Two thirds of advertisers unknowingly place ads on misinformation websites, according to a comprehensive university study into the billions of dollars wasted by brands.
The research analysed data from more than nine million ads, from 42,595 advertisers, placed across 5,400 websites between 2019 and 2021.
Major brands risk a consumer backlash because they are unaware which websites get their advertising.
The study found those brands and agencies using programmatic platforms are at a high risk of inadvertently financing misinformation
Researchers at Stanford and Carnegie Mellon universities analysed the supply of misinformation, how falsehoods are monetised, what role advertisers and adtech companies pla and how consumers react.
The study used data from NewsGuard, a news rating tool, to identify misinformation sites.
Most consumers think that when they see an ad on a website, it’s supposed to be there.
But brands and their media agencies don’t know where all of their ads are being placed.
The latest study’s findings align with previous research conducted by NewsGuard and Comscore that found brands unintentionally send more than $US2.6 billion in advertising revenue to misinformation publishers each year.
The implications for consumer trust and brand integrity are obvious.
“As consumers become more aware of misinformation and its sources, brands associated with such content may suffer a decline in demand for their products and services,” said Stanford researcher Wajeeha Ahmad, who led the latest study.
“We find that consumers switch away from using companies whose ads appear on misinformation outlets.
“This switching effect persists even when consumers are informed about the role played by digital ad platforms in placing companies’ ads on misinformation websites and the role played by other advertising companies in financing misinformation.”
The researchers found that 74.5% of websites identified as sources of misinformation were financially sustained by advertising.
“This heavy reliance on advertising underlines the importance of scrutinising where ad dollars are being spent,” said Newsguard.
“One of the study’s most striking findings is that major brands from a wide range of industries — spanning household products, technology, finance, health, and education — regularly advertise on websites that spread misinformation.”
The research shows 46% of brands in each industry had instances of their ads appearing on misinformation sites, with the proportion as high as 82% of brands for some industries.
Across industries, the average rate of brands advertising on misinformation sites was 67%.
The study found that among the 100 most active advertisers, 55% had their ads appear on misinformation websites. In many industries, brands placed ads on unreliable sites with the same frequency as on reliable websites.
“This study provides unprecedented data confirming the shocking likelihood of so many brands—two thirds of advertisers—unintentionally supporting misinformation,” said NewsGuard Co-CEO Steven Brill.
“This study for the first time also reports how the programmatic advertising industry is so non-transparent that even senior executives at companies are often unaware that they’re part of the problem, with two thirds of companies funding misinformation but only one fifth of executives thinking their company has the problem.”
The analysis also highlights the role digital advertising platforms play.
When brands and their agencies used these platforms, with Google’s ad platform being the most widely used, they were found to be about ten times more likely to appear on misinformation websites.
This reliance on automated ad placements with little human oversight explains much of the inadvertent funding of misinformation, despite potential consumer backlash and brand reputation risks.
At the same time, overall trust in news is falling.
The latest Digital News Report: Australia, by the University of Canberra’s News and Media Research Centre, shows trust in news down 3 percentage points to 40% but remains within the long-term trend, hovering in the low 40s.
However, distrust is at its highest point since 2016 at 33%, up 8 percentage points.
“This may reflect a growing scepticism with the news where some people are reluctant to trust it, but will continue to consume it, or even increase their consumption as they seek verification from other news sources,” says the study.
“For others, it may reflect a growing cynicism towards news which can lead to disengagement.
“The data also reflect the increasing gender gap in news consumption and attitudes in Australia. Trust has fallen hardest among women who consume less news. Women are less concerned about misinformation than men and are less confident they can identify it.”
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