More Big Names Pulling out from YouTube

Wal-Mart and Pepsi join other big names that have pulled their ads on YouTube after finding their campaigns were placed alongside offensive videos.

YouTube: It’s the Wild, Wild West of video. And it’s been wildly successful at selling ads to brand looking to reach big numbers of eyeballs, to the tune of $11 billion last year.

Until, that is, the recent ad scandal broke.  More big name advertisers are realizing that their ad spend on YouTube could put them alongside racism or hateful videos. They are pulling their ad dollars faster than you can click play.

“Some of the world’s largest advertisers, from Verizon Communications to Johnson & Johnson, stopped spending on YouTube because of concern their ads could appear next to offensive videos,” write Mark Bergen and Lucas Shaw in the Seattle Times.

“More big companies pulled back on Friday, including PepsiCo, Starbucks and Wal-Mart Stores, after The Wall Street Journal reported their ads had been automatically placed by Google next to racist content on YouTube.”

The crisis goes beyond simply the loss in ad dollars, which in itself could be as much as $1 billion according to Therese Poletti in Marketwatch. She notes that one analyst believes the negative stock valuation impact could last through this year and into next unless the issue is resolved satisfactorily … and fast.

“The bigger fear for investors is that an advertiser backlash could spread from YouTube to Google’s overall search business, or cast a pall over YouTube’s planned “skinny bundle” service. Since the story broke, Alphabet [YouTube and Google’s parent company] shares have fallen nearly 4%,” Poletti writes.

Google promised to implement changes to their advertising algorithms by this Sunday, according to company documents. But it may not be enough to heal the damage.

“Even if the company meets that deadline, 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,” Bergen and Shaw note.

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

Can we just say it? One of the biggest benefits of advertising in print is knowing the platform. It’s not a fluid concept, but a real, curated thing with finite edges. Magazine ads have been found to be the least likely to offend, and their engagement can’t be beat. Is the risk of digital worth the reward?