Advertising Fuels $1.34 Billion Illegal Piracy Market, Report by Digital Citizens Alliance and White Bullet Finds

Online criminals who offer stolen movies, TV shows, games, and live events through websites and apps are reaping $1.34 billion in annual advertising revenues – including from some of the most iconic global companies, according to new research from the Digital Citizens Alliance and White Bullet.

The report – Breaking (B)ads: How Advertiser-Supported Piracy Helps Fuel a Booming Multi-Billion Dollar Illegal Market – details a year-long investigation into how brands and advertising intermediaries help support the operators of illegal piracy websites and apps through the placement of ads. Amazon, Facebook, and Google are among the most prominent companies found to fund piracy operators, even as these criminals offer risky advertising that exposes consumers to fraud and malware.

The combination of piracy, malware, and fraud poses significant risks to Internet safety. Consumers that say they visit pirate websites and apps are two- to three-times more likely to report an issue with malware than those that don’t visit these illicit websites and apps, according to a new research survey.

“For too long, online piracy has been treated as a nuisance and not the multi-billion dollar industry that baits consumers to expose them to fraud and malware, hurts the reputation of brands and the overall advertising ecosystem, harms creators, and poses new challenges for law enforcement,” said Tom Galvin, executive director of Digital Citizens. “It is time for Fortune 100 companies and the legitimate advertising industry to stop funneling tens of millions of dollars to criminals.”

The research found that ads for Amazon, Facebook, and Google accounted for 73 percent of all major brands advertising that appeared frequently on piracy apps during the year investigation. However, there is a recent significant decline in Amazon ads showing up on piracy websites and apps. This demonstrates that the issue can be addressed when a brand makes it a priority. 

“This report confirms the simple fact that digital advertising funds piracy,” said Peter Szyszko, founder and CEO of White Bullet. “Despite the alarming scale of the problem, today we are fully armed with AI technologies that can both track illegal activity and advance solutions. That underlying data is the evidence needed to drive action and change. We have already stopped millions in ad spend from funding piracy, reducing the profit of Intellectual Property crime, but clearly more has to be done. By connecting rights owners and the advertising industry with real-time data about piracy risk, all parties can take action.”

The report details a lucrative and broad illicit ad-supported piracy industry that also poses malware and fraud risks to consumers, businesses and organizations –  as well as the major brands themselves:

• The top websites that offer stolen content generate $1.08 billion in global annual ad revenue. For the major players, it’s big business: the investigation found that the top five of these websites made an average of $18.3 million in revenue from advertising. Many of these websites are in a constant state of churn, meaning they are changing domains and redirecting to avoid enforcement and bypass advertising blocklists.

• The top apps that offer stolen content generate $259 million in global annual ad revenue. Just as with websites, piracy apps and advertising can be quite lucrative: the top five of these apps made an average of $27.6 million in ad revenue. These apps remain a smaller piece of the piracy pie than websites, but they are growing at a more rapid pace.

• The brands that place the most digital ads overall, which include many of the Fortune 500 companies (“Major Brands”), are among the key revenue sources for pirate operators. Due in large part to the proliferation of advertising on piracy apps, these Major Brands paid pirate operators roughly $100 million in the last year to advertise on their platforms. One in four ads on piracy apps is from well-known companies.

• The risks that piracy websites and apps pose to Internet users, businesses and organizations was reinforced by the research. White Bullet reviewed 664 billion ad impressions and found that  roughly one in three piracy websites and apps have risky advertising that exposes consumers to fraud and malware.

• A follow-up research survey also reveals that recognizable companies face reputational risks with piracy. Two out of five Americans reported that they think less of these companies when they see brand advertising appear on piracy websites and apps, according to a July survey of 2,126 respondents.  The research also found that Internet users reported that brand advertising make pirate websites and apps seem more credible. The survey was conducted 7/28-7/29, 2021.

The full report can be found at: 

https://www.digitalcitizensalliance.org/clientuploads/directory/Reports/Breaking-Bads-Report.pdf

  Digital Citizens Alliance, Peter Szyszko, Tom Galvin, White Bullet