The third edition of the Annenberg Innovation Lab's Ad Transparency Report is now unofficially doing the rounds. Google, Quantcast and Open X are praised for making "strong moves" to block sites that receive a lot of DMCA notices but the government and some major companies are in for criticism for failing to place their ads more carefully. This week's "Piracy is Progress" Times Square campaign is also mentioned in a negative light.

For years the entertainment industries have complained about American companies’ advertising appearing on and therefore financially supporting so-called “pirate” sites. Hollywood and the record labels believe that responsible companies should place their promotions elsewhere, for the sake of both their businesses and the U.S. economy.

To this end it’s common to publicly highlight the fact that U.S. companies are targeting potential customers on sites deemed offensive by the entertainment industries in the hope that their respective branding departments will feel nervous that continued exposure will cause damage to their image.

In advancement of this name-and-shame philosophy, since the start of the year the Annenberg Innovation Lab at the University of Southern California has produced a monthly report aiming to identify the online ad networks and companies offering the most support to “major illicit file sharing sites around the world.”

The third installment for March 2013 delivers more of the same. The University researchers say they have monitored the top 500 URLs receiving the most DMCA takedown notices as listed in Google’s Transparency Report and from that worked out which ad networks give the most support to “pirate” sites.

The technique is problematic, mainly due to the fact that just because a site receives a DMCA notice it doesn’t necessarily follow that they have refused to comply and therefore in non-compliance. Plus, these are notices sent to Google, not the sites themselves.

Of all companies online, Google receives the most DMCA notices to the tune of several million per week, but they aren’t considered a “pirate site” and rightly so. From the report there is no indication that the USC researchers have considered whether the sites in the top 500 are compliant or not.

Ad Networks criticized

The ad networks topping the charts this month are:

1. Propellerads

2. Exoclick

3. Infolinks

4. Adcash

5. Admxr

6. Adsrevenue (New entry)

7. Yahoo/Right Media

8. Adserver (New entry)

9. Trix.net (New entry)

10. Sumotorrent

Google (Doubleclick) were present in the January report but have not appeared since. The same applies to Quantcast but for different reasons. USC appear to have retrospectively modified both of their previously issued reports when discussions with Quancast revealed the ad network had been included in error (they weren’t serving ads in many cases).

“In late February we have had productive talks with Quantcast about our January and February Ad Reports,” USC write. “We now believe that Quantcast was incorrectly identified as being among the top ten Ad Networks placing ads on infringing piracy sites.”

It’s also worth noting that SumoTorrent, which has appeared in previous USC reports but this month at its lowest position yet, is listed as a large advertising network in its own right. It isn’t. SumoTorrent uses ads from other providers and serves them only on its own sites, SumoTorrent and Seedpeer.

Furthermore, some very basic clickstream analysis reveals several ad networks successfully funding some of the biggest file-sharing sites warrants not a single mention anywhere in USC’s report, which raises serious questions about the validity of the techniques being used.

Brands said to be reporting “pirate sites”.

While noting that they may not have deliberately placed their ads on the sites in question, Annenberg Innovation Lab still lists many large brands who they claim are providing advertising revenue to sites that have received a lot of DMCA takedown notices.

There are some huge names, not least government related departments including the U.S. Army and National Guard.

From the world of fashion we see Adidas and Gucci. In the online and computing realm we see Amazon, Ancestry.com. AT&T, Bing, Google Play, HP, Verizon, World of Warcraft, Windows 8 and Xfinity. Motoring related brands include Firestone, Ford, Honda, Lexus, Lincoln, Mazda, Mini Cooper, Toyota. Sundry others include American Express, IKEA, Pizza Hut and Target.

Finally, and quite unusually, the report takes a shot at this week’s Times Square advertising campaign by the band Ghost Beach.

Speaking with TorrentFreak, band frontman Josh Ocean explained that they hoped the campaign would “..open a discussion up with our peers about how they felt about music distribution on the internet and the future of the industry,” but the USC researchers frame things differently.

They are suggesting a contrast between what the band are really trying to do versus the actions of a company that took efforts to end associations with piracy earlier this year.

“Whether this is just a publicity stunt or a real counter trend, we can’t help but contrast this to the moves of Levi Strauss to make sure its ads did not appear on pirate sites,” the researchers write.

While Levi Strauss did indeed withdraw advertising from certain sites in January, as far as we know Ghost Beach have never advertised on a ‘pirate site’ but in fact have spent significant amounts of money through their licensing deal with American Eagle to place advertising for their own product with a completely legitimate agency. Why this latest campaign is even mentioned in the report seems to defy reason.

Moving forward, if this research by USC is to maintain credibility next month and beyond it will need to consider its methodology and accusations more carefully.

While there is undoubtedly plenty of sites in the top 500 domains in Google’s Transparency report that are not DMCA compliant, there will be many that are. Simply looking at DMCA notices sent to Google and from that concluding that the sites they concern aren’t compliant is seriously flawed.

For example, RapidShare – a company that has made huge efforts to disassociate itself with piracy in recent years – is in the top 50 sites as listed by Google’s Transparency Report. Is this company not allowed to make a living through advertising anymore, even though it is DMCA compliant?

If it is to remain neutral, USC needs to look at DMCA notices sent to the sites themselves (or obtain data on the same) and then measure how many of those are being ignored before it can start judging what is and what isn’t a “pirate site”.