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Google’s advertising scandal highlights industry-wide dilemma

Tuesday, March 21, 2017 2:57
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Google’s advertising scandal has brought to light the challenges the industry faces as a whole.

The company’s European boss Matt Brittan apologised to clients yesterday after several brands pulled advertising from the search engine and its YouTube channel over extremist content.

Marks & Spencer Group (LON:MKS), the BBC, HSBC Holdings plc (LON:HSBA), Lloyds Banking Group plc (LON:LLOY), L’Oreal and Audi are among the companies that have suspended marketing on Google and YouTube after their ads were placed next to videos that advocate terrorism.

YouTube pays £6.15 of advertising revenue to those who post videos, which means companies have been inadvertently funding terror groups.

Speaking at the Advertising Week Europe event in London, Brittan said: “I want to start by saying sorry.

“When anything like this happens we take responsibility for it.”

Google plans to make changes to its technology in the coming weeks to give brands more control over where their ads appear.

The group is also reviewing its advertising policies and will adjust how it controls and enforces appropriate content on its platforms.

“We have a review under way on how we can improve. We are accelerating that review,” Brittan said.

Industry-wide dilemma…

The issue at Google highlights a broader problem for the online advertising sector, which has been expanding rapidly in a digital age.

Advertisers are using algorithms to automatically buy, sell and place ads as it is easier to place marketing across a vast amount of online content and digital videos. Add to that the growth in smartphone ownership, which has 2.7 billion users and is expected to rise to five billion by 2020.

However, the use of such programmatic advertising has led to the kind of complications that Google is facing. The problem with automatic advertising is that it chases audiences without checking what sites they are using.

Matt Scheckner, founder of the Advertising Week Europe, said one of the biggest challenges to advertisers right now is to “make sure your advert doesn’t end up next to a recruitment video for Isis”.

Matt Kelly, chief content officer of regional newspaper group Archant, said at the event that it was no surprise that ads were appearing in unwanted places. He said it has been an “open” secret” in the sector for some time.

“The idea that nobody has twigged that these ads were appearing next to dodgy content is frankly not believable. Of course they realised this, it’s at the heart of programmatic advertising,” he said.

Solutions but at a cost…

While there are a number of solutions to preventing the issues that automated advertising brings, brands are reluctant to spend money amid the uncertainty of Brexit.

Advertisers could blacklist websites, hire staff to vet websites or create a ‘white-list’ of so-called approved sites. But this isn’t cheap.

“We all want the cheapest [advertising],” said Unilever‘s chief marketing officer Keith Weed, “but it comes at a cost.”

Political agendas…

Aside from extremist and inappropriate content, advertisers are also becoming more wary of placing marketing on websites that have political agendas.

Nick Flynn, senior vice president at Shutterstock, the stock photography, image and music provider, said brands and advertisers have started taking sides on issues such as immigration, the US elections and Brexit.

Last October, Lego pulled its promotional giveaways with the Daily Mail due to its divisive coverage of migrants. The move was part of a wider-campaign aimed at stopping businesses from advertising with some newpapers that take sides on the immigration debate.

Story by ProactiveInvestors


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