The digital advertising supply chain has gotten more complicated, and that's provided a major opportunity to European websites that offer access to pirated content. Nearly half the advertising found on sites that offer pirated content comes from mainstream brands, according to a new study commissioned by the European Observatory on Infringements of Intellectual Property Rights.
The organization examined more than 180,000 ads that appeared on more than 1,400 pages of sites that are known repositories of links, torrents or direct hosts of pirated films, music or television shows, or links to sporting events. It found that 46 percent of the ads that appeared on those sites came from legitimate brands, including many owned by some of the biggest ad spenders on the planet; 46 of the top 100 advertisers by global ad spend were represented in the ads at least once.
The rest were categorized as “high risk” ads, which were less ads than pop-ups or ad units designed to dupe site visitors into installing malware. All told, the report, which was released this month, concluded that these sites are able to earn up to $5.8 million apiece by selling ads; it did not list a projected overall revenue total.
While companies like BitTorrent have tried to frame themselves as an attractive media purchase for brands looking to court younger consumers, most advertisers try to steer clear of advertising on these sites, which — in addition to illegally offering content made by media companies with which those advertisers have relationships — are often packed with harmful links that can compromise users’ computers.
In many cases, their ads wind up on these sites anyway. Digital advertising has moved past the days when brands or ad agencies purchased ad inventory directly from media outlets, evolving instead into a marketplace where ads targeting specific types of consumers are dynamically inserted into available slots all over the internet by sophisticated, automated intermediaries.
This glut of middlemen has compromised the digital ad supply chain, often leading to brands not knowing where their digital ads wind up. This problem has become so widespread that dozens of marketers — including Unilever, Johnson & Johnson and Walmart, as well as advertising agencies such as Starcom Mediavest Group, ZenithOptimedia Group and Horizon Media — pledged this past December to take steps to reduce the likelihood that their ads would wind up on sites or platforms allowing people to download pirated content.
As in most industries, there are good and bad actors. The intellectual property organization’s research found that just 25 intermediaries were responsible for placing nearly three-quarters of the legitimate ads found on these sites. Its report did not list any of the companies by name.
“The entire digital ad ecosystem has a role to play,” the report states.