Big brands risk credibility crisis as more ad campaigns find way onto Asian sites that deal in pirated movies and music

The advertising campaigns of big brands are appearing on Asian websites that provide pirated movies and music, putting companies’ reputations at risk and exposing them to online criminal networks, according to a recent study.

Experts lay the blame on the complex, automated online advertising networks that efficiently package and distribute such campaigns but give advertisers little to no control over which websites they land on.

A study by Paul Watters, a professor of information technology at Massey University in New Zealand, found that certain networks place mainstream ads on Asia’s top piracy sites, which also run marketing campaigns for pornography, malware and illegal gambling.

“I am shocked sometimes by what I observe online,” Watters said.

His research covered 9,000 webpages of 90 known piracy sites from nine Asian markets including Hong Kong. The study showed more than 1,600 ads from legitimate businesses were placed on those sites.

A campaign by US food company Quaker Oats, a subsidiary of PepsiCo, was found to have been placed on a Chinese website providing free movies and shows to download, while advertising from luxury fashion house Saint Laurent Paris was on a site for pirated movies.

Duncan Trigg, the vice-president for advertising effectiveness at US marketing analytics firm comScore, said such advertising “made illegal websites look legitimised”, while damaging the reputation of the affected mainstream brands.

According to eMarketer, spending on digital advertising is forecast to reach US$170.17 billion this year, up 18 per cent. It is expected to account for 29.9 per cent of the estimated US$569.65 billion total global advertising market.

Watters looked at the code underpinning some mainstream ads that appear online to determine which network they came from.

His study found that a number of big advertising networks were involved, including those run by internet search giant Google as well as privately held programmatic advertising technology company OpenX.

Watters said the online advertising networks can control the sites on which legitimate advertising campaigns ultimately get placed.

“They have to eyeball it sometimes,” he said.

“Given the attention to this issue in other parts of the world, we have been surprised to find major Asian advertising networks continuing to place ads on rogue sites,” he said.

“It seems to be a much bigger problem in Asia.”

The US and countries in western Europe have taken action to fight the problem.

Last year, London’s police force started replacing ads on copyright-infringing websites with official force banners, warning the user that the site was under criminal investigation.

It also established a blacklist of illegal sites to inform online advertising agencies where not to place their campaigns.

“Advertising networks buy billion of impressions, pack them up, enrich them and sell them,” said comScore’s Trigg.

Ads on fraudulent sites can also harm their business, so “the whole industry is keen to sort it out,” he said.

Many piracy websites use so-called domain hijacking to feign legitimacy and dupe people into visiting them, according to Trigg.

Many automated online advertising networks and exchanges have also been hoodwinked.

Trigg said most agencies deal with the issue by using sophisticated verification tools that can track an ad’s movement including its final destination.

John Medeiros, chief policy officer at the Cable and Satellite Broadcasting Association of Asia, said the problem has become more widespread on native-language websites in the region.

“Asian governments now have to face this problem,” Medeiros said.

Google claims to have adopted a leading role in tackling the problem, following a much-publicised report in 2013.

A report released by the University of Southern California (USC) in January of that year accused Google, Yahoo, OpenX and other online advertising networks of supporting copyright-infringing piracy sites with advertising revenue.

Google, which had suggested the methodology of that research was flawed, has made certain improvements that removed it from the later editions of that USC ranking.