Days after Google began apologizing to advertisers that stopped running YouTube ads after learning their brands were being featured alongside offensive and hateful videos, Verizon and AT&T say they are also pulling the plug on ads with the tech giant.
The crisis intensified after U.S. firms also pulled their ads from the network, resulting in loss of hundreds of millions of dollars in revenue for Google and YouTube.
Google’s network business, which serves display ads on other websites, generated $4.4bn in fourth-quarter revenue, about 20% of the company’s total ad sales.
Marks & Spencer, John Lewis and Sainsbury acted after the United Kingdom government, the Guardian newspaper, British banks and other marketers pulled advertising from YouTube. Google also plans to hire more people for its review team and refine its artificial intelligence – a key step, since much of the ad-serving is handled by automation.
When you are dealing with mega programmatic ad platforms like Google and Facebook, which eMarketer said cornered 47% of the global digital ad market in 2016, is often hard to address these issues.
An advertising boycott of YouTube is broadening, a sign that big-spending companies doubt Google’s ability to prevent marketing campaigns appearing alongside repugnant videos.
Last week, Volkswagen, Toyota, UK newspaper The Guardian, and Heinz froze spending on the top video platform. The decision by major US brands to withdraw spending suggests that boycott is quickly spreading. Google doesn’t disclose how much of that came from YouTube ads, but the research firm eMarketer estimated that the video site accounted for $5.6 billion that amount.
“We have placed a temporary restriction on our YouTube advertising pending reassurances from Google that government messages can be delivered in a safe and appropriate way”.
Mizuho Securities analyst Neil Doshi estimates that YouTube could generate about $12 billion in gross revenue this year. In addition, more than 400 hours of video are uploaded to YouTube (which is owned by Google) on a daily basis.
YouTube has experimented with content moderation in the past too. The moves by the two US telecom giants came despite a pledge by Google this week to offer new tools for companies to avoid placing ads alongside undesirable websites or videos. It said it was seeking “urgent assurances” from Google that the problems were being addressed.
AT&T and Verizon have chose to remove their ads from YouTube over videos promoting hateful speech and terrorism.