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Ad Spend on Piracy Sites Hits $227 Million in 2013

Written on
Feb 19, 2014 
Author
Richard L. Tso  |

ADOTAS – Remember Napster and the rise of rudimentary peer-to-peer file sharing technologies that allowed people to easily share music and movies across a distributed network? Made popular by university campuses and computer clusters around the country in the late 1990s, piracy has been around for decades, and yet these technologies have given way to the more powerful BitTorrent sites that are much more difficult for authorities to track since only bits and pieces of files exist on any one computer.

While file transfer technologies have finally hit the mainstream, enterprise-grade services like Akamai helping to power legit digital sales through iTunes and Amazon.com. Yet the black market underbelly of unlawful file sharing has cannibalized revenues from movie studies and record labels, turning piracy into a major concern that should be addressed head-on in the digital age.

And advertisers looking to cash-in on the short attention spans of online audiences, are following the flow of traffic.

According to a new report by the Digital Citizens Alliance (DCA), a nonprofit that conducts research around Internet safety, piracy sites mean big business raking in $227 million worth of advertising in 2013. The issues with Internet piracy are twofold: It’s not only a threat to content creators who work long hours to develop their stolen software, movies and music, but also to the advertisers who align their brands with these questionable publisher sites that enable the illegal transfer of stolen content.

“These premium ads are on sites that are stealing content, which gives the content the incentive to keep going, and at same time, it damages the credibility of the brands,” said Tom Galvin, executive director of the DCA.

When creating this study, the DCA enlisted help from media advisory firm MediaLink to examine 596 ad-supported publisher sites, identified from online requests to remove stolen digital content. Sites for this study include torrent-based site The Pirate Bay and video streaming host site AlbaFile. The research team calculated ad spend by examining the number of ad positions on the sites and audience size, assuming a straight-forward CMP model.

The study uncovered that several premium brands like AT&T, Lego and Toyota were among those advertising on these sites. In an interview with AdWeek, Galvin admitted that sometimes these ad placements happen without advertisers and agencies even knowing it, adding that advertisers are often the victims of a broken system.

“This is a serious problem, regardless [of the methodology],” said Eric Franchi, co-founder of ad network Undertone and also an Interactive Advertising Bureau (IAB) board member. “The past 10 or so years, exchanges and networks have proliferated. The brands don’t know how it can happen, and agencies need to make sure they’re protecting their brands as well. And with the growth of audience buying, that naturally opens up buys to exchanges.”





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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