April 2, 2019

Follow the Money - How Disinformation Has Become a Big Business

Much has been written about disinformation for political ends, whether by foreign states interfering in elections or domestic actors trying to sway social or political discourse in their own country. Far less has been written about disinformation created purely to make money – financially motivated disinformation. At the Global Disinformation Index we believe that focusing on the financial incentives can significantly disrupt the creation and distribution of all types of disinformation. This blog post lays out why we have chosen to “follow the money” that is funding disinformation.

The financial incentives for disinformation is most often (but by no means only) online advertising. The automatic placement of adverts on websites means many brands simply don’t know that they are buying ad space on domains that disinform. A 2017 study suggests that adverts for over 600 major brands were found on questionable domains linked to disinformation. Another study saw that major ad or content recommendation networks such as Revcontent, Google Display Network and Content.ad were connected with placing ad content - including from brands such as The Gap - on numerous websites peddling disinformation.

To substantially reduce disinformation, we have to reduce the funding stream that the advertising industry has inadvertently provided to domains that disinform. And to do that we have to understand the ad tech ecosystem that allows it to thrive.

A series of shifts have created an ad tech ecosystem which malicious actors can abuse. GDI sees four major trends in the last few years that have fed the problem:

Trend 1: Online media sources explode.

Media content creation is no longer centralised. Hundreds of hours of new content are uploaded to YouTube every minute. Every second, an average of 6,000 Tweets go out. With all this content, many more people now turn to platforms- rather than news publishers - to get their news. Yet more content does not mean better content or more informed readers. Fiction is drowning out facts online. One study showed that 126,000 rumors which were spread on Twitter between 2006 and 2017 reached more people than the related true stories.

Trend 2: Advertising money floods the online space.

The graph below shows a huge increase in online advertising since the early 2000s (Figure 1). Projected figures show two-thirds of the expected growth in global advertising between now and 2020 will come from online spends (paid search and social media ads).

Figure 1: Evolution of Ad Spend, 2000-2020

Source: https://www.recode.net/2018/3/26/17163852/online-internet-advertisers-outspend-tv-ads-advertisers-social-video-mobile-40-billion-2018.

Trend 3: An opaque ad tech ecosystem capitalises on the gold rush.

A whole universe of ad tech companies have arisen to service this demand from advertisers: from demanding and supplying headline banner space on pages, to serving as exchanges to connect these buyers and sellers - while collecting, aggregating, packaging and selling all of the relevant data in between. In the last seven years, the number of ad tech companies has grown five-fold. The graphic below (Figure 2), known in the industry as the LumaScape shows the ecosystem for display advertising.

Figure 2: The Lumascape of AdTech Players

Source: https://lumapartners.com/content/lumascapes/display-ad-tech-lumascape/

As with all gold rushes, fraud has run rampant in the ad tech ecosystem. Fraud can take the form of ads placed on websites visited only by bots, or ads not shown at all or only shown below the "fold" of the page. By 2025, the World Federation of Advertisers expects ad fraud to cause US$50 billion in losses annually.

Trend 4: Microtargeting and programmatic ads have become more precise and scalable while taking humans out of the decision process.

With the online ad spend booming, there has been a rise in the automatic placement of ads, or “programmatic” ad networks, where ads are placed automatically in real-time based on an auction. This "header bidding" happens every time you load a website and involves numerous exchanges and hundreds of "demand-side" platforms.

More content but much less money for the good stuff

All of this has meant that over the last few years the proportion of an ad spend reaching the end publisher has been reduced as the growing number of intermediaries in the ad tech system have taken a cut: Demand Side Platforms (DSPs) Data Management Platforms (DMPs), Supply Side Platforms (SSPs), exchanges, and others. And with the advent of disinformation, this small trickle at the end of the pipe is now split further between quality and junk news sites - meaning even more challenging times for news outlets (see Figure 3).


This crowded and opaque ad tech ecosystem has created opportunities for fraud and provided funding to disinformation merchants. The result is that there has been - and will continue to be - a sharp drop in revenue to quality news publishers. So not only has the increase in disinformation overwhelmed the spread of high quality information, it has also made quality journalism less financially viable.

Turning off the money tap to disinformation is critical not only to reduce the volume of disinformation but also to redirect money back to higher quality news domains. It will further help the ad tech ecosystem protect itself against the sort of abuses that have allowed disinformation to thrive.

Towards a solution - The Global Disinformation Index

GDI wants to restore trust in what we read online by driving out abuses of the ad tech industry. Our index will do this by assessing and labeling domains on their risk of disinforming and providing a real-time feed of this data into the ad exchanges, the places where ad placement decisions are made. This will allow exchanges to divert advertising money away from disinforming domains and back to quality ones. It will give advertisers the option to select low risk domains when they set out their ad spend criteria. This direct intervention in the ad tech ecosystem should reduce the financial incentive to create disinformation in the first place, and redirect ad dollars back to high quality domains.

Look for our forthcoming paper, where we will lay out our approach for achieving this change.