Advertising paid for by major U.S. companies has been popping up on piracy Websites for years, thanks largely to the complicated systems powering online advertising.
The problem doesn’t seem to be improving.
According to new research commissioned by nonprofit Internet safety group Digital Citizens Alliance, an estimated $209 million was spent on advertising placed on sites promoting content theft in 2014. That’s down only slightly from the $229 million the group estimated was raked in by piracy sites during 2013.
The research was conducted for Digital Citizens by media advisory firm Medialink, and published Tuesday in a report titled “Good Money Still Going Bad: Digital Thieves and the Hijacking of the Online ad Business.” The report highlighted three main conclusions:
First, ad-supported content theft is big business and major advertisers continue to support it, inadvertently or otherwise. Digital Citizens said they found ads on content theft sites for Lexus, Sprint, Verizon, Banana Republic, PayPal, Zappos, Amazon, Adobe, Office Depot and many other well-known companies on sites that help users download or access copyrighted content such as movies, TV shows and music.
Second, around a third of the content theft sites examined in the research had the potential to infect users’ computers with viruses or other malware, which could pose security risks for users and also be used to generate fake website visits often used to defraud advertisers.
Third, online piracy sites are rapidly evolving, largely to meet consumer appetite for streaming content instead of downloading it. That could be good news for site operators because of the higher ad prices typically gleaned from video ads instead of banner ads and other formats.
“This remains a major business for online criminals. These are people with business models based on content theft,” said Tom Galvin, executive director of Digital Citizens. In some cases, content theft sites enjoy margins of upwards of 90%, Mr. Galvin said.
So, why do ads for reputable companies continue to wind up on sites promoting illegal activity? Because the online ad system remains easy for savvy site operators to game.
“There is an unending supply of people willing to take a stab at this because it’s so easy to get into the businesses and the odds of getting caught are fairly low,” explained Mark Berns, vice president at Medialink.
In other words, marketers and online advertising companies can’t be sure where their ads are actually being placed, or they could be simply turning a blind eye because it suits their interests to do so.
Mr. Galvin called on advertisers themselves to raise awareness of the issue in order to help mitigate it.
“The problem exists almost exactly as it did a year ago,” he said. “We need awareness on two fronts; advertisers need to be aware they’re playing a role here and Internet users need to understand they’re at risk.”