Google Stock Fell Again Friday As YouTube Ad Boycott Continues

The Verizon logo is seen on the side of a truck in New York
The Verizon logo is seen on the side of a truck in New York City U.S

25 March, 2017

We promptly remove the ads in those instances, but we know we can and must do more.

An advertising boycott of Google's video service YouTube has slashed billions from parent company Alphabet's market cap.

Here's where it could get interesting. However, many advertisers want to see more details on the new measures initiated by the company. In a statement, the company said: "We don't comment on individual customers, but as announced, we've begun an extensive review of our advertising policies and have made a public commitment to put in place changes that give brands more control over where their ads appear".

The problem is hard to control, since Google's network extends to roughly two million websites, with thousands more added every day.

While the United Kingdom government noted its advertising freeze was temporary "pending reassurances from Google that government messages can be delivered in a safe and appropriate way", other advertisers were highly critical of the company for not better policing its products. Then Friday, PepsiCo, Walmart, Dish, Starbucks, General Motors and FX Networks stopped spending on YouTube, according to the Wall Street Journal. That led to a focus on so-called "Fake News", numerous purveyors of which rely on Google's advertising products for monetizing their hoax content. "If the standards are understood and the methodologies verified, there is less friction for marketers and we can compete on the merits of the platforms and offerings themselves".

More big advertisers have joined the YouTube exodus over concerns that their commercials have appeared in extremist hate-speech videos, and as the crisis spreads the head of the Association of National Advertisers on Friday urged Google to take steps to guarantee the safety and reputations of its members.

AT&T claimed to be "deeply concerned" about their adverts appearing alongside content on YouTube promoting "hate". The UK government ceased all advertisements on YouTube, with ministers summoning the web giant. For a deeper look at how this is now playing out, this Wall Street Journal article is very helpful. Google is willing to try, if only to stem the exodus of advertisers. But that's when three major U.S. advertisers joined the fray, with AT&T, Verizon and Johnson & Johnson suspending their non-search Google ad spend.

The video was also paired with brands in Asia - Castrol lubricants in India and Cow & Gate infant formula in Hong Kong.

John Lewis, Waitrose and Disney also had ads appearing beside videos by hate preachers, homophobes and white nationalists. Even worse, it will create another rationale for shifting video advertising budgets back to television, or at the very least, long-form video content streamed by major broadcast and cable programmers.

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And for Verizon, there's another incentive to play hardball with Google.

The company was already facing claims in a lawsuit by the family of a terror attack victim that it profits from ads linked to terrorist propaganda promoting violence.

Search occupies a significant share in Google's advertising revenue that stood at $79.4bn past year.

It's important to remember that issues with proper ad placement on YouTube reflect problems with digital advertising generally.

As the Times reports, paid advertisements are automatically placed on websites, often without a precursory check of that website's content.

Vehicle rental companyEnterprise, for example, alsostopped buyingwith YouTube, pinning its concerns to programmatic ads.

However, says Doshi, "if Google does not nip this issue in the bud, we think there could be broader repercussions around YouTube's brand, if consumers, creators and advertisers stop coming to the site".

Moreover Mr. Schindler also said that Google plans to hire large numbers of people and developing new tools to enhance our capacity to review dubious content for ads. And search is where the money is for Google.

Google hasn't disclosed how much of that came from YouTube ads, but research firm eMarketer estimated the video site accounted for $5.6bn.

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