Kargo’s “no fake news” guarantee is fake news

How a simple mislabeling scheme has been hiding Kargo’s ties to dozens of disinformation outlets.

Welcome back to BRANDED, the newsletter exploring how marketers broke society (and how we can fix it).

Here’s what’s new with us:

UPDATE (8/17/21): Following our report, Kargo updated the labels of four dark pool sales houses - Next Millennium, Aditude.io, Freestar.io and Publisher Desk - to “Intermediary.” However, as of last night, all four pools have now been removed from their sellers.json directory.

UPDATE (8/11/2021) we updated this post a few hours after publication to clarify that Kargo's comments and Jud Spencer’s tweet were about Sellers.json, not Ads.txt.


Last week, we tweeted out an unsettling find about Kargo: that they were labeling a handful of ad management platforms as “PUBLISHER.” When we checked back one day later, the entries had been changed to “INTERMEDIARY” without comment or explanation.

This was a pretty sketchy move for Kargo, whose business ostensibly revolves around transparency. Kargo, which brags that they’re “100% ads.txt certified” (there is no such thing) and has the dubious honor of being ranked in the “top 1 percent” for brand safety by Integral Ad Science, has been a vocal champion of cleaning up the supply chain.

Kargo has even positioned their so-called exclusive, direct relationships with premium publishers as the antidote to ad-funded disinformation since 2017, when the Sleeping Giants campaign first set advertisers scrambling for a solution. (Disclosure: Nandini co-ran Sleeping Giants).

Today, they say they are so sure of their inventory that they even “guarantee no fake news” in their supply chain. How do they do that? Kargo general manager Robert Leach explains:

There is no middleman, giving us total transparency into every ad slot that loads on the page and preferential treatment for advertisers that run with us to win the impression. And when it comes to the economics between us and the DSP and the client you can be sure there are no hidden costs.”

As you can see, Kargo is all about keepin’ it tight and transparent. So it’s strange that Kargo has been mislabeling a handful of ad management companies as “PUBLISHERS.”

Those are middlemen. Mislabelled middlemen. Mislabelled middlemen who manage hundreds and possibly thousands of other publishers that Kargo has no control over. Mislabelled middlemen who connect Kargo to everything from disinformation outlets like OANN and ZeroHedge to full on fake news rings.

Publisher vs. Intermediary: Why does it matter?

You might be wondering: Why does it matter whether an entry is labeled PUBLISHER or INTERMEDIARY?

These labels only really exist for one reason: to help advertisers confirm that their ads are being served on a verified entity (like Slate.com) and not someone pretending to be Slate.com. In an ecosystem full of domain spoofing, where fake sites pretend to be legitimate outlets, the ads.txt initiative is supposed to give advertisers a little confidence that their ads are ending up in the right place.

In theory, a marketer should be able to open up two tabs and find a match like this:

One of the things they will scan for is the Seller Type, which provides them with a crucial piece of information. Is the entity a…

PUBLISHER aka an outlet like Food52, Refinery29, Vice, Slate, etc.

or

INTERMEDIARY aka a 3rd party that manages the publisher’s — and hundreds of others’ — adtech, revenues, bidding, etc. for them.

(Side note: Exchanges can also use the “BOTH” label. For a more detailed explainer on seller types, read our story on Seb Gorka’s ads.txt file.)

A lot of advertisers — particularly big brands — want to see PUBLISHER up and down their list. Why? Because it tells them they’ve made a direct buy with an outlet (or media group like Condé Nast), which they can track back to a single Seller ID. They are even willing to shell out a premium CPM rate for the privilege of accessing the audience they want and an ad buy they can verify and track back to that single account.

The alternative, buying with an Intermediary account, is more of a shitshow. Intermediaries (or middlemen) manage ads for an unlimited number of publishers, under a single account ID. You would never be able to tell where their ads were served or which specific outlet your money flowed to from looking at that ID.

But for this system to work, we have to rely on ad exchanges to be the source of truth in this relationship. After all, ad exchanges are the ones that must have the correct information on file to make the payouts.

So what if an ad exchange were to lie about their inventory? What if an Intermediary called itself a Publisher and the ad exchange just OK’ed that? What if they could charge advertisers those higher CPM rates reserved for Publishers while letting ads run wild on an unknown number of websites and domains operated by someone else?

Well, that’s exactly how you would end up funding disinformation and hate sites, right under everyone’s radar.

Meet A Kargo Dark Pool Sales House: Next Millennium Media

Here’s how this all works.

Up until last week, Kargo’s sellers.json listed Next Millennium Media as a Publisher. But if you look at Next Millennium’s website, you’ll notice they don’t publish…anything. They just broker ads between advertisers and publishers. They are in fact, an supply-side platform (or SSP).

Next Millennium has declared themselves a Publisher anyway, and until last week, Kargo confirmed it. Together, they’ve been operating what we call a dark pool sales house.

Under the guise of “Publisher”, Next Millennium Media connects their 500+ “handpicked” publishers to an impressive roster of advertisers, including Fortune 500 companies like Coca-Cola, Disney, Delta and Nestle.

Who are these publishers? You can check them out in Next Millennium’s sellers.json here, but here are the highlights:

Next Millennium Media works with the following fake news rings…

Economic Advisors, Inc.

100percentfedup.com, americanlookout.com, noahreport.com, protrumpnews.com, thepalmierireport.com, benny.com, thelibertydaily.com

wnd, LLC

wnd.com, debka.com (note: the same LLC also operates israelnationalnews.com)

Zerohedge LLC

zerohedge.com, kitco.com

VIP Ad Solutions, LLC

analyzingamerica.org, sarahpalin.com, diamondandsilk.com, savagetakes.com, chicksonright.com, breakingreports.org

WeloveTrump

welovetrump.com, dailytruthreport.com

Trending Politics

trending politics.com, grahamallen.com

Next Millennium Media also works with the following disinformation outlets:

We asked Kargo for comment. They replied:

“Kargo vets every site within an intermediary individually and selects only specific sites that pass our qualitative and quantitative requirements. Only a small handful of sites were accepted and none of them were the sites in question.”

OK, and how do they vet them?

“Every website is hand selected and is graded on a monthly basis per the pub scorecard… The pub scorecard assesses for factors including data such as viewability, IVT, response rate and scale, alongside assessments made by Kargo’s mobile advertising experts, such as brand safety.”

OK, so they don’t have any internal standards or definition for fake news. They’ve outsourced the work of identifying fake news to 3rd parties. Is that correct?

We do both.”

OK, so who the f&*% is Kargo working with?

This leaves us with more questions than answers.

Kargo has made some pretty bold claims on transparency, going so far as to issue a press release that they were the first platform to achieve 100% ads.txt compliance. But since then, it looks like they’ve haven’t applied this to their sellers.json.

Citing tweets from Jud Spencer, Principal Software Engineer at The Trade Desk, Kargo told us that their sellers.json labels “are not regularly reviewed” because they  “are not actively in use” and “do not affect any bidding decisions.”

But that’s just not true. Google literally offers targeting filters based on these labels. Advertisers rely on automated buying decisions which rely on these labels. Ads.txt is functionally useless if advertisers can’t cross-check with their ad exchange’s Sellers.json file.

In other words, labels are everything. They tell advertisers who their ad exchanges are partnered with. They tell us what publishers their partners are partnered with. And it signals to advertisers that their ad buys are safe and that their ad dollars are flowing to the right places.

Kargo understands all this. At least they appeared to at one point in time.

HELPING PUBLISHERS FIGHT BACK USING ADS.TXT [Kargo blog]

“What we’re seeing is a flight to quality, people asking tougher questions like ‘Who are your publishers?’ ‘What is the quality?’” Kargo CEO Harry Kargman told CNBC back in 2016 as he pitched his product to terrified advertisers.

So yeah, that’s actually a great question and the point of this entire post: Who are Kargo’s publishers?

Thanks for reading,

Nandini & Claire


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