San Francisco - Google’s advertising crisis went global
after some of the biggest marketers including AT&T and Johnson &
Johnson halted spending on YouTube and the internet company’s display network,
citing concern their ads would run alongside offensive videos.
The controversy erupted last week after the London-based
Times newspaper reported that some ads were running with YouTube videos that
promoted terrorism or anti-Semitism. The UK government and the Guardian
newspaper took down ads from the video site and Havas SA, the world’s
sixth-largest advertising and marketing company, pulled its U.K. clients’ ads
from Google’s display ad network and YouTube.
On Wednesday, the boycott spread across the Atlantic as US
companies that are among the heaviest ad spenders pulled back, potentially
costing Google and YouTube hundreds of millions of dollars in lost
business.
AT&T and Verizon Communications, the largest US
wireless carriers, said they had stopped non-search advertising spending with
Google. Johnson & Johnson, the world’s biggest health-care company, paused
all YouTube advertising globally.
“We are deeply concerned that our ads may have appeared
alongside YouTube content promoting terrorism and hate,” a spokeswoman for
AT&T said in a statement 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’s
also started an investigation, Sanette Chao, a Verizon spokeswoman, said in a
statement.
Search represents the lion’s share of Google’s
advertising revenue, which totalled $79.4 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 $941.96 million in 2016, according to Kantar Media, and
Verizon is number three.
Read also: Google to clamp down on hate videos
Google’s network business, which serves display ads on
other websites, generated $4.4 billion in fourth-quarter revenue, about 20
percent of the company’s total ad sales. While YouTube revenue isn’t reported
separately, analysts estimate the video site brings in billions of dollars each
year, and say it’s among Google’s fastest-growing businesses.
“American advertisers making statements will cause
American investors to pay infinitely more attention to an issue that is already
gripping much of the industry,” said Brian Wieser, analyst at Pivotal Research
Group, which downgraded Google parent Alphabet Inc.’s stock on Monday over the
issue.
Google tried to head off the backlash this week,
implementing new tools and policies. But many advertisers were waiting to see
further details or results, before placing ads again.
Sainsbury’s, the British Broadcasting, Toyota Motor,
Volkswagen and Havas each said Wednesday that their decision to pull ads from
YouTube hasn’t changed following Google’s announcements.
Brentford, UK-based GlaxoSmithKline, one of the biggest
drug makers, joined the boycott on Wednesday.
"The placement of our brands next to extremist
content is completely unacceptable to us and we have raised our concerns
directly with Google," the company said. "We are encouraged by
Google’s steps over the past few days."
A representative for Google declined to comment on
individual customers.
“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,” the representative
said. “We’re also raising the bar for our ads policies to further safeguard our
advertisers’ brands.”