One in every five pounds of programmatic ad revenue for publishers lost to incorrect blocking
UK news publishers are losing £167 million each year due to the incorrect flagging of their most-read online content on brand safety grounds, a study by AI ad verification company, CHEQ has revealed.
The military-grade cybersecurity company commissioned a report about the full scale of monetary loss for publishers as a result of “keyword blacklists”, undertaken with the Merrick School of Business at University of Baltimore, using the latest economic analysis, proprietary CHEQ data, and interviews.
The study finds that 80% of ads served to premium publishers are subject to keyword blacklists. These blacklists were designed on brand safety grounds by first-generation ad verification providers, preventing a brand’s advertising from appearing next to news content where certain words appear, particularly toxic content.
However, the study shows that in fact around 40% of global premium media inventory is brand safe—that is neutral or uncontroversial content. Of this safe content, 57% is incorrectly blocked by blacklists failing to understand the nuance of words such as “kill” dead”, “shoot”, and “”injury”. LGBTQ News publishers saw 73% of their inventory being denied ad dollars through the use of industry standard keywords such as “lesbian”, “bisexual” and “same sex”.
The study finds that in the UK, publishers lost £167 million in 2019, equivalent to one in every five pounds of programmatic ad revenue through blocking of safe content, including entertainment, LGBTQ, travel, history and sports stories.
This is based on annual brand spend on online UK digital news in 2019 of £758 million, based on figures from the Advertising Association. The study includes insights from UK publishers suffering from economic losses due to keyword blocking including News UK, publisher of The Times and The Sun, and Hearst UK, publisher of Cosmopolitan and LGBT Publication, PinkNews.
The report also reveals how the UK’s most searched Google stories in 2019 were largely denied ad revenue including online articles about The Rugby World Cup, Game of Thrones, and Avengers.
The report argues that, in addition to direct economic costs, indirect costs of blacklists are also inflicting damage on publishers. These include news outlets being forced to secure sources of revenue in the absence of ad dollars; the prompting of journalists to change their writing to avoid keywords; significant executive time spent mitigating the issue; and societal damage, such as LGBTQ news sites facing closure.
Professor Roberto Cavazos, University of Baltimore, says:
“This is an eye-opening study revealing how the over blocking of advertising next to news corresponds linearly to revenue. In economic terms, this is an example of a negative externality, where actions taken in one part of the economy severely damages a party that did not choose to incur it. Given the large amount of damage caused and the vital place of ad-funded news, the economic impact could turn out to be much bigger if the issue is not addressed.”
CHEQ Founder and CEO, Guy Tytunovich, adds:
“Blacklists are preventing the media industry from monetizing their most premium content, ultimately threatening the future of news. At the same time, brands are being denied them the chance to appear on top news sites which consistently deliver the most engaged online audiences. The industry needs to commit to move away from the decades-old technology of keywords and turn to a more sophisticated and fairer strategy. Regardless of the approach taken, any modern brand safety approach must provide certainty that advertising will not appear next to genuinely toxic content, while ending the costly sacrifice of huge swathes of premium inventory.”
The full report can be found at https://www.cheq.ai/costofblacklists