Squeezing Advertising Out Will Leave Disinformation as the Only Game in Town

Today, major media in Poland did not display their content in protest against plans to cut their advertising revenues by the government. NATO countries should treat advertising markets as an element of democratic security. Altering revenue streams is bad news for media advertising. It is also an open door invitation for more disinformation business.

Visegrad Insight has been continuously warning against the damage to the advertising market which increases the corruption of the media ecosystem and exposes democracies to foreign malign influence in the shape of disinformation. Our scenario-based report released in March 2020 maps out dangers to media and advertising ecosystem that could irreversibly expose Central Europe to the hostile influence of hostile actors. As it turns out one of the scenarios is now unfolding in Poland, where the government is using the crisis to cut media revenues and curb press freedom.

We also support #mediabezwyboru protest of the media industry in Poland that calls on the government to cancel plans to tax advertising revenues. Read the update below to understand a bigger picture from the point of view of democratic security.

Disinformation has a Janus face. Most public attention focuses on the ugly conspiracy theories, disgusting trolling and online bullying. For many, it is also a profitable business. 

There are studies that explore fake narratives so surreal that they could be scripts for another Borat movie. A fascinating classification of pro-Kremlin narratives in Belarus by Andrei Yeliseyeu makes an important contribution to the genre. The stories could have been even funny if not the serious consequences for society and for the economy. 

Until recently the phenomena of disinformation was considered to be a foreign state-sponsored activity. It turns out that the problem is a systemic corruption within our own economies. There is a growing number of people who make living out of disinformation. Their income is not directly linked to Kremlin’s coffers even though they serve Moscow’s purpose.

In other words, the disinformation on the current scale is possible because it is powered by mechanisms of digital ad fraud, shady sponsorship but also unethical crowdfunding. There are many global and local examples but ultimately they are usually tied to malign foreign influence.

Closely following Kremlin disinformation trends

During the autumn 2020 protests in Warsaw, there were swarms of protesters against the government and its anti-abortion policies. A few far-right thugs led by Robert Bąkiewicz organised an online counter-campaign that portrayed themselves as defenders of church buildings, allegedly under attack. 

While there was no reported interest in attacking any of the churches, the iconic image of “church defenders” against the so-called LGBT- and gender-ideology has helped to raise over 70,000 euros in a matter of days. Those funds were then appropriated by groups in Poland known for spreading anti-democratic narratives closely following narrative trends set up by the Kremlin. 

Although nobody would suspect Polish over-zealous catholic boys with shaved heads and military uniforms of anything but love for their country, such ideological allegiance is a known fact across Europe, also recently portrayed in a book by Anton Shekhostov.

For Moscow, it is a smart way to make disinformation economically sustainable. Otherwise, it would need to pour money from its own shrinking budget. Following this rather simple logic, other revisionist powers can easily follow thus creating a whole market feeding us with their propaganda for our own cash. 

The disinformation networks are efficiently decentralised and earn growing revenues from micropayments as well as hard to trace digital ad fraud but they are also propelled by legitimate news services that employ clickbait driven by the need for ad revenue or disinformation for profit.

That is also a conclusion of a study concluded by the Prague Institute of Strategic Studies (PSSI) in March 2020 on disinformation as a business. The ‘fear entrepreneurs’ in Czechia follow global trends most illustratively represented by schemes of Richard Bannon earning money from people who get scared by their fear-mongering and bigotry. 

Impostors pretending to operate as PR and advertising companies have built well prospering businesses. They follow no ethical standards and employ people to troll and misinform for money. Their profits are often generated by companies or politicians that intend to discredit the competition but they also deal with damage to the democratic setup and expose it to foreign rivals. This shadow economy nurtures a disinformation ecosystem and is an open invitation also for autocratic powers and their agents to exploit systemic weaknesses across the world.

Similarly, this is the case in Central and Eastern Europe. While in Slovakia one conspiracy theory-driven portal Konspiratori earns yearly over 80,000 euros from advertising alone, the Global Disinformation Index estimates that some 20,000 websites identified as purposely spreading disinformation generate some 213 million euros annually solely from online advertising – according to the authors of a PSSI follow-up paper with recommendations from stakeholders on how to limit this corrupt practices.

Accepted EU-wide standards for the sector

Industry leaders in Czechia seem to agree that the national PR and advertising industries ought to establish common rules for the community – following the EU code of practice on disinformation guidelines. 

In practice, however, such initiatives are not welcomed enthusiastically and they are poorly staffed and funded. Unless there is an economic incentive to encourage the marketing sector to pay for a clean internet space – by means of regulation for instance – this will not take off.

Another finding by PSSI is that persistence pays off. At first, this sounds too simple but in fact, the sector is largely driven by short attention spans that follow general demand for quick, new impulses that help sell. To work on long term goals with this community, a very creative one nonetheless, is the daily practice of the ice bucket challenge.

The real incentive one can wish for may come from advertisers who are worried about reputation loss to their brands. Steps taken by Unilever and P&G which over the last years cut millions of dollars from their digital advertising budgets for lack of accountability has resonated in various national boards of audits set up by advertising industries and media. Unless national players will not find a way to repair the broken system themselves the steam of money may eventually drain out. 

This motivation was already behind Polish industry leaders that united in spite of government permissiveness for disinformation. Led by major advertising agency associations, they signed a common memorandum pledging to set up EU-wide accepted standards themselves (ed. read their communication in Polish).

Finally, PSSI’s paper identifies a need to internalise the ethic code among industry professionals. A good call but is it not too late? 

The media and advertising markets have experienced a terrible blow with the pandemic. Revenues from advertising fell in CEE dramatically sinking by nearly 50 per cent in the first month of the crisis.

Desperate for new revenue streams

At the same time, media revenues from subscriptions rose but rest assured, that not enough to match losses from ads – most of the press is still uneasy with the digital subscription model and only to catch up with new trends pushed forward by Netflix.

Overall, the professionals in the sector have become desperate for new revenue streams that come easier from sources that have earlier raised eyebrows. This systemic threat endangers democratic information sovereignty hollowing out norms from the public space and exposing media outlets to sponsorship ranked as sharp power.

In the past years, the threat from such malpractices was coming primarily from Russia but as Albin Sybera reports, the recent changes in the Czech media market expose democracy to influence from Chinese Communist Party and its subjects. Investors operating closely with China are using a market opportunity to purchase media and use them for lobbying for Beijing’s interests in Europe.

While advertising and digital advertising is important the myth that information is for free is finally going to die with the pandemic. On the upside, this will mobilise a number of self-aware internet users to pay and demand quality services. 

On the downside, the dominant information culture is by now permissive to disinformation believing that information is free. The current economic downturn might be the last opportunity to make people aware that disinformation is stealing both their attention and money.

This article is published as part of the Prospect Foundation project “Online Media Literacy for Editors and Administrators of Social Media Public Pages”, managed by iSANS and supported through grants from the International Visegrad Fund. Also available on iSANS. A Czech version of this article can be read at Britské listy.

• Belarus
• Czech Republic
• Disinformation
• Media
• Poland
• Protest