“Pirate Sites Generate $111 Million In Ad Revenue a Year”

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A new report commissioned by the Trustworthy Accountability Group estimates that the top "pirate sites" generate $111 million in annual ad revenue. However, they say that this figure could have been twice as much without the ad-industry's anti-piracy efforts. While the numbers are certainly impressive, insiders and experts suggest they are way off.

In recent years various copyright holder groups have adopted a “follow-the-money” approach in the hope of cutting off funding to so-called pirate sites.

The Trustworthy Accountability Group (TAG) is one of the organizations that helps to facilitate these efforts. TAG coordinates an advertising-oriented Anti-Piracy Program for the advertising industry and has signed up dozens of large companies across various industries.

Today they released a new report, titled “Measuring Digital Advertising Revenue to Infringing Sites,” which shows the impact of these efforts.

The study, carried out by Ernst and Young, reveals that the top 672 piracy sites still generate plenty of revenue. A whopping $111 million per year, to be precise. But it may have been twice as much without the industry’s interventions.

“Digital ad revenue linked to infringing content was estimated at $111 million last year, the majority of which (83 percent) came from non-premium advertisers,” TAG writes.

“If the industry had not taken aggressive steps to reduce piracy, those pirate site operators would have potentially earned an additional $102-$177 million in advertising revenue, depending on the breakdown of premium and non-premium advertisers.”

Pirate revenue estimates

Taking more than $100 million away from pirate sites is pretty significant, to say the least.

It, therefore, comes as no surprise that the news is paired with positive comments from various industry insiders as well as US Congressman Adam Schiff, who co-chairs the International Creativity and Theft Prevention Caucus.

“The study recently completed by Ernst and Young on behalf of TAG shows that those efforts are bearing fruit, and that voluntary efforts by advertisers and agencies kept well over $100 million out of the pockets of pirate sites last year alone,” Schiff says.

While TAG and their partners pat themselves on the back, those who take a more critical look at the data will realize that their view is rather optimistic. There is absolutely no evidence that TAG’s efforts are responsible for the claimed millions that were kept from pirate sites.

In fact, most of these millions never ended up in the pockets of these websites to begin with.

The $102 million that pirate sites ‘didn’t get’ is simply the difference between premium and non-premium ads. In other words, the extra money these sites would have made if they had 100% premium ads, which is a purely hypothetical situation.

Long before TAG existed pirate sites were banned by a lot of premium advertising networks, including Google AdSense, and mostly serving lower tier ads.

The estimated CPM figures (earnings per 1,000 views) are rather optimistic too. TAG puts these at $2.50 for non-premium ads. We spoke to several site owners who said these were way off. Even pop-unders in premium countries make less than a dollar, we were told.

Site owners are not the only ones that have a much lower estimate. An earlier copyright industry-backed study, published by Digital Citizens Alliance (DCA), put the average CPM of these pirate site ads at $0.30, which is miles away from the $2.50 figure.

In fact, the DCA study also put the premium ads at $0.30, because these often end up as leftover inventory at pirate sites, according to experts.

“Based on MediaLink expertise and research with advertising industry members, the assumption is that where premium ads appear they are delivered programmatically by exchanges to fulfill the dregs of campaigns. As such, rates are assumed to be the same for premium and non-premium ads,” the DCA report noted.

In the TAG report, the estimate for premium ads is a bit higher, $5 per 1000 views. Video ads may be higher, but these only represent a tiny fraction of the total.

While TAG’s efforts will no doubt make a difference, it’s good to keep the caveats above in mind. Their claim that that the ad industry’s anti-piracy efforts have “cut pirate ad revenue in half” is misleading, to say the least.

That doesn’t mean that all numbers released by the organization should be taken with a grain of salt. The TAG membership rates below are 100% accurate.

TAG membership fees

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