By Sarah Oliver,
Money and Investing Writer
Online advertisements are a great way for companies to reach different market segments based off of internet user’s browsing history. It is impossible to notice the numerous advertisements that appear on all forms of social media, which are connected to recent google searches made by the user.
While this mostly yields positive results for companies, recent news has posed potential problems for those who advertise through Google (NASDAQ: GOOGL). The Guardian has pulled advertisements from Google. This occurred after the company discovered their ads were being displayed at the bottom of an extremist video. Others including AT&T (NYSE: T), Coca-Cola (NYSE: KO), and Walmart (NYSE:WMT) followed suit after discovering their advertisements were displayed on other Youtube videos on questionable topics such as racism and terrorism.
Hamish Nicklin, the chief revenue officer of The Guardian says that the reason for advertising through Google and Youtube is their “dominance in the space” of advertisement. The company also believes that the appearance of their ads on these videos are due to a lack of effort in controlling where they show up.
Google makes a percentage off of the companies that choose to advertise through them. The company claims that due to the large amount of advertisements that they have partial control over, it is difficult to monitor where everything goes on the internet.
The company gave a statement saying “While we recognize that no system will be 100 percent perfect, we believe these major steps will further safeguard our advertisers’ brands and we are committed to being vigilant and continuing to improve over time.” It is estimated that the company lost about $750 million in revenue due to pulled ads.
With the decline in advertisements being controlled by Google, advertising agencies have seized the opportunity to explain their importance in the marketplace. A Wall Street Journal article discusses the efforts TV networks will take to increase awareness of the safety behind advertising through television instead of on the web. Bill Abbott, the CEO of Crown Media, which owns Hallmark channels, says they would be “foolish not to lean into” the mistake Google has made. While this may cause a slight increase in advertising profits made by television companies, the truth is that younger generations are watching less and less TV and consistently using the web more and more.
If Google continues to increase awareness of where advertisements are being displayed, it is almost guaranteed they will be able to come back from any loss incurred.
A version of this article appeared in the Tuesday, April 4th, 2017 print edition.
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