew Crecente
Executive Director, Jennifer Ann’s Group
JD Candidate 2011
This is definitely a problem we encounter almost daily. Most of them will prepay, anything that is even remotely suspicious we don’t give credit to. However even when many of them will prepay it still hurts the network because they run crap. It’s hard to turn away dollars in this environment but you really need to. I tell my sales team if you can;t figure out how they are making money in 2 minutes or less then you need to turn them away or really dig into their operation. Mice piece Pave but what’s with Spidey and pals? am I missing something here?