Youtube advertiser boycott could cost Google millions

Google is facing international backlash with the Youtube advertiser boycott. Advertisers are boycotting Youtube to prevent their advertisements from appearing next to extremist content. Many high profile brands, such as McDonald’s and LO’real, have appeared next to hate speech and are subsequently campaigning for better moderation. Advertisers have frozen their contracts with parent company Google and it could end up costing the search engine millions.

A note from analysts from Nomura Instinet, one of the largest brokers in the electronic market, stipulated that Google is set to lose a lot of money if the company doesn’t make a move to get these advertisers back. The whole boycott is set to cost Google USD$750 million.

Due to the fact that 250 brands worldwide have cancelled their affiliation with YouTube advertisements, Google has implemented changes to its advertising moderation, such as employing more people for content control and updating the rules to help remove questionable advertising.

The note has said that, despite these changes, “Ad buyers are likely to demand greater direct control over ad placement, which could take time and resources to implement”.

However, notes from Wall Street analysts RBC Capital Morgan and Morgan Stanley have downplayed the potential issues of the boycott, mentioning that it won’t even have an impact on Google and its huge business. According to the note, YouTube ads only make up 10% of Google’s whole net revenue.

The search advertising, which makes up a huge amount of Google’s revenue, has not been impacted by the ban. It’s a positive sign that Google has implemented changes, such as tougher advertising policies and increased control for marketers, to ensure that advertising remains free of hate speech.