According to The Times, ads for Jaguar's F-Pace SUV and Mercedes's E Class saloon were served on a pro-Islamic State video on YouTube that was viewed more than 115,000 times.
Sandals Resorts and Marie Curie, the well-known charity, were also reported to have unwittingly seen their ads appear on extremist websites, which The Times said could generate tens of thousands of pounds for extremists.
The newspaper said the companies were deeply concerned about their presence on these sites with some blaming flaws in programmatic advertising for the placement of these online ads.
"Jaguar Land Rover is very concerned by reports that advertising featuring our brands may benefit extremist and other inappropriate online media," a spokesman said. "This is an unintended consequence of algorithm technology used on some video-sharing websites."
Meanwhile, Marie Curie told Marketing Week: "We are grateful to the Times for bringing this to our attention. Immediate action was taken to remove our ad from the offending site. We are extremely concerned that our advertising appeared in this way. We are taking steps necessary to ensure this does not happen again."
The problem, according to some industry experts, is that brands should stop regarding programmatic at a way to cut costs and instead focus on safety by using verified agencies and ad tech providers.
Richard Foan, Chairman of industry body JICWEBS, which seeks to maintain high web standards in the UK and Ireland, warned that the industry has a collective responsibility to try to reduce the risk.
"Would you buy a car without an MOT? No. The same applies for who you buy your digital ads through, so the JICWEBS Board advise advertisers to check whether potential ad trading partners have achieved this certification," he told Marketing Week.
Steve Chester, Director of Data & Industry Programmes at the IAB UK, agreed that brands need to take more care about their digital media placements.
"With so many options must come caution, and we encourage brands to ask the right questions and get the right information to help make the right decisions," he said.
"We at the IAB want brands to be confident about their media buy up front, and are working with the industry to continue progress in this area to create the right environment for digital advertising to thrive."
Data sourced from The Times, Marketing Week; additional content by Warc staff