YouTube takes another hit from Advertisers

In the past week or so companies have been pulling their advertisements from Google's YouTube . To quickly summarize the situation for those unfamiliar with it, the British newspaper The Times' investigation revealed advertiser's ad appeared on content deemed inappropriate. Once the news spread of these glitches in YouTube's advertising algorithm, companies such a Coca-Cola suspended their advertising.

Recently, this past week

New Jersey-based Johnson & Johnson said in a statement last week that it has decided to "pause all YouTube digital advertising globally to ensure our product advertising does not appear on channels that promote offensive content."

Not only is Johnson & Johnson suspending their advertisements on YouTube , but so are Detroit-Based GM and PepsiCo. This story continues to develop as stated by the Los Angeles Time that last week the following US companies began following suit,

with giants such as AT&T Inc, Verizon Communications Inc. and rental car firm Enterprise Holdings Inc. announcing that they will halt or reduce deals with Google, which owns YouTube.

So, what has Google said about this situation? Google has stated that it has begun an extensive review of its advertising policies. As well, Google has released in a statement,

While we recognize that no system will be 100% perfect, we believe these major steps will further safeguard our advertisers' brands and we are committed to being vigilant and continuing to improve over time."

Google's YouTube depends on revenue from advertisements to continue to operate, not only for themselves but the millions of creators on the platform. If this continues, YouTube and those who use YouTube as their means of living might have to search out new ways to generate revenue.

Source:
Youtube takes another hit

Questions
1. Do you believe that this could force YouTube to reinvent the way it generates revenue?
2. Will this just be temporary as Google adjusts its advertising or could this be long-time?

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (14)

Best Response
Apr 3, 2017 - 9:59am

These advertisers are morons. This is what happens when you advertise online. Google and YouTube cannot control everything on the internet. I'm sure the vast majority of stuff on YouTube is kosher, but occasionally something slips through.

I'll literally surf another tab to avoid watching or listening to any commercial.

  • 3
Apr 3, 2017 - 10:06am

A lot of this started when the WallStreet Journal wrote that article on PewDiePie (Biggest YouTuber by subscribers). There are talks and few posts about how the author of the WSJ post photoshopped his evidence. Even though it may or may not be true, advertisers should know that nothing is perfect. Granted that of course many of these advertisers would drop their ads for anything that could lead to negative publicity. It just sucks for the creators who are now losing money thanks to this.

Just an Undergrad trying to get a job. Something you disagree or dislike about my posts? Let me know by PM'ing me or commenting constructive criticism.
  • 1
Apr 3, 2017 - 10:40am

Agree. We're seeing an old business model adapting to the vagaries of current time.

I'm sure it's some political group watching YouTube all day, waiting for an ad to hit during an offensive video.

Apr 3, 2017 - 12:46pm

The ad and the video should not be looked at as one in the same and I'm frankly pretty confused why these companies would even care. I couldn't tell you a single ad that I saw after watching a certain video on YouTube that I wanted. I'll most likely just skip through it once 5 seconds goes by.

Apr 5, 2017 - 4:14pm

Come now, surely you've cruised the Hollywood Hills in your Lamborghini after a nice evening reading books in your garaaaaaage to get knowledge?

Be excellent to each other, and party on, dudes.
  • 1
Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Apr 5, 2017 - 9:45am

At the end of the day YouTube should just hold it's ground. Wall Street Journal and the SJW police are trying to save their archaic business model by spouting the "hate" card that the younger generation whole heartedly rejects. At the end of the day advertisers are going to come flocking to YouTube for their 2 billion views and the fact that 20% of YouTube viewers receive their news exclusively through YouTube.

Apr 5, 2017 - 3:22pm

When they say "inappropriate" are they talking about Jihadist beheading videos or are they talking about political speech that some people don't like? Because those are two vastly different things.

Array

  • 2
Apr 5, 2017 - 6:04pm

Apparently both. A couple of Jihadist websites had the adwords, and some far-right groups too.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Apr 5, 2017 - 7:51pm

The article from the WallStreet Journal showed photos of YouTube videos with the title containing the N word. Then it showed Pepsi, and a few other large companies playing ads on this video. I also have seen what @Frank Quattrone" mentioned.

Just an Undergrad trying to get a job. Something you disagree or dislike about my posts? Let me know by PM'ing me or commenting constructive criticism.
Apr 5, 2017 - 6:05pm

No, it's Proteus , the Potato Poo Monster. Next time, don't swallow that baked potato whole.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Apr 5, 2017 - 7:49pm

Nope, completely different person. I'm Ebola-Free.

Just an Undergrad trying to get a job. Something you disagree or dislike about my posts? Let me know by PM'ing me or commenting constructive criticism.
Apr 6, 2017 - 5:04am

Accusantium suscipit quam dolorem qui totam. Ducimus dignissimos eius doloribus sint. Aut omnis et velit aut beatae.

Et unde necessitatibus inventore. Omnis deserunt quos qui. Ut quo quo ipsa repudiandae quo. Aperiam hic blanditiis nihil pariatur in rerum.

Explicabo tempora architecto voluptatem vitae modi velit maxime soluta. Perspiciatis similique quasi eos esse. Officiis ullam et et velit neque officiis neque. Aut veritatis distinctio qui aliquid.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Start Discussion

Total Avg Compensation

September 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (38) $367
  • Associates (218) $232
  • 2nd Year Analyst (132) $153
  • 3rd+ Year Analyst (30) $147
  • Intern/Summer Associate (102) $144
  • 1st Year Analyst (483) $135
  • Intern/Summer Analyst (375) $82