Cashing in on clicks: It pays to place ads on pirated websites

Written by New York Times | Los Angeles | Updated: Jan 30 2013, 08:55am hrs
Over the years, the fight against online piracy has led to countless lawsuits by media companies and to escalating levels of law enforcement, all with mixed results.

Lately, though, new attention has turned to an aspect of online commerce that critics say finances online piracy: advertising. Prodding from the White House and a recent academic report have put pressure on the online advertising industry to prevent ads for jeans, say, or car insurance from appearing on a page offering a free download of Season 2 of Game of Thrones. Yet these efforts have also been slow to produce results, in part because of the complexity of the online ad system.This month, the University of Southern Californias Annenberg Innovation Lab released a report that ranked 10 ad networks on the amount of business they do with sites suspected of engaging in piracy, with Google and Yahoo placing high on the list. Ad networks use advanced computer algorithms to place ads on Web sites.

They can be run by agencies, publishers or others. The implicit criticism of the report is that the operators of these networks know which sites traffic in copyright infringement and therefore could keep ads and ad money away from them if they wanted to. Brands make sure that their ads never show up on porn sites, so were basically saying, why not do the same with piracy sites said Jonathan Taplin, the director of the Innovation Lab, which is part of USCs Annenberg School for Communication and Journalism. But some of the ad networks cited by the report have disputed its methodology and meaning. And even its supporters complain that the online ad system a chain of Web sites, ad servers, digital publishers and agency trading desks that buy and sell ads at a rapid pace operates in a way that makes it difficult to know where to point the finger. The researchers studied the fragments of computer code that were appended to the ads they found on sites suspected of piracy over a year. The sites were drawn from a report by Google listing sites that had received the most complaints from copyright holders.

Representatives of Google and OpenX, two of the largest companies on USCs list, did not deny the prevalence of their codes. But they disputed its meaning, saying that their technology is widely used by third parties like ad agency trading desks and advertisers so the presence of their code did not necessarily implicate them in a transaction.

To grossly overcalculate our network, youre also grossly overcalculating how many of these sites we are funding, said Andrea Faville, a Google spokeswoman. Mitch Stoltz, a staff lawyer at the Electronic Frontier Foundation, was more aggressive, calling the USC report a little bit of analysis resting on false premises.

Advertising agencies, including OMD, a digital agency part of the Omnicom Media Group, one of the largest agencies in the world, said they were examining the report, but so far little significant action has been taken.

Stephen Kline, the senior counsel for privacy and regulatory matters at the Omnicom Media Group, described the challenge for brands and agencies to identify piracy sites that appear as quickly as they disappear as a little bit of Whac-a-Mole.

As Taplin of the Innovation Lab sees it, Google has effectively provided a blacklist with its Transparency Report, which lists the sites that have received the most takedown requests from copyright owners. But these are only requests, not proof of illegal behavior.

The next edition of the USC report is due in mid-February. Taplin said it would name brands that advertise on pirate sites. In an interview, he said he was not ready to identify those brands, but he noted that insurance companies were among the biggest offenders. Taplin said the report had not been done for any media company or organization, but, as a veteran of the music and film industries, he also made no secret of his sympathies with Big Content.

He told the story of his friend Levon Helm of the Band, who died last year. (Mr. Taplin was a producer of the bands 1978 concert film, The Last Waltz.) Mr. Helm, he said, had to tour, despite having cancer, to make up for money he lost from royalties, in part because of piracy.

That didnt seem fair to me.