The Role of Advertisers and Platforms in Monetizing Misinformation: Descriptive and Experimental Evidence

Abstract

The financial motivation to earn advertising revenue by spreading misinformation has been widely conjectured to be among the main reasons misinformation continues to be prevalent online. Research aimed at reducing the spread of misinformation has so far focused on user-level interventions with little emphasis on how the supply of misinformation can itself be countered. In this work, we show how online misinformation is largely financially sustained via advertising, examine how financing misinformation affects the advertisers and ad platforms involved and suggest ways of reducing the financing of misinformation. First, we find that advertising on misinformation outlets is pervasive for companies across several industries and is amplified by digital ad platforms that automatically distribute companies’ ads across the web. Using an information provision survey experiment with a representative sample of the U.S. population, we show that people decrease their demand for a company’s products or services upon learning about its role in monetizing misinformation via online ads. Across a variety of experimental conditions, our results indicate that companies advertising on misinformation websites can face substantial backlash from consumers who discover the prevalence of such ads. To shed light on why misinformation continues to be monetized despite the potential backlash for the advertisers involved, we survey decision-makers at companies. We find that most decision-makers are unaware of their companies’ ads appearing on misinformation websites but have a strong preference to avoid appearing on such websites. Moreover, those uncertain about their role in financing misinformation increase their demand for a platform-based solution to reduce monetizing misinformation upon learning about how platforms amplify ad placement on misinformation websites. Our results suggest low-cost, scalable information-based interventions that digital platforms could implement to reduce the financial incentive to misinform and counter the supply of misinformation online.