Issue of the week: the shaming of Google

Google is facing a mass boycott over its failure to control extremist content. Will it shift the balance of power in advertising?

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, said the Financial Times. On one estimate, this “digital duopoly” accounted for 75% of all new online ad spending in 2015 – a stranglehold that will become ever more lucrative given that “online spending is on track to overtake television as the ad industry’s biggest revenue source this year”. Now, however, a “growing scandal”, involving the inadvertent placing of ads next to extremist content on Google’s Youtube video platform, has raised questions about whether “the balance of power” could be about to “shift again”.

There’s certainly a rebellion afoot, said Alexi Mostrous in The Times. The revelation that brands such as Sainsbury’s and L’oréal – not to mention the Royal Navy – have had their marketing efforts displayed alongside content from the US white nationalist David Duke, and Wagdy Ghoneim, a Muslim preacher banned from the UK, have prompted a mass boycott. More than 250 companies, including several UK banks, Mcdonald’s, M&S, Volkswagen and the French advertising firm Havas (acting on behalf of all its clients) have suspended their advertising deals. In a desperate effort to avoid further defections, Google’s head of European operations, Matt Brittin, has apologised for the debacle, promising to “raise the bar” on what is categorised as “inflammatory content” and to make it easier for brands to control where adverts will appear. But he “refused” to say whether Google would root out the offensive content altogether, said Nils Pratley in The Guardian. Until that commitment is made, it’s hard to understand why “irate advertisers would wish to risk a return to Youtube”. As things currently stand, “the place looks like the Wild West, with the sheriff admitting he’s lost control”.

It seems unlikely that this saga will spark a wider shift away from Google, said Mark Scott in The New York Times: its consumer reach is just too broad for advertisers to ignore. But it needs to fix the problem or it will suffer financially. Despite the “large bets” that its parent company, Alphabet, has made on, say, driverless cars and healthcare, the $19.5bn profit it made last year was “almost all” generated by Google’s advertising business. “A moment of truth is approaching,” said The Times. Silicon Valley’s tech giants “have profited prodigiously from a business model that relies on software to do the heavy lifting”. But, as WPP’S Sir Martin Sorrell pointed out, Google and Facebook can no longer “masquerade as technology companies”, while avoiding their responsibilities as publishers. If Google cannot police its own site, “the vast swathes of cyberspace that it controls will become the online equivalent of a failed state”.