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A BBC survey recently uncovered dozens of videos on YouTube promoting fake cancer treatments. According to the survey, ads for some of the world's biggest brands, including Samsung (SSNLF), have appeared alongside YouTube videos on fake cancer treatments. Google (GOOGL) owns YouTube.
Big brands boycotted advertising on YouTube at the expense of content
Samsung is a major customer of advertising companies like Google. According to Ad Age, Samsung and Procter & Gamble (PG) are the largest advertisers worldwide.
In 2017, several major brands boycotted YouTube advertising after their ads ran alongside inappropriate videos on the platform. It took a lot of persuasion and commitment to crack down on Google's dubious content to bring back customers. Some customers, such as AT & T, stopped advertising on YouTube for two years.
Some companies have threatened to stop advertising on platforms that jeopardize their brand's reputation. Procter & Gamble, for example, talked about transferring its advertising dollars to platforms that can guarantee the security of its brand.
YouTube's problems could be expensive for Google
Since YouTube is one of the driving forces behind Google's growth in advertising, recent posts could hurt Google. Although Google has ventured into other areas, such as selling cloud services, advertising remains its primary source of revenue. Ad sales accounted for 84% of Google Alphabet parent's total revenue in the second quarter. At the same time, Yandex (YNDX) and Baidu (BIDU) achieved 70% and 73% of their second-quarter revenue from advertising, respectively.
Cut the cord by developing market opportunities for YouTube
While cable cuts reduce the traditional pay-TV audience, brands are adopting digital advertising. Digital video advertising spending in the United States could reach $ 17.6 billion this year and 22.2 billion by 2021, up from $ 15.4 billion in 2018, according to eMarketer. The growing adoption of digital video advertising is a growing market for Google's YouTube.
However, YouTube is not the only player in the video ad game. Facebook (FB) and Twitter (TWTR) are also looking for investments in digital video ads. With the apparent goal of attracting more video advertisers, Facebook has created a dedicated video section, Watch, in its eponymous social network. Twitter said that video accounted for more than half of its advertising sales. Given the competition, Google must protect YouTube from problems that may scare advertisers.
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