Movie and music piracy thrives online in part because crafty website operators receive advertising dollars from major companies like Comcast, Ford and McDonald's.
That's the conclusion of several recent reports that shed light on Internet piracy's funding sources.
Content thieves attract visitors with the promise of free downloads and streams of the latest hit movies, TV shows and songs. Then they profit by pulling in advertising from around the Internet, often concealing their illicit activities so advertising brands remain unaware.
Pirate websites run ads that are sometimes covered up by other graphics. They automatically launch legitimate-looking websites as pop-up windows that advertisers don't realize are associated with piracy. At the end of the day, the pirate website operators still receive a check for serving up a number of views and clicks.
The illicit activity is estimated to generate millions of dollars annually. That's only a small portion of the roughly $40 billion of online ad spending every year. Yet it is helping to feed the creation of millions of copyright-infringing websites that provide stolen content to a growing global audience.
"(Companies) placed their ads on the assumption that they were going to be on high-quality sites and they're not," said Mark Berns, vice president of MediaLink LLC, a consulting firm that produced a study looking into the practice called "Good Money Gone Bad."
The study, commissioned for the Digital Citizen's Alliance, a Washington-based group that advocates for a safer Internet, sampled 596 of the worst-offending websites. Researchers discovered that the infringing websites were displaying ads from 89 premium brands like Walmart, McDonald's, Google, Microsoft and Ford.
"It's certainly fair to say that millions of dollars in revenue from premium brand ads are supporting content theft sites," Berns said.
That's similar to an estimate from DoubleVerify, an online fraud protection company. According to a DoubleVerify report released last May, rogue website operators cheat mainstream advertisers out of $6.8 million each month, mainly by "laundering" ad traffic in ways that are hard to detect.
"There's growing awareness of the unscrupulous tactics that sites will go to to collect their dollars," said DoubleVerify chief operating officer Matt McLaughlin.
Several advertisers and top technology firms that operate ad networks -- like Google and Microsoft -- say the fraud is difficult to stop. Ads for Google's Chromecast streaming device and Microsoft's Bing search engine were among those that appeared on pirate websites.
Microsoft said in a statement that while it monitors where its ads end up, it sometimes relies on others bringing infractions to its attention "to take actions on non-compliant sites." (continued...)
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