Google shrugs off YouTube controversy as charm offensive wins over advertisers

The brand safety controversy, which saw hundreds of brands pull advertising on from YouTube, has had little, if any, impact on its parent company Google and its revenues.

YouTube found itself at the centre of a scandal earlier this year after an investigation by The Times found that brand ads were appearing next to content from terrorists, white supremacists and pornographers. The issue led to brands including Marks & Spencer, Tesco and RBS pulling ads from the site, with many saying they wouldn’t return until the problem had been solved.

However, the controversy has had little impact on Google’s ad business. Alphabet, Google’s holding company, saw revenues increase 22% year on year to $24.8bn (£19.2bn). And the company said its ad growth was “again driven” by mobile search, “ongoing strength in YouTube” and programmatic.

Speaking on an analyst call following the results announcement, Alphabet CEO Sundar Pichai said Google had been on a charm offensive. He claimed chief business officer Philipp Schindler and his team had made “literally thousands and thousands of calls and in-person conversations”. And he credited this with helping it to allay concerns and “respond thoughtfully”.

“One of the things I’ve noticed is the depth of relationships we have with our advertisers was very evident to me as we went through this over the past few weeks,” he explained. “I think that deep relationship is what allowed us to respond thoughtfully. And I think the feedback from our partners was very positive and constructive, and I think we are evolving overall to a better place.

“To me that shows the long-term investments you make in these relationships plays well at times like these.”

Pichai claimed Google works “very hard to create the best environment for brands on YouTube”, highlighting its “cornerstone” offering Google Preferred, which allows brands to advertise against the top 5% of content.

READ MORE: Mark Ritson – The brand safety scandal is no one’s fault but Google’s

Google has also unveiled new safeguards for advertisers, including updated ad policies and enforcement, a new default setting around where ads can appear, improved controls for advertisers and third-party brand safety reporting. He claimed brands and agencies “understand how hard we work to create the safest possible environment”.

“I’m pretty confident at the rate at which we have made progress. And we’re going to continue investing a lot here. It is super important to us that this ecosystem works well. It matters for advertisers. It matters for content creators. And so we take that responsibility very seriously,” added Pichai.

WPP boss Sir Martin Sorrell agreed with Google. Speaking on WPP’s own analyst call yesterday morning, he noted that Google has been responsive to brands and agencies’ concerns. However, some are calling on Google to do more.

Speaking at AdWeek Europe last month, Ebiquity’s chief client officer Andrew Challier said both Google and Facebook need to do more so that brands can buy inventory “with confidence”.

He explained: “If you bought a house without seeing every single room on the viewing then you might move in to find out your backyard was a swamp. This is ultimately what’s been happening with Google ad buying; too many brands have been gambling with their money.”