Brands Blindsided Monetizing Hate Videos Boycott YouTube

The YouTube Boycott will likely cost Google Alphabet at least a billion dollars.
The YouTube Boycott will likely cost Google Alphabet at least a billion dollars.

I. What Happened?

Major media has been receiving screenshots of major brands showing advertisements along with violent and extremist YouTube video content. The screenshots are being fed to the media from a discrete source and have taken over Twitter and news sites since approximately Monday, March 20, 2017.

II. The Perception Problem

The YouTube viewer (of extremist content) sees a major brand advertising, and effectively monetizing, the presentation of extremist content on YouTube. The implication is that Starbucks is A-Ok with content a bit less extreme than ISIS beheadings.

While obviously a company like Starbucks or Johnson & Johnson is not personally selecting videos to display their ads on*, the public can interpret their ads as ‘guilt by association.’ The result has been the single greatest brand exodus from the digital media market, probably ever.

III. Brand Reaction

Since the YouTube story ‘broke’ (see VIII for why this is in quotes), the boycott backlash has been fast gained momentum with more and more major brands pulling advertising from YouTube. The following boycotts lists were compiled Monday, March 27 at 8:00pm ET from USA Today and Forbes, and are not complete:

Boycott List, US:
PepsiCo
Starbucks
Verizon
AT&T
Johnson & Johnson
Lyft (a top detractor in last month’s #DeleteUber controversy)

Boycott List, UK:
Toyota
McDonald’s
L’Oreal
HSBC
RBS
The BBC
The Guardian newspaper
Retailer Marks & Spencer
Lloyd’s of London
Audi
The global advertising agency Havas
Tesco
Volkswagen
Sainsbury
The British government

IV. Content Crush

YouTube reports 400 hours of content are uploaded to YouTube every minute. As of February, YouTube is already streaming one billion hours of content every day. The volume of material YouTube is collecting; monetizing with advertising; and streaming to consumers is far beyond the human capacity to deal with it. Algorithms are necessary to process video for posting in a timely manner. The downside is that the algorithms are not equipped to judge all the values present in the diversity of this content. Facebook has been dealing with similar issues as Facebook Live streaming service has attracted a large share of violent content.

V. The Algorithms Are Failing Right Now

Google began with a comparatively simple task that, at the time, blew everyone’s mind: Use algorithms to index and organize mostly written content on the web for effective search results. As the analysis of content becomes more complex, algorithms have not been able to adequately identify controversial content in a timely manner. The result is that unvetted content is being served alongside advertisements from advertiser accounts, without consideration to the implications involved.

VI. Projected Financial Fallout Contained (Mostly Because Google Is Enormous)

This advertising boycott will hurt, but, unless the problem spreads unchecked, Alphabet, Google’s parent company, will survive relatively unscathed. With YouTube revenue last year coming in at $5.6 billion, just 8% of Alphabet’s total revenue of $73.5 billion , the economic fallout is predicted to be relatively contained. The Hollywood Reporter reports that “At most, RBC Capital Markets analyst Mark Mahaney said he expects the YouTube ad boycott to trim Alphabet’s net revenue by about 2 percent this year.”

Google has reassured advertisers of its commitment to solving the problem, but most advertisers are sticking to their boycott until Google can guarantee their ads won’t be served on violent content. The algorithms just aren’t there yet, so there’s no quick fix. Long term, this will likely make the problem a temporary setback as Google works to analyze and approve content before serving ads.

VII. UK Government on Friday, March 24: Google and Facebook Could Be Prosecuted

The government seems to be implying this content should never be posted in the first place. Theresa May’s official spokesman said, ““The fight against terrorism and hate speech has to be a joint one. The government and security services are doing everything they can and it is clear that social media companies can and must do more.” The government is critical of the 24 hours after reporting videos are left online. Here’s the full Telegraph UK exclusive story.

VIII. The Story Behind The Story

The problem of YouTube serving ads on extremist and violent content has been a known problem in the media for over a year. Today, Ad Age broke a major unreported part of this story: Eric Feinberg, a “longtime marketing-services executive,” is the man behind Google’s “brand safety crisis.” He has been feeding major media this story with screenshots in order to foment attention to this crisis. He also has the “patented fix,” possibly offering Google a shortcut solution to a persistent problem. Read more of this story within a story at AdAge.

The crisis itself, like most major crises in this field, is actually leading the development of industry practices. Flood will be bringing the key information to you here as these important stories unfold.

*Last Monday’s article in Stratechery has a decent breakdown of the mechanics of how agencies buy ads for clients in the digital age. Like most social media markets, this process is far from uniform and is constantly evolving, even as the rules of the traditional media are breaking down with equal velocity.

 

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