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YouTube Hate-Speech Ad Fallout Continues: U.S. Advertising Trade Group Urges Google to Rectify ‘Crisis’

PepsiCo, Walmart, FX, GM, Dish, JP Morgan, J&J, Lyft among latest advertisers to pull ads from internet video site

More big advertisers have joined the YouTube exodus over concerns that their commercials have appeared in extremist hate-speech videos, and as the crisis spreads the head of the Association of National Advertisers on Friday urged Google to take steps to guarantee the safety and reputations of its members.

On Friday, FX Networks said it was pulling all ad spending with Google and YouTube, while PepsiCo, Walmart, Dish Network said they were pulling all Google advertising except search ads, the Wall Street Journal reported. Starbucks and GM said they were suspending ads on YouTube, according to the Journal.

That came after JP Morgan Chase & Co., Johnson & Johnson and car-hailing service Lyft on Thursday confirmed that they are suspending ads on YouTube over the issue. They join AT&T, Verizon, GSK, Enterprise and more than 250 British advertisers in freezing spending on YouTube, with some also pulling out of Google’s display-advertising network.

Advertisers are justifiably alarmed at the fact that their commercial spots are running in hate-spewing videos, and they’re likely to seek leverage in negotiations with Google and YouTube over ad deals going forward.

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“Johnson & Johnson has decided to pause all YouTube digital advertising globally to ensure our product advertising does not appear on channels that promote offensive content,” the healthcare products conglomerate said in a statement Thursday. “We take this matter very seriously and will continue to take every measure to ensure our brand advertising is consistent with our brand values.”

Google has publicly stated that it’s taking a number of steps to make sure ads are not placed against offensive content. The internet giant’s chief business officer, Philipp Schindler, said in a blog post earlier this week that Google is improving the controls and reporting tools advertisers have about where their ads are displayed. He said the company also is hiring more staff and developing artificial-intelligence algorithms to better identify hate speech.

That hasn’t mollified the concerns for several major advertisers. Bob Liodice, CEO of the Association of National Advertisers, said that Google as well as other digital advertising platforms must do more to make digital advertising absolutely safe for brands. “Brands choose those platforms to work hard for them to achieve all of their business and brand building objectives. But the most important of those priorities is ‘to do no harm,'” Liodice said.

Liodice said that the decisions by some members of the ANA — which represents about 1,000 companies that spend or support more than $250 billion in marketing and advertising annually — to suspend advertising on YouTube and other Google networks were “rational, appropriate and warranted.”

“ANA strongly believes that brand safety is of paramount importance to our members,” he said, adding, “The current crisis is representative of the issues that ANA — and others — have raised with respect to fraud and risk, reduced transparency, sub-optimum measurement and nebulous productivity.”

In an interview with Fox Business Network on Thursday, Alphabet chairman Eric Schmidt said that with the additional manpower Google is allocating to the issue and by tightening up its policies, “I think we’re going to be O.K.”

“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,” Schmidt told the news network.

Wall Street analysts, for now, do not expect the YouTube advertising issues to have a material effect on the overall financial health of Alphabet, which is Google’s parent company. “Unless the bad press causes people to stop using Google services (unlikely), then our estimates should not be meaningfully impacted,” Pacific Crest analyst Andy Hargreaves wrote in a research note.

The backlash began last week in the U.K., after a report by the Times of London revealing that some ads from large advertisers were appearing against YouTube videos posted by American white nationalists, anti-gay preachers and radical Islamic groups.

YouTube has more than 1 billion daily visitors, representing almost a third of all internet users, and every day people watch hundreds of millions of hours of video on the service. YouTube’s community guidelines already broadly forbid users from posting hate speech, as well as other content like pornography, but enforcement of those policies often requires human intervention.

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