YouTube hate videos snare Ikea ads and others as Google crisis spreads

Johnson & Johnson joined Verizon and AT&T in suspending digital advertising on Google's YouTube site over concerns their ads run next to offensive videos.
Major advertisers across Europe are still appearing alongside extremist YouTube videos.
Major advertisers across Europe are still appearing alongside extremist YouTube videos.PHOTO: REUTERS

LONDON (Bloomberg) - Major advertisers across Europe are still appearing alongside extremist YouTube videos days after technology giant Google said it was taking steps to protect its clients from inadvertently supporting hate.

An anti-semitic clip claiming the existence of a "Jewish World Order" was featured alongside advertisements in Germany from insurer AXA, oil company Total in France, Range Rover vehicles in South Africa, footwear retailer Skopunkten and website Tradera in Sweden, Bloomberg searches of YouTube from each country found on Thursday (March 23).

Separately, a sermon by preacher Ahmad Musa Jibril, who according to United States prosecutors once took credit for a terrorist bombing in Saudi Arabia, can be viewed alongside advertisements from Nissan in Sweden and wireless carrier MTN Group in South Africa.

Meanwhile, the Islamophobic English Defence League gathers support from advertisers Total, Netflix, IBM and watchmaker Tag Heuer International in France.

The controversy over ad placement, now in its second week, is expanding at a pace Alphabet's Google has struggled to match in its response. On Thursday, as Alphabet Chairman Eric Schmidt said Google could "get pretty close" to guaranteeing companies' ads won't be placed near hateful material, advertisers throughout Europe were confronting more than a dozen new examples and scrambling to protect their brands.

"We didn't know that our ads were played in this context," Axa spokesman Anja Kroll said in an e-mail. "We have immediately arranged for an update of the filters and stopped the delivery" of the ads because "diversity, tolerance and openness are values that are of key importance for us and that we practice daily".

While Axa hasn't pulled its ads from YouTube, the German unit is using "blacklist" filters to prevent its ads from appearing next to extremist, racist or other undesired content, Ms Kroll said. In this case, she said, the filters apparently failed.

"We don't comment on individual videos but as announced, we've begun an extensive review of our advertising policies and have made a public commitment to put in place changes that give brands more control over where their ads appear," a Google spokesman said. "We're also raising the bar for our ads policies to further safeguard our advertisers' brands."

Range Rover said in an e-mail it was suspending its YouTube campaign in South Africa while it investigates. Telenor Sweden, which had an ad showing before a propaganda video from a Swedish neo-Nazi group, also halted all YouTube advertising, according to spokesman Aron Samuelsson.

Nissan said it was "urgently reviewing" with Google while Nilson Group, owner of Skopunkten, said it had asked its media agency about the ads and is "awaiting answers", according to spokesman Linda Fernell.

Total, IBM, MTN, Tag Heuer, HBO and Netflix didn't respond or had no immediate comment. Tradera's owner, Paypal Holdings, declined to comment.

In Sweden, an Ikea spot was found alongside a homophobic and anti-Semitic video entitled: "Gay Pride Parade a Tool of International Jews." An ad for HBO's The Young Pope found its way to the pre-roll for "Jewish Hypocrisy - Flooding Europe With Immigrants" in Spain.

"It is completely unacceptable that Ikea appears in a context like this," spokesman Cecilia Nettelbladt Stenberg said by phone. "What we've done now is to ask our media agency to immediately investigate the reason behind this."

The discomfort highlights the reliance of Google and Facebook on automated computer programs that maximise volume and have helped them dominate online advertising, through their popular sites and their advertising networks.

Digital advertising grew by 17 per cent globally to US$178 billion in 2016, according to marketing consultant Magna Global, which projects that digital-based ad sales will overtake TV to become the No. 1 media category this year.

The global array of companies caught up in the controversy illustrates the scale of the problem for Google, which risks potential financial and reputational damage. The company was already facing claims in a lawsuit by the family of a terror attack victim that it profits from ads linked to terrorist propaganda promoting violence. The latest crisis erupted after a Times of London investigation last week revealed ads running alongside offensive content. Alphabet's market value has dropped by about US$24 billion this week.

"A cascade of major brand boycotts for Google ad spend (mostly non-search) has emerged, raising concerns on first quarter and second quarter results and the future of programmatic advertising," Bank of America Merrill Lynch analyst Justin Post wrote in a research note on Thursday, referencing the automated software programs Google uses to match advertisers with content online.

JP Morgan Chase & Co. and Ford Motor suspended their YouTube ads on Thursday. AT&T, Johnson & Johnson, GlaxoSmithKline and Verizon Communications joined the boycott earlier this week, after British Broadcasting Corp., Sainsbury, Volkswagen and Toyota Motor Corp. said they had pulled ads in Britain.

The latest examples show the scope of the Google's problem isn't confined to two large markets. It's global, affecting major advertisers in big European markets including Germany, France and Sweden, as well as South Africa.

At Skopunkten, a major shoe-store chain in Sweden, spokesman Ms Fernell said she was unaware of the "Jewish World Order" video but said the company had noticed some unwanted videos popping up in its YouTube campaigns. "I hope they can help us redirect the ads," she said. "We need to learn more about this."

While Google's tools can be incredibly sophisticated, allowing ads to follow users from site to site, the software hasn't fully matched the human judgment necessary to protect brands from inadvertently funnelling cash to causes their customers would find objectionable. The high number of intermediaries in digital advertising further complicates the problem. So Google's announced fixes may not completely solve the challenge.

"Google isn't yet fully addressing advertisers' concerns and needs to take stronger steps to regain the trust of brands," Morgan Stanley analyst Brian Nowak wrote in a note to clients Thursday.

Google said Tuesday that it was increasing safeguards to protect advertisers, such as automatically excluding ads from videos deemed "potentially objectionable" and giving advertisers more control over placement. While YouTube revenue isn't reported separately by Google, analysts estimate the video site brings in billions of dollars each year, and say it's among Google's fastest-growing businesses.

Mr Schmidt, in an appearance on Fox Business Network's Mornings With Maria on Thursday, said Google can generally ensure clients that their ads won't be placed next to "hate" content.

"We match the ads and the content," Mr Schmidt said, according to a transcript from Fox Business. "But because we source the ads from everywhere, every once in a while somebody gets underneath the algorithm and they put in something that doesn't match."

He said that Google had tightened its policies and increased the amount of time it spends manually reviewing the content, "and so I think we're going to be okay".