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Google’s problems with advertisers over ad misplacements on YouTube and other Google non-search properties appear to be mushrooming rapidly.
This week Verizon, AT&T, Johnson & Johnson and Enterprise Rent-A-Car joined a growing list of major companies to pull advertisements from Google after revelations that their ads were being placed next to jihadist and neo-Nazi videos and other inappropriate content on YouTube.
In a statement, Verizon described the company’s move as designed to protect its brand image. “Verizon is one of the largest advertisers in the world, and one of the most respected brands,” the company said. “We take careful measures to ensure our brand is not impacted negatively.”
Verizon said it acted after being notified about its ads being placed by Google on non-sanctioned websites. “We took immediate action to suspend this type of ad placement and launched an investigation.” The company is currently working with all of its digital advertising partners to figure out how to prevent the same thing from happening again, the statement added.
AT&T and Johnson & Johnson ascribed similar reasons for their decisions to pull advertisements from Google. “We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate,” an AT&T statement said. “Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms.”
Johnson & Johnson noted in a statement that the company has paused all YouTube digital advertising globally to ensure that its ads do not end up against offensive content online.
The string of ad withdrawals deepens what has quickly become a crisis of significant proportions for Google. Already, several major brands in the United Kingdom, including the British government, Guardian, BBC and Mercedes Benz, have pulled their advertisements from Google.
The decisions to pull out stemmed from an investigative report in the London Times, which showed Google’s automated ad placement system placing their ads alongside YouTube videos from terror groups and those proselytizing hate against people based on race, gender and other issues.
Advertisers are doubly upset because in addition to their ads running on offensive videos, the publishers of the videos actually make money from the ads being placed on their content. Under the way Google’s ad monetization system works, video publishers can make up to $7.50 for every 1,000 views. Google already faces two lawsuits in the United States over the issue from the families of two victims of the terror attacks in Paris and the nightclub in Florida. The plaintiffs have accused Google of materially supporting terrorism by paying ad dollars to publishers of jihadist videos on YouTube.
Google has described the ad misplacements as inadvertent and resulting at least partly from the sheer volume of content being uploaded to YouTube on a daily basis from people around the world. Like others, including Facebook and Twitter, Google uses an automated process known as programmatic advertising to place ads on YouTube and the over two million sites that are part of the Google Display Network.
Sometimes the system can make mistakes Google has admitted while promising to introduce new measures that will give advertisers more direct control over ad placement.
The question now for Google is whether it can implement those changes quickly and transparently enough to prevent more advertisers from walking away, even if only temporarily.
Programmatic buying is a relatively new advertising practice that has become mainstream only within the last few years, Enterprise said in a statement explaining its decision to pull ads from Google. “Although it is effective in dealing with the highly fragmented nature of the digital ad world, programmatic buying is still evolving as a business practice—and it appears that technology has gotten ahead of the advertising industry’s checks-and-balances,” the car rental giant warned. “There is no doubt there are serious flaws that need to be addressed.”
So far such concerns don’t appear to have spilled over to Wall Street. But analysts from Mizuho and Merrill Lynch this week stressed the importance of Google addressing the problem before it gets worse.
“Google’s problems with ad placement or misplacement are reminiscent of the issues Facebook ran into with curating its news feeds,” said Charles King, principal analyst at Pund-IT. “Practically speaking, the programmatic tools that Google and other companies use allow them to provide volume ad services cheaply and effectively.”
The question now is whether the changes that Google has said it is making to give customers more control over ad placement will affect the larger reach and effectiveness of its ad platform, he said.
It is also worth noting that at least some of what’s going on could be posturing by potential rivals, King said. AT&T through its Time Warner pursuit and Verizon via its acquisition of AOL and planned Yahoo purchase are both positioned to be direct competitors to Google in future, he said. “Both companies should provide evidence of how they plan to avoid causing buyers of their own online ad services the same sort of pain that they claim to be suffering due to Google.”
Google did not comment directly on the most recent exodus of advertisers but pointed to a recent blog post by Chief Business Officer Philipp Schindler promising ad policy changes.