How Big Brands - With Help From Google & Yahoo - Finance Online Piracy

Are major brands funding online piracy? The answer is yes, even if they're not fully aware of what they're doing.

That's the clear conclusion of a recent report out of USC's Annenberg Innovation Lab, which says the top ad networks finance 86% of sites that feature illegally distributed content. 

The results, which named Google and Yahoo among the top offenders, used Google's own Transparency Report to name the 10 ad networks with most takedown requests under the Digital Millennium Copyright Act (DMCA) for copyright infringement on pirated sites. 

This dirty secret is hardly unknown within the industry: Most advertisers, big and small, engage in it. But the general public has been relatively in the dark. The USC report is intended to let the public know what's really going on, on a planned monthly publishing basis.

"A lot of major brands are advertising on these pirate sites," says Jonathan Taplin, the director of the USC Annenberg Innovation Lab, and the man behind the project. The irony is most aren't even aware of it, he says. Still, he thinks this trend can be changed.

Taplin says that when he notified Levi's, a partner of the Innovation Lab, the jeans giant "called their [ad] agency and said: 'Take our stuff off these pirate sites.' And within two weeks, we could see a change completely. So I know it's possible."

Fighting Piracy 

Taplin, who previously spent time as a film producer and music manager, was drawn to this research after watching the late Levon Helm, a close friend and drummer for The Band, lose much-needed royalty income due to peer-to-peer sharing sites like LimeWire. Saddled with heavy medical bills and a mortgage, Helm "had to go back on the road with Stage Three throat cancer," Taplin remembers somberly. "Some nights he could maybe sing one song... When he died last year, a bunch of musicians got together, threw a benefit for him at Madison Square Garden in order to pay off the mortgage on his house so his wife wouldn't get thrown out on the street."  

Taplin didn't believe legislation like SOPA and PIPA would solve these copyright problems, and decided to investigate the online ad world. He found a fragmented, poorly understood business full of middle men and companies in the dark about where their ads were actually being placed, and what he considers parasites on the creative community raking in the loot.

"The ad networks are a pretty Wild West kind of world," he says. "I don't think that the brands know where their ads are going. There's no real accounting or auditing how this works."

The main problem is that most brands pay third-party ad networks to make ad buys and get them eyeballs. Most aren't aware where those viewers come from. As long as the targeted number is hit, that seems to be all that matters.  

"What happens is a brand comes to an ad agency and says we want 5 million impressions on the Internet with a demographic profile of males 18-26, because we're selling auto insurance," Taplin says. "So the agency then farms it out to an ad network. The ad network goes out and gets those impressions, but it could be that the easy way is to get a lot of impressions on the cheap inventory on pirate sites, where, needless to say, there are probably a lot of males 18-26 hanging out."

Taplin characterizes the industry as see-no-evil, hear-no-evil. "In some ways it may be that the brands or the agencies don't really want to know where this stuff is ending up," he says. "Google can assure someone that your ad is not going to end up on a porn site, so there's probably no reason it couldn't assure you that your ad is not going to end up on one of the top 800 sites that are on the Google Transparency Report."

See No Evil

Cameron Yuill, the founder & chief executive of AdGent Digital, says there are two very different kinds of advertising: branded content, and direct response, and he blames the direct response advertisers. "A lot of the direct response guys don't care where their ad appears... they just want to get a response."

Is that an ethics problem? "I would say absolutely," Yuill says. "It's been part of the industry since day one, right? Trying to get people to click on an ad." 

The online ecosystem's easy self-service culture has resulted in many companies not knowing who they're doing business with, says Jules Polonetsky, director and co-chair of the Future of Privacy Forum, and the former chief privacy officer and special counsel at DoubleClick (before it was acquired by Google).

"The next thing you know a Fortune 500 advertiser is in business with some unknown blogger or some pirate site," Polonetsky explains. "Clearly there are steps that companies can take in an automated way, but it's a challenge. Most certainly have policies against it, the question is how good can your automated systems be to prevent it, or are you intentionally casting a blind eye?"

Going Forward

Taplin's goal is to publish these reports monthly to raise awareness in the industry.

Right now his report details the top 10 ad networks with the most DMCA takedown requests. "Eventually we'll have the top 20 ad networks, and maybe the top 10 of brands on these sites," he says. "My hope is that it would begin to lead the industry to a code of best practices so they're not going to do this anymore. I think the brands that want to be associated with music and film understand that they can't on one hand sponsor a tour for rock and roll band, and the other hand be putting a lot of money into pirate sites...or a torrent site that has all of those movies for free."

 

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