Big advertisers Pulling Themselves From YouTube

01/04/2017

Many big brands that were advertising on YouTube are calling themselves out from the video-streaming platform after knowing that their ads appear next to extremists' videos.

It began just after a few days after the March 22 attack outside the British parliament. Hundreds of ISIS-related videos were created and uploaded to YouTube, hailing the onslaught of civilians. Some videos were showing the actions of terrorist Khalid Masood who stabbed a police officer to death, and others showcased the extremists' jihadist messages and scenes of violence.

The problem for those advertisers is that, their ads were shown beside those videos. Ads from reputable brands such as Sony, Honda, Marie Curie and Mercedes-Benz were shown on the videos' pages.

The ads play either during or just before the videos, and generally pay out between $5-$8 per 1,000 clicks. Since advertising revenue is split 55 percent to 45 percent for the video creators, YouTube raised the prospect that marketing spending from western brands is finding its way into the pockets of extremists.

Advertisers are at direct risk in funding creators of hateful, misogynistic or terrorism-related contents.

The expose triggered a storm in the corporate and advertising world. Brands in the UK and Europe, such as: Royal Bank of Scotland, BBC, The Guardian, Marks & Spencer, Tesco, Sainsbury and many others are pulling out their adverts from YouTube. AT&T that was one of the biggest YouTube advertisers in the U.S. is also pulling itself from running ads on YouTube as well as on any of Google's properties.

On its part, Google has been insisting that it has a "zero-tolerance policy for content that incites violence", but the fact that ads continue to appear next to those videos has left advertisers highly concerned.

Mercedes-Benz ads on extremist videoi

Responding to the controversy, chairman of Google's parent company, Alphabet, Eric Schmidt, said that: "What we do is, we match ads and the content, 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. We've had to tighten our policies and increase our manual review."

He emphasis on "manual review" means that YouTube should scale the company's advertising operation as a solution to the problem. But the thing is, more than four hundred hours of video contents are uploaded to YouTube every minute.

Google and competitor Facebook are already owning 90 percent of the growth in the online advertising industry. In its part, YouTube has become one of the fastest growing parts of Google's ad system, which generated $79 billion in revenue in 2016. And this controversy could cost Google around $750 million to $1 billion in 2017.