Interviews, insight & analysis on digital media & marketing

Fines for advertisers – the latest wake-up call for those who casually support online piracy

By Peter Szyszko, Founder and CEO, White Bullet

The reputational risks of advertising on pirate sites are, by now, increasingly well known to brands and their agencies. But now there is an additional threat, as advertisers wake up to discover that, as well as the poor ad performance and brand damage that comes from advertising around high-risk content, they may also be liable for losses incurred as a result of copyright infringement.

In Japan just before Christmas, two advertising agencies were ordered to pay 11 million yen (£70,740) to Ken Akamatsu, a manga artist whose work was illegally posted on Mangamura, a Japanese-language pirate manga site that was shut down in 2018. Just as the pirate site was infringing copyright, the judge ruled, the agencies assisted this infringement by buying its advertising.

Follow the money

The liability issue further ups the ante in the fight against pirate sites that attract and profit from legitimate advertising – a criminal business that has grown to titanic proportions. By funding these illegal sites through their advertising, we estimate that brands and agencies are helping these operators generate over £1 billion annually in global advertising revenue. 

As the ruling indicates, all sides of the digital advertising industry must recognise their responsibility and play their role in stemming the flow of money to these sites. Regulation and enforcement are of course also important, but when changing a domain name or redirecting a site is the work of seconds, it is clear that more needs to be done. And it is ever more apparent that the strongest course of action is to starve the pirates of ad revenue: cut this off, and you disable the site.

Brands can play a crucial part in achieving this by actively choosing to avoid pirate sites and tasking their vendors with ensuring this happens. But it shouldn’t just fall to brand pressure to force the issue. Ad tech companies need to play a proactive role by ensuring that their platforms automatically block any advertising that’s being misdirected to illegal sites, without advertisers even requesting it. Not only will this be more efficient, but it will help tackle the issue quicker. 

Taking action is getting easier

And it’s not hard to do. Committing to investing in anti-piracy practices and leveraging technologies from companies like ourselves or Silverbullet means pirate sites can be quickly identified, advertisers informed and content demonetised in real time. With so much talk in the industry around trust, transparency and doing what’s right and moral, there’s no excuse for this not to be happening.

At a time when consumer trust in advertising and programmatic is low, this must be a priority. After all, when a consumer sees a household name advertising on a site showing stolen, IP-infringing content, it has a legitimising effect, blurring the lines between legal and illegal channels, while suggesting a degree of endorsement on the part of advertisers. 

The tide is turning

But the action being taken is having an impact. We’ve seen a coming together of organisations with a stake in combating piracy in advertising, including TAG, the police, the European Commission and the European Intellectual Property Office, to engage with the ad industry. And these outreach efforts are making a difference.

Last year, outside the UK, more than 5,000 brands stopped advertising on pirate sites in response to this outreach, combined with increased blocking by agencies and ad tech companies. This kept $60 million in ad spend from flowing into pirates’ pockets. The UK has become a hub in the battle to protect IP online, the actions of law enforcement, industry and legal and technology specialists blocking three times as much revenue in this one market alone.

And there’s growing confidence that we’re beginning to make a difference. At the end of last year, I sat on a panel with speakers from the Intellectual Property Office, Sky Bet, NBC Universal, the Trustworthy Accountability Group (TAG) to discuss ad-funded piracy, and found unanimous agreement that we are winning the war against ad-funded piracy. Yes, there’s still more to do, but we’re moving in the right direction.

While there’s no time for complacency, we’re seeing that with effort, commitment, technology and a collective will, pirate sites can be eliminated by cutting off the ad revenues funding them. Achieving this needs all sides of the industry – and beyond – to accept their responsibility and understand what they can do individually to combat ad-funded piracy. By using the technology available, implementing effective safeguards, adopting best practices and supporting industry initiatives, we can disrupt and ultimately stamp out this criminal activity for the benefit of the whole industry, consumers and society.