Study Suggests Ways to Reduce Corporate Financing of Falsehoods
Researchers from Carnegie Mellon University and Stanford University examined the complex web of relationships between advertisers, digital ad platforms, and misinformation outlets. Their findings, published in the journal Nature, shed light on the reasons misinformation continues to proliferate online and propose interventions to curtail its spread.
The researchers compiled an extensive data set covering nearly 5,000 websites and over 42,000 advertisers from 2019 to 2021. They discovered that a substantial number of companies were appearing on misinformation websites, often unwittingly, as their ads were placed there by automated digital ad platforms. This funneling of ad dollars to false information purveyors is expected to worsen as AI makes it easier to churn out misinformation at scale to generate ad revenue.
Consumer Backlash Against Brands Advertising on Misinformation Sites
Through an experiment with a representative sample of U.S. consumers, the researchers found that companies can face significant backlash for having their ads appear alongside false content. Participants said they would stop purchasing from brands after learning their ads were on misinformation sites. This effect persisted even when consumers were told the ad placements were done by third-party platforms. Many also signed petitions urging companies to stop advertising on outlets spreading falsehoods.
“Online misinformation can have significant consequences, including sowing political discord and exacerbating the climate crisis,” said study co-author Ananya Sen, an assistant professor at Carnegie Mellon’s Heinz College. “Our work is a first step toward understanding how to limit the financing of online misinformation via advertising.”
Corporate Leaders Underestimate Their Brands’ Presence on Misinformation Sites
The researchers surveyed corporate decision-makers to understand why misinformation continues to be monetized despite the risks of consumer backlash. While most executives believed companies commonly advertised on misinformation websites, they significantly underestimated the likelihood of their own brands appearing on such sites. This suggests many are inadvertently financing misinformation due to a lack of awareness. When informed their ads had in fact appeared alongside false content, leaders expressed interest in learning more and finding platform-based solutions.
“Our findings have clear, practical implications,” said lead author Wajeeha Ahmad, a Stanford Ph.D. student in management science and engineering. “Given the potential for a substantial decline in consumer demand, ad companies may want to account for consumer preferences in placing their ads across various online outlets and exercise caution when incorporating automation in their business processes via digital ad platforms.”
The authors propose two low-cost, scalable interventions: improving advertiser transparency about where ads appear, which could be incorporated into existing legislation, and having platforms make it easier for consumers to see which brands are advertising on misinformation sites through disclosures and company rankings. With stronger consumer backlash among women and left-leaning consumers, companies targeting those audiences may want to be especially cautious, the researchers note.
The study was funded by several organizations at Stanford University as well as the University of Pennsylvania’s Economics of Digital Services initiative.
