The trend towards ads appearing against pirated video has been fuelled by growth in illicit redistribution of on demand and live streams by pirates often posing as legitimate subscribers to OTT services. It is big business – the nonprofit Internet safety group Digital Citizens Alliance commissioned a survey from MediaLink in 2014 which estimated that 596 sites showing pirated movies and TV shows made $227 million in advertising revenue annually.

Lack of quality may be an even bigger drain on the industry, with Vindicio, a provider of digital video advertising platforms, estimating that it costs $1.2 billion each year. The firm has also found that 56 percent of tracked online video ads are un-viewable, meaning that they were displayed so poorly, or not at all, that they were not noticed. Not surprisingly, Vindicio found that high quality online video ad placements, where the video player is large and well in view, generate much higher completion rates, click-through rates and ultimate actions such as purchase. Vindicio suggested that making “viewability” an essential metric used in trading online video ads based on an objective measure of the overall experience, will help boost the market.

While the quality issue will be resolved over time there is no such guarantee for piracy, which is likely to be an ongoing battle. There the ad dimension is crucial since it plays a major role in funding the activity and also lending legitimacy to infringing web sites when they carry ads from reputable brands. Various initiatives have been launched to counter placement of ads against pirated content, for example by the City of London Police in the UK, which in July 2014 started seeking out display ads on such sites and replacing them with banners advising visitors to exit that page. Such sites are identified by the rights holders whose content has been pirated and which then provide evidence of the copyright infringement to PIPCU (Police Intellectual Property Crime Unit). This unit then evaluates the reported websites as part of its Operation Creative initiative and contacts the site owners if they are found to be infringing copyright laws.

Then in the US, the Association of National Advertisers (ANA), Interactive Advertising Bureau (IAB) and American Association of Advertising Agencies (4As) came together in 2014 to create the Trustworthy Accountability Group (TAG), a cooperative industry effort to tackle ad-supported piracy. TAG’s first program deployed early 2015 is the Brand Integrity Program Against Piracy, a voluntary initiative through which TAG will validate select technology companies, known as Digital Advertising Assurance Providers. These firms are helping advertisers and agencies identify and screen out web sites identified as having carried pirated ads.

While these various programs take effect, online video advertising continues to grow fast. It will help drive expenditure on global advertising as a whole up to $540 billion in 2015, despite lack of major events like the FIFA World Cup, Olympic Games and mid-term elections in the United States, and despite TV advertising slipping to 42.2% of that total from 42.7% in 2014, according to UK based media agency Carat. Online video ad spending is forecast to grow by 22% this year.

Programmatic buying of online video ads is growing at a faster rate still and is expected to account for 40% of all digital video ad spending in the US in 2016, amounting to $3.84 billion and up from 28% this year, according to research firm eMarketeer.