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

58 Pages Posted: 25 Jul 2023 Last revised: 26 Feb 2024

See all articles by Wajeeha Ahmad

Wajeeha Ahmad

Stanford University

Ananya Sen

Carnegie Mellon University

Charles E. Eesley

Stanford University - Management Science & Engineering

Erik Brynjolfsson

National Bureau of Economic Research (NBER); Stanford

Date Written: July 19, 2023

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. We identify 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.

Suggested Citation

Ahmad, Wajeeha and Sen, Ananya and Eesley, Charles E. and Brynjolfsson, Erik, The Role of Advertisers and Platforms in Monetizing Misinformation: Descriptive and Experimental Evidence (July 19, 2023). Available at SSRN: https://ssrn.com/abstract=4514749 or http://dx.doi.org/10.2139/ssrn.4514749

Wajeeha Ahmad (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Ananya Sen

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Charles E. Eesley

Stanford University - Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

HOME PAGE: http://chuckeesley.com

Erik Brynjolfsson

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stanford ( email )

366 Galvez St
Stanford, CA 94305
United States

HOME PAGE: http://brynjolfsson.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
543
Abstract Views
2,087
Rank
109,983
PlumX Metrics