Intellectual piracy is getting lots of attention in Congress - and that attention is long overdue.
Copyright and trademark infringement online costs our economy over $100 billion, according to some estimates. And, Judiciary Committee Chairman Patrick Leahy, a Vermont Democrat, contends those losses are "devastating in our current economic climate."
A major culprit: websites that promote the illegal distribution of movies, music, software, and other intellectual property. Through my work with my clients, I have found numerous advertising networks allowing these sites into their networks and de facto supporting these illegal websites.
Intellectual piracy not only hurts large companies like Microsoft and BMGI - many small businesses and musicians suffer too when their intellectual property is distributed across these platforms. For every major music hit or successful software release, there are hundreds of musicians and software developers who are just "getting by" being supported by their sales.
Many of those people work in our industry, selling ad technology products, and their advertisements can be on pirate websites. Let's also not forget that it's illegal, and the Departments of Justice and Homeland Security shut down these websites and prosecute their owners. This is criminal activity.
Most major networks do not permit file-sharing sites, otherwise known as "torrent" or "warez" sites, into their network. When I asked Jarvis Coffin of Burst Media and Julia Casale of Casale Media if they allow these types of sites in their network, they both made it clear that it is completely against their policy - as did the heads of several other major networks. As much as that may be the case, there are still at least a dozen networks actively involved in placing advertisements on illegal websites and thus sending checks to criminals.
As much as I would like to reveal the companies engaged in this type of behavior, it's better for me in this forum to address what I've found in general. While some networks are offshore companies with no presence in the United States, I have found divisions of major corporations engaged in this behavior. The response to many of these companies has been that they "do not sell the inventory to any brand or client that is not sensitive, but have clients who do not mind." They completely miss the point that they are supporting criminal activity by placing advertisements on those websites and directly making money from that illegal activity.
What's worse is that many of these networks are members of exchanges. And the people managing those exchanges have done nothing, even when presented with the evidence, to remove those companies from the exchange. I've spoken to the CEOs and heads of some of the exchanges, one in particular, and the response I received was very similar and was basically, "Those networks mark those sites as warez/torrents" and it's not our job to police them. They felt that as long as the company was being honest about identifying the illegal activity, they were following the rules. Of course, these exchanges also are benefiting financially through serving costs of those banners. I also personally highly doubt that all the networks are honest about their role, having found many brand advertisements over the years on questionable websites such as these.
What is the purpose of me bringing this up? To raise awareness and perhaps ask publicly that those involved in this industry become better corporate citizens. If you are running one of those exchanges or networks and feel that it's only a "transparency" issue, please consider that you are funding not only these websites but organized criminal organizations that run them. This is not a victimless crime, but instead one that is affecting musicians, programmers, artists, designers - and businesses of all sizes.
As an industry, here are some suggestions of what we can do:
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Pace Lattin has been working in interactive advertising since its inception. From being a co-owner of the company that sold advertising in ClickZ before the turn of the century to founding a major interactive advertising publication, he has been involved with all aspects of the interactive advertising industry. He is currently the executive director of the Executive Council of Performance Marketing, an industry organization that represents over 100 C-level executives.
March 19, 2014