YouTube scandal shakes up digital advertising
Publishers hope to benefit if placement row leads brands to switch from Google platform
Over the past five years, Google and Facebook have cut a conquering swath through the market for digital advertising, snatching ever more business from legacy media companies, such as print newspapers and magazines.
But a scandal involving the inadvertent placement of ads next to extremist content on Google’s YouTube video has raised questions about whether the balance of power is about to shift again.
Revelations from The Times newspaper that ads from the UK government and brands such as J Sainsbury and L’Oréal were placed alongside YouTube content from white nationalists and banned Muslim preachers have prompted several brands to pull their ads from the video site. The controversy has also raised hopes among publishers that have lost ad spending to the digital duopoly of Google and Facebook.
Brian Wieser, a senior research analyst at Pivotal, downgraded Google in a note yesterday, saying it faced “a serious issue in the UK with brand safety issues” that have“global repercussions ”.
Google faces a hostile industry of European media owners, with “many of them owners of print properties which have been negatively impacted by Google’s successes” Mr Weiser added, while the trickle of bad news is unlikely to stop. “We expect they will be all too happy to highlight future brand safety failings, negatively imp acting brands .”
It is unclear if traditional media websites will be able to capitalise.
They certainly need the business: last year advertising revenues at most big newspaper publishers fell off a cliff as brands moved en masse out of print and towards digital platforms. The switch consolidated the strength of Google and Facebook, which in 2015 accounted for 75 per cent of all new online ad spending, according to Mary Meeker of Kleiner Perkins Caufield & Byers, the US venture capital fund.
Michael Roth, chief executive of Interpublic, one of the world’s biggest advertising groups, warned that if Google fails to “fix” the problem of extremist content on its platform then it will“suffer economically ”.
But he added that it was unlikely to spark a wider shift in advertising from the Silicon Valley group: “They have a great product and as long as the product is great and we can reach the consumers we want to reach then it’s unlikely to change. This is about economic reality.”
Google came face to face with its advertising clients over the issue yesterday at an Advertising Week Europe presentation that had initially been billed as a discussion about “building brands in an attention economy ”.
Taking the stage alongside Keith Weed, head of marketing for Unilever, the second-biggest advertiser by spend,
Matt Brittin, Google’s European president of operations, found himself immediately on the back foot, peppered with questions about the crisis.
Although he offered an apology for failing to police the placement of ads next to inappropriate content, he gave little detail as to how the company would prevent a repetition. “We have millions of dollars invested and thousands of people whose job it is to ensure bad advertising doesn’t get through,” he said. “We have a review under way and we are accelerating that review .”
But even as Mr Brittin was speaking, the Financial Times found that videos of Wagdi Ghoneim, an Egyptian Muslim imam banned from Britain in 2009 for inciting hatred, were preceded by advertisements for the Advertising Week Europe event, as well as brands such as Huawei and Wix.com.
Sir Martin Sorrell, chief executive of W PP, told the FT that it was“too early to say” whether the furore would presage a switch by brands out of YouTube and into other forms of advertising. “They and other digital companies have to take responsibility for their content as other media companies do.”
Facebook, which, alongside Google is the main beneficiary of new online ad spending, has managed to avoid similar criticism because it has a different targeting and revenue model.
In addition, Mark Zuckerberg, Facebook’s chief executive, has already said that the company plans to use artificial intelligence to tackle inappropriate content. “There are billions of posts, comments and messages across our services each day, and since it’s impossible to review all of them, we review content once it is reported to us,” he wrote last month. “We are researching systems that can look at photos and videos to flag content our team should review .”
Even so, controversies over ad placement are unlikely to abate — the YouTube controversy comes less than a year after a Google-provided service placed ads from Citigroup, Microsoft and IBM on the website of an Islamist extremist accused of funding the 2009 Jakarta suicide bombings.
Digital debate: Google has apologised for failing to police the placement of adverts next to inappropriate content on YouTube