Google and its video platform YouTube have come under fire in recent weeks for running ads against extremist content. Now one analyst thinks the controversy could slow the company’s growth.
Havas, a major European marketing firm, recently said it would pull its clients’ ads from YouTube and the Google Display Network in the U.K. after ads began running next to “questionable” content, including videos supporting terrorism. Other companies, including the BBC and the U.K. government, have also removed their ads.
Havas told reporters that Google was “unable to provide specific reassurances, policy and guarantees that their video or display content is classified either quickly enough or with the correct filters.”
This comes after Google came under fire when its highest-grossing YouTube entertainer included Nazi imagery on his videos. After the Wall Street Journal made inquiries, Google pulled ads off of the videos but left the content up.
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Matt Brittin, Google’s European head, apologized at an advertising conference on Monday and said the company would improve ad placement. But he declined to say whether Google would actively look for extremist content, instead of waiting for users to flag it, according to The Guardian. Google also put up a blog post on the controversy. It may not quell the controversy: A British politician has said Google is “profiting from hatred.”
One analyst thinks the issue could hurt Google-parent Alphabet’s stock.
Pivotal Research’s Brian Wieser wrote in a note on Monday that the controversy will “curtail global growth this year.” He reduced his rating on Alphabet share to Hold from Buy and lowered his price target to $950 from $970. The stock closed at $867.50 on Monday.
“While Google has apologized for the incidents, and while the scale of the underlying problem may be relatively small in absolute terms, for large marketers, any one instance of an inappropriate brand placement may be enough to seriously harm a brand’s business value,” he wrote.
These types of issues are not exclusive to Google. Facebook and Twitter face their own questions about user-generated content.
Big Picture: Google is trying to reassure advertisers after ads from big brands were featured alongside extremist content. One analyst thinks it could slow Google’s growth.
Date: March 19, 2017