More than 50 government and corporate advertisers have been spotted advertising on pirate websites, according to a reportÃ'Â released Thursday by the Annenberg Innovation Lab at the University of Southern California.
Among the organizations identified by the lab, which started issuing the monthly advertising transparency reports in January, are the U.S. Army, National Guard, Microsoft Bing and Windows 8, Allstate, American Express, AT&T, Chevrolet, Ford, Honda, Neiman Marcus and Walmart.
Because of the knotty nature of the Internet advertising placement, it's very likely that the organizations don't even know their ads are appearing on sites that cater to content violating the federal Digital Millenium Copyright Act (DMCA).
[See also: Privacy, Piracy and Parental Controls: Where In the World Are We Going in 2012 And Beyond?]
"Due to the convoluted natures of the advertising marketplace and the on-demand bidding process, brands which do not support illicit file-sharing can come to have adverts placed on non-DMCA compliant websites, providing an in-direct form of subsidy," the report said.
Since the United States has made strong efforts to fight online piracy of intellectual property, the appearance of U.S. military ads on content-thieving sites could be embarrassing.
The ads are delivered to the ad networks by the Ad Council. While they cost money to produce, their placement is free, as a public service.
"I think it's mostly the fault of the Ad Council," Jonathan Taplin, a professor at the Annenberg School and team leader of the transparency project, said in an interview. "I don't think there's someone at the Pentagon saying, 'Let's put our ads up on pirate sites,' although there are a lot of young males in the 21 to 25 age range that are using these sites.
"I think it's inadvertent because the Ad Council isn't paying any attention," he added. "We've seen the Ad Council place ads for the U.S. Forest Service on these sites as well."
The Ad Council declined to comment on the Annenberg report, but noted in an email, "The Ad Council does not spend Federal government or [Non-Government Organization's] funds on non-DMCA compliant websites.
"When the Ad Council distributes our campaign [Public Service Announcements] to advertising networks and advertising exchanges, we expressly request that the network/exchange restricts placement of our ads on illegal sites (including illicit file-sharing sites) and sites within certain categories including gambling, pornography, et al," it continued.
"When Ad Council PSAs are discovered on non-DMCA compliant websites, the Ad Council requests that the advertising networks remove our ads immediately," it added.
Taplin explained that one of the reasons for launching the advertising transparency project was to open up the Byzantine Net ad market. "We're trying to bring some transparency to a business that's very untransparent," he said.
"The online ad business is what we would call a 'dark market,'" he continued. "You don't really know who's buying what, where the ads are coming from, where they're going, how they're accounted for, whether people are spoofing them or pretending to click on ads so your site will get more money.
"There's a lot of fraud in the business," he added.
The top 10 advertising networks on illicit sites identified in the report were Propellerads, Exoclick, Infolinks, Adcash, Admxr, Adsrevenue, Yahoo/Right Media, Adserver, Trix.net and Sumotorrent.
"Given that many advertising networks have a ban on illicit file-sharing written into their terms of use, this report should serve as a mechanism to highlight possible violations among clients," the report said.
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