YouTube’s better-than-TV pitch undermined by offensive video
Four years ago, Robert Kyncl, YouTube’s business lead, confessed a mistake. “I thought that YouTube was like TV. But it isn’t,” he said at Google’s annual advertising show. “YouTube talks back. It’s interactive. And YouTube is everywhere.”
Kyncl’s message resonated with advertisers. Gross ad revenue at YouTube soared from roughly $4 billion in 2013 to $11 billion last year, brokerage firm Monness Crespi Hardt & Co estimates. At the same event in 2016, Chief Executive Officer Susan Wojcicki boasted about taking ad dollars from traditional TV networks.
Yet now the same traits Kyncl said made YouTube better than TV have plunged the video service into crisis. Some of the world’s largest advertisers, from Verizon Communications to Johnson & Johnson, stopped spending on YouTube because of concern their ads could appear next to offensive videos. More big companies pulled back on Friday, including PepsiCo, Starbucks and Wal-Mart Stores. This week, $26 billion was knocked off parent company Alphabet’s market value.
“I’ve always been suspect of advertising on YouTube. There’s not really great content in there,” said Rob Griffin, chief innovation officer at marketing agency Almighty. “This will dent their long-term prospect of making YouTube an alternative to TV.”
While the shift to online video viewing favours YouTube, it is scrambling to reassure companies and ad agencies they’ve made the right decision to spend money on the site, and convince them YouTube will protect their ads from offensive material in the future.
Google attempted to curb the controversy Monday, pledging publicly to roll out new controls for marketers. In a memo sent to partners later in the week, Google described more detailed changes, including a new video verification process, long sought by advertisers, and a staff hotline dedicated to brand safety. Another feature Google promised will use machine learning, a type of artificial intelligence, to flag suspect videos. The new approach would now yank ads if offensive language appeared on a Tshirt in a video, for instance, something that didn’t happen before, according to the memo.
Google aims to implement most of the changes by Sunday, according to the memo. A Google spokeswoman declined to comment.
Even if the company meets that deadline, it may struggle to solve the issue. While TV companies have almost total control over what appears on a given channel, creating a safe space for brands, YouTube opens itself up to anyone who wants to post a video. Advertisers often buy ads across the whole site, or large groups of popular videos, instead of buying ads for a specific channel. The company has safeguards to block offensive content, but the volume of video being uploaded is too great to identify every infringing video.
YouTube warned as much in its memo. Forthcoming changes “should give [advertisers] confidence that their ads will not appear against inappropriate content,” the memo read, “albeit with the volume of content involved this can never be 100 per cent guaranteed.”
Advertisers are now urging Google to let outside companies track issues like safe content, measurement and fraudulent ads on YouTube, according to David Cohen, North American president for Magna Global. In its memo to advertisers this week, Google said it will offer detailed reporting at the level of specific videos and YouTube channels. Google also said in the memo that YouTube customers will able to hire “vendors to verify the safety” of ad placements.