Big companies press pause button on YouTube advertising

Advertisers concerned that ads will pop up alongside videos promoting terrorism, hate

SAN FRANCISCO • Google's advertising crisis went global after some of the world's biggest marketers, including AT&T and Johnson & Johnson, halted spending on YouTube and the Internet company's display network, citing concerns that their advertisements would run alongside offensive videos.

The controversy erupted last week after London-based Times newspaper reported that some ads were running with YouTube videos that promoted terrorism or anti- Semitism.

The British government and The Guardian newspaper took down their ads from the video site.

Havas, the world's sixth-largest advertising and marketing company, pulled its British clients' ads from Google's display ad network and YouTube.

On Wednesday, the boycott spread across the Atlantic as companies in the United States that are among the heaviest ad spenders pulled back, potentially costing Google and YouTube hundreds of millions of dollars in lost business.

DEEP CONCERN

We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate... Until Google can ensure this won't happen again, we are removing our ads from Google's non-search platforms.

A SPOKESMAN FOR AT&T

AT&T and Verizon Communications, the largest US wireless carriers, said they had stopped non-search advertising spending with Google. Johnson & Johnson, the biggest healthcare company in the world, paused all YouTube advertising globally.

"We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate," a spokesman for AT&T said on Wednesday.

"Until Google can ensure this won't happen again, we are removing our ads from Google's non- search platforms."

To shield its brand, Verizon took the same action. It has also started an investigation, said its spokesman Sanette Chao.

Search represents the lion's share of Google's advertising revenue, which was US$79.4 billion (S$111 billion) last year.

However, large advertisers such as AT&T tend to spend more heavily across Google's video and display advertising network.

AT&T is the fourth-largest advertiser in the US, spending US$941.96 million last year, according to Kantar Media, and Verizon is the third largest.

Google has said it has begun a review of its advertising policies and is committed to putting in place changes that give brands more control over where their ads appear.

While Google pledged to improve, brands wanted to hear there would be zero risk that their ads would appear near content promoting things like hate speech and terrorism, said Mr Brian Wieser, a media industry analyst at Pivotal Research. "They're saying they're trying harder - that's insufficient. They don't seem to understand the scale of the perceived problem," he noted.

Sainsbury's, the BBC, Toyota Motor, Volkswagen and Havas each said on Wednesday that the decision to pull ads from YouTube has not changed following Google's announcements.

Google's network business, which serves display ads on other websites, generated US$4.4 billion in fourth-quarter revenue - about 20 per cent of the company's total ad sales.

While YouTube revenue is not reported separately, analysts say the video site brings in billions of dollars a year and that it is among Google's top-growing businesses.

BLOOMBERG, NYTIMES

A version of this article appeared in the print edition of The Straits Times on March 24, 2017, with the headline 'Big companies press pause button on YouTube advertising'. Print Edition | Subscribe