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10 February 2017

The hidden reputational cost of inadvertent terror funding

Alistair King

Yesterday The Times reported that some of the world's biggest brands are "unwittingly funding Islamic extremists, white supremacists and pornographers by advertising on their websites".

The claim carries weight and is explained by the activity of certain big advertising agencies that place adverts on behalf of their clients. A number of the "programmatic advertising" systems they use rely on complex but suspect algorithms that allow digital adverts to be bought in the milliseconds a webpage takes to load. But the pages on which the adverts are served up aren't properly vetted by the software.

Even when dubious content isn't involved, agencies face criticism for the practice, standing accused of pushing brands into this online advertising to boost their own profits, with companies concerned that they're paying huge mark-ups for digital promotion and receiving "crappy advertising" in return. Adding extremist content into the mix only makes things worse.

Nefarious groups are earning significant money from it, albeit in very small chunks from each individual unwitting advertiser; your advert appearing next to a YouTube video, for example, typically earns whoever published it $7.60 for every 1,000 views, according to the article. And what that YouTube video contains could be anything, if it's not caught by Google in time.

We must crack down on the practice, of course. And there's clearly an argument for fining anyone who breaks the law, regardless of their intentions, particularly if they fail to act when alerted to the problem.

But perhaps the biggest cost goes unreported in the paper: that of the risk of damaging these brands' reputations.

While less easily measurable, it's no less real and could seriously harm your bottom line; bear in mind that only a minority of internet users will be savvy enough to join the dots and realise that financial support for, and apparent endorsement of, these undesirables is probably accidental.

Even as someone reasonably well acquainted with how the internet works, I'd still double-take if my attention was drawn to an advert from one of my favourite brands appearing next to something created by the supporters of terrorist groups.

Memes spread and mud sticks.

So what can marketers and their compliance colleagues do?

Well, there's no quick fix but given that the advertising agencies themselves are the crucial link, it's worth checking them out before working with them. One way to do that is through the new RepRisk module on our Orbis database.

And beware of the third parties you do business with.

We wrote a white paper on this general subject last year: Really getting to know your third parties.

Alistair King

Alistair King, Content Manager

Alistair contributes and edits material for all areas on this blog. With extensive knowledge of legal and company information, his specialist interests include compliance and corporate ownership.

Alistair contributes and edits material for all areas on this blog. With extensive knowledge of legal and company information, his specialist interests include compliance and corporate ownership.

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