WASHINGTON DC: Illicit websites run by online pirates raked in an estimated $111m from digital advertisers in the US last year, but the problem could have been far worse if the industry had not put effective quality control measures in place.
That is the key message in a new study from the Trustworthy Accountability Group (TAG), the organisation tasked by the ad industry with the job of combating malware and preventing online fraud.
According to TAG, anti-piracy steps taken by the digital advertising industry have reduced ad revenue on pirate sites by between 48% and 61% – or between $102m and $177bn – depending on the breakdown between premium and non-premium advertisers, such as gaming and dating services.
Ernst & Young, the professional services firm, was commissioned to carry out research into the scale of the problem and found that premium advertisers lost $36m to infringed media last year while non-premium advertisers lost $75m.
It reached this conclusion after examining ads that ran on 672 sites from mid-November to mid-December 2016 and noted that non-premium advertisers accounted for 83% of the impressions observed, while 17% were premium ads.
“If the industry were taking no quality control steps and digital piracy operators served only premium advertisers, we estimate that those operators could earn $213m annually from digital ads,” the Ernst & Young researchers said.
“In actuality, they earned an estimated $111m from those ads in 2016. The difference of $102m is a strong indication that quality control efforts are having a significant effect,” they added.
Welcoming the findings, TAG CEO Mike Zaneis said: “We have not won the war against ad-supported piracy, but the battle is joined, and we are making good progress.”
“The collaborative efforts of hundreds of companies using TAG-validated providers of anti-piracy tools is cutting off the revenue for the criminals who profit from stolen content and reducing their incentive to distribute it.”
“Despite the advances made, there is more work to be done, as companies work together to protect their brands against the interrelated challenges of ad-supported piracy, fraud, malware, and lack of transparency.”
Sourced from TAG, EY; additional content by WARC staff