YouTube scan­dal shakes up dig­i­tal ad­ver­tis­ing

Pub­lish­ers hope to ben­e­fit if place­ment row leads brands to switch from Google plat­form

Financial Times Middle East - - Companies - MATTHEW GARRAHAN, DAVID BOND AND MADHUMITA MURGIA — LON­DON

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.

Beaw­i­harta/Reuters

Dig­i­tal de­bate: Google has apol­o­gised for fail­ing to po­lice the place­ment of ad­verts next to in­ap­pro­pri­ate con­tent on YouTube

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