Pepsi, Walmart and Starbucks join list of companies suspending advertising on YouTube

LONDON - More big companies, including Pepsi, Walmart and Starbucks, have suspended their advertising on YouTube, amid a boycott by advertisers seeking assurances that their marketing messages will not be displayed along with hateful content on the video sharing website.

The suspensions, confirmed by the companies on Friday, came after the Wall Street Journal reported their brands were placed by Google's automated programs on videos containing racist content.

In addition to the YouTube suspensions, Walmart, Pepsi and several other companies also said they would stop buying ads placed by Google on more than two million other third-party websites, the Guardian reported on Saturday (March 25).

Earlier this week, AT&T, Verizon and Volkswagen joined a growing list of companies that have halted spending on YouTube and the Internet company's display network, citing concerns that their advertisements would run alongside offensive videos, Bloomberg reported.

The controversy erupted after a report by the London-based Times newspaper on March 17, which said some ads were running with YouTube videos that promoted terrorism or anti- Semitism.

That report led the British government, The Guardian newspaper, and Havas - the world's sixth-largest advertising and marketing company - to pull ads from Google's display ad network and YouTube.

While the shift to online video viewing has favoured YouTube, Google is now scrambling to reassure companies and ad agencies they have made the right decision to spend money on the site, and convince them YouTube will protect their ads from offensive material in the future.

The advertising controversy has seen US$26 billion (S$36.4 billion) knocked off parent company Alphabet Inc's market value this week, according to Bloomberg.

While search represents the lion's share of Google's advertising revenue, which was US$79.4 billion (S$111 billion) last year, large advertisers tend to spend more heavily across California-based Google's video and display advertising network.

Google attempted to curb the controversy on Monday, pledging publicly to roll out new controls for marketers.

In a memo sent to partners later in the week, Google described more detailed changes, including a new video verification process, long sought by advertisers, and a staff hotline dedicated to brand safety. Another feature Google promised will use machine learning, a type of artificial intelligence, to flag suspect videos.

The new approach would now yank ads if offensive language appeared on a T-shirt in a video, for instance, something that didn't happen before, according to the memo.

Google aims to implement most of the changes by Sunday, according to the memo, a copy of which was obtained by Bloomberg. A Google spokeswoman declined to comment on Friday.

Even if the company meets that deadline, however, it may struggle to solve the issue. While TV companies have almost total control over what appears on a given channel, creating a safe space for brands, YouTube opens itself up to anyone who wants to post a video.

Advertisers often buy ads across the whole site, or large groups of popular videos, instead of buying ads for a specific channel. The company has safeguards to block offensive content, but the volume of video being uploaded is too great to identify every infringing video.

YouTube warned as much in its memo. Forthcoming changes "should give (advertisers) confidence that their ads will not appear against inappropriate content," the memo read, "albeit with the volume of content involved this can never be 100% guaranteed."