The Business of Trafficking in Political Disinformation and Fake News

In my previous article on Decide Technologies’ connections to the alt-right, I shared my research into when LockerDome’s alt-right advertising network first launched shortly after Ferguson, the size of the network that we can see with our own eyes and my estimates for how much money the company is paying out to alt-right publishers and how much they’re making.

  • Size of Alt-right publisher network: 115 sites generating 567 million page views a month 
  • Revenue to Alt-right publishers: an estimated $6.53 million to $15.24 million a year
  • Revenue to Decide Technologies: an estimated $0.54 million to $1.27 million a month

In this article, I’ll explain how ad networks work for any publisher, and why Decide's business proposition lends itself especially well to working with fake news and disinformation networks.

Alt-Right publishing offers a simple and lucrative business opportunity. The unit cost of producing fake news stories is relatively consistent, but the potential ad revenue generated against every article grows exponentially if you can amass a large and loyal audience. Once the content production costs are covered, potential profits are enormous.

So the goal is: post as many stories as you can, as cheaply as possible. In many ways, the goals are no different from a mainstream media organization, but one’s role in society as a fake news producer is, ironically, a lot less ambiguous.

With The First Amendment as your shield, you can say whatever you want, or so it has seemed in recent years. And since you have no direct advertisers, you’ve got no customers pestering you about objectivity out of concern about protecting their brand.

Here’s some of the strategies “fake news entrepreneurs” –an emerging category of entrepreneur increasingly researched by academics– use to maximize online ad revenue to drive profits. Again, as explained in my first article in this series, I shall use the names LockerDome and Decide interchangeably but will always be referring to the same company.

Multiply Ads to Multiply Revenue

There are built-in multipliers on the base ad revenue a publisher can generate.

For instance, the more ads you splatter across your website or the more web page views you can drive in every browsing session, the more revenue you will make. Or you can create your own network of dozens of fake news websites, called “splogs” (spam blogs) all reposting variations on the same content, and all splattered in ads.

You can then use “Right-wing news aggregators,” like the Drudge Report or RealClearPolitics, which command huge audiences that generate more than half-a-billion page views a month, to drive millions of visitors to all of your different sites recycling fake news, and generate revenue from the ads displayed to them.

Gold Rush

Another way to drive revenue is “online advertising arbitrage,” otherwise known as Ad Arbitrage.

Ad Arbitrage is an audience growth strategy. Publishers spend their ad revenue on buying advertising that promotes their stories, in the hopes of attracting more visitors and therefore generating more ad revenue. Initially, the cost of this advertising may be more than the revenue it generates, but the goal is to hit a critical mass of attention, such that every page view becomes worth more than the cost of acquiring it.

That means profits. So, every Alt-Right publisher with an appetite for risk, no matter the size, has an incentive to spend on an arbitrage strategy until that breakthrough moment when they get their costs covered. From that moment, it’s all aboard the gravy train.

The Dystopian Effects of “Personalized” News

To be fair, Ad Arbitrage is actually a stressful way to make money, prone to boom and bust cycles. But it has become significantly easier with the rise of online social networking.

Social media websites and apps made it much cheaper and faster to reach users en masse. Proprietary advertising platforms, like Facebook Ads, Twitter Ads, and LinkedIn Ads enable savvy business owners to easily identify a narrow set of users and quickly target them through a narrow range of personal interests, making it much more affordable to get your message in front of them.

If you can influence that user emotionally, you may even harness the inherent viral mechanics of these platforms, such that they spread your message for you, increasing the visibility of your ads, while effectively driving down the cost of reaching new people.

Furthermore, as social media consists of feeds based on your particular interests, other users will never see or experience the exact same thing that you’re seeing or experiencing at the same time. These new types of algorithms gave rise to a boom in fake news entrepreneurship, because personalization made it easier to evade the much stricter content quality controls enforced by search engines like Google.

How Ad Networks Measure Reach

The Interactive Advertising Bureau (IAB), which develops industry standards and provides legal support for the online advertising industry, seeks to align ad campaign performance and measurement practices globally. Most importantly, the IAB has standardized around measuring the availability of online “ad inventory” and “deliverability” across all platforms. The delivery of all digital advertising is counted in “impressions,” which is the number of times an ad unit is shown.

LockerDome trades in a specific type of digital ad buy known as “backfill” or “remnant inventory,” which means it buys up unsold digital ad space at the lowest possible price and then sells ads in those spaces at a profit. That makes it a low-quality ad network, unlikely to command as high a unit-price per digital ad as higher-quality networks like Google AdSense.

Why LockerDome is an Attractive Proposition to the Alt-right

Nonetheless, for publishers and advertisers alike, LockerDome’s low-quality proposition is still relatively attractive because it secures a base-level of revenue.

If you’re a publisher, LockerDome can effectively “guarantee” you baseline ad revenue even when other ad networks have banned your website. And as an advertiser, tons of cheap “ad inventory” just represents a larger opportunity to acquire more customers and lower your “customer acquisition costs” (CAC).

Google Funds Disinformation Too

You might be wondering, hey isn’t Google also monetizing the Alt-right? Yes, they are, and Pro Publica just released an investigation entitled: How Google’s Ad Business Funds Disinformation Around the World.

Nonetheless, to be clear on the similarities with Decide, Google AdSense/Display Network does also effectively provide a baseline revenue through their remnant inventory product which alt-right publishers can try to exploit.

However, the difference is that Google does not offer fixed prices for ads (which we’ll explain in the next section), so it’s not such a reliable source of revenue for disinformation compared to networks like Decide, RevContent and MGID.

Secondly, and more importantly, Google is continually updating their publishing standards and, unlike Decide, frequently bans sites publishing disinformation. Below is a screenshot of an email EQ received on April 13th, 2022, notifying publishers of the content monetization policy change.

CAPTION: The Google AdSense Team sent this message to all publishers (of which EQ is one) on April 13th 2022.

How a Publisher Calculates Ad Revenue

In a forum post from August 2019, LockerDome offered a publisher seeking to monetize their website the following rates on a single ad unit. LockerDome offered to place an ad every time the website was loaded – a “100% fill” rate. 

For 20,000 ad impressions on each type of device, LockerDome offered to pay a maximum of $1.20 on desktop devices, $0.60 on mobile and $0.50 on tablet. It would cap payments on any given day once traffic from visitors using each type of device – desktop, mobile, or tablet – reached 20,000 impressions.

CAPTION: A screenshot of a forum post from August 2019, in which a user who was looking to monetize their website was offered the following rates by LockerDome in return for displaying a single ad unit.

The Over-Under

To save you doing the math, that “20k Daily cap per device” effectively promised a daily maximum pay out of $24/day for desktop ads, $12/day for mobile and $10/day for tablet ads – for a total maximum payout of $46/day in return for displaying a single ad unit. 

Desktop: $24/day x 30 days = $720

Mobile: $12/day x 30 days = $360

Tablet: $10/day x 30 days = $300

These calculations are possible because LockerDome offered 100% fill rate. It’s worth noting that most ad networks cannot and do not promise 100% fill rate (also known as “delivery” rate), due to the nature of “programmatic advertising” – the digital ad placement auction run by algorithms. This is another point of difference between this St. Louis startup and the other ad tech companies listed as resellers on alt-right sites, such as Pubmatic, Open X or Magnite.

Fake News Entrepreneurs

The most enterprising fake news entrepreneurs could get really granular in accounting for the business proposition offered by LockerDome above. If the publisher could hit the maximum traffic threshold of 20,000 ad impressions per day across all devices, every day for 30 days, that meant they stood to bring in an average of $1,380/month.

To be fair, delivering 1.8 million ad impressions a month is no easy task. In order to reap the maximum $1,380/month for placing one LockerDome ad unit on their website, they’re expected to deliver 600,000 ad impressions across three different device types (mobile, desktop and tablet), over a 30-day period. 

Nonetheless, whether they hit that target or not, that effectively means they’ll be paid an average of $0.77 for every thousand ad impressions they generate. It’s not great, but it’s not nothing.

Just Add More Ads to Increase the Value of Every Article

But, as I said at the beginning of this article, there are simple ways to multiply this income stream. The easiest: just add more ads.

If we take desktop users alone, then hitting the 600,000 ad impressions cap for that device type would generate $720 in revenue every 30 days. However, if you add just one more desktop ad units per page paying $1.20 every thousand impressions and the economics look more rosy: at $1440/month in revenue you’ve already hit the maximum payout of your original offer.

Special Relationships

Nonetheless, whether an ad network like Decide will let you run three ads per page, is a matter of negotiation and would require a special agreement. In the example above, that was not the offer LockerDome made to the user.

However, in my research, most Alt-Right sites were running at least three LockerDome ad units on every page. Many sites were also part of a network of publications (or splogs) themselves, such as BizPac, Republicans Voice or Patriot Ads, rather than individual fake news entrepreneurs.

This means that every page-view of content on these sites creates three digital ad impressions, not one; meaning every page is worth three times as much. It also suggests a closer business relationship between those publishers and Decide Technologies than is normally afforded to “ordinary” users.

With that in mind, once you’re in the routine of regularly churning out low-cost fake news content, it’s easy to imagine how to triple your revenue overnight and start earning real money.

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