Sunday, 30 April 2017

YouTube's ad problem spells trouble for Facebook – analyst

By Nick Wood, Total Telecom
Friday 24 March 17

'Mad men' reverts to its original meaning as controversial content prompts advertisers to pull the plug.

It is now time for YouTube's "Extremist Hate-Speech Hour", occasionally brought to you in association with, until recently, some of the biggest brands in the world, including none other than AT&T and Verizon, among others. Not any more of course, because the two telcos are among a growing number of prominent companies that pulled their ad spend from YouTube and Google this week, after their adverts appeared alongside extremist material. The wave of withdrawals started to gather pace last week as several European advertisers, including Sky, Vodafone, and O2 UK, pulled their ads. This week, the backlash reached the U…

It is now time for YouTube's "Extremist Hate-Speech Hour", occasionally brought to you in association with, until recently, some of the biggest brands in the world, including none other than AT&T and Verizon, among others.

Not any more of course, because the two telcos are among a growing number of prominent companies that pulled their ad spend from YouTube and Google this week, after their adverts appeared alongside extremist material.

The wave of withdrawals started to gather pace last week as several European advertisers, including Sky, Vodafone, and O2 UK, pulled their ads.

This week, the backlash reached the U.S., prompting Philipp Schindler, Google's chief business officer, to invoke parent company Alphabet's recently-revised mantra, and do the right thing, which in this case meant apologising, and pledging to be better in future.

In a conciliatory blog post, Schindler recognised YouTube's importance for upholding free speech, but also acknowledged that major advertisers don't want their logos to appear next to a stream of invective spewing from the mouth of some deluded scumbag.

Google is supposed to be able to automatically filter out dodgy content when placing adverts, which is no easy task when 400 videos per minute are uploaded to YouTube, but it seems there is plenty of room for improvement.

"Recently, we had a number of cases where brands' ads appeared on content that was not aligned with their values. For this, we deeply apologise," Schindler wrote. "We know that this is unacceptable to the advertisers and agencies who put their trust in us."

While all the negative publicity this week has been directed at Google, according to telecoms analyst and Radio Free Mobile founder Richard Windsor, another ad-funded Internet giant has greater cause for concern.

Facebook faces "a much more serious problem," he claimed.

Google's advances in artificial intelligence means it is well equipped to trawl through a vast amount of content and filter out extreme material, but the same cannot be said for Facebook, he said.

Facebook is already working on tools to flag up potentially fake news, and has added warnings to graphic content, but Windsor claims it is still "far behind its global peers when it comes to AI.

"This means that while it is sitting on the world's second-largest treasure trove of data, it is unable to understand what most of it is and is therefore unable to weed out content that is objectionable to its customers."

Potentially alienating advertisers represents a much more serious issue for Facebook than Google, Windsor said.

He estimates that YouTube and display advertising accounts for around 12% of Google's gross revenues. At Facebook, advertising accounts for a much larger chunk of turnover.

If and when a backlash against ads appearing alongside extreme content hits Facebook, "it will hit much harder and it is likely to last longer," Windsor warned.

It is also worth considering that because Google is the first to face this kind of public crisis, it can reasonably be expected to be the first to address it and move on.

Schindler said Google has pledged to crack down on hateful, offensive and derogatory content.

"This includes removing ads more effectively from content that is attacking or harassing people based on their race, religion, gender or similar categories. This change will enable us to take action, where appropriate, on a larger set of ads and sites," he said.

"We'll be hiring significant numbers of people and developing new tools powered by our latest advancements in AI and machine learning to increase our capacity to review questionable content for advertising," he continued.

"In cases where advertisers find their ads were served where they shouldn't have been, we plan to offer a new escalation path to make it easier for them to raise issues. In addition, we'll soon be able to resolve these cases in less than a few hours."

One major industry player that has also been busy in the advertising world this week is Altice.

The multinational cable group on Tuesday struck a deal to acquire online video ad specialist Teads, in a deal valuing the company at €285 million.

Teads is a marketplace that sits between brands and publishers, placing the former's adverts alongside the latter's content. It claims to reach an audience of 1.2 billion. It is not a YouTube; it does not have to deal directly with nutters uploading abhorrent material to the Internet.

In a statement, Altice CEO Michel Combes said the deal "will enable us to offer a truly unique value proposition to brands and agencies on the one hand, and the media industry, programmers and distributors on the other."

Based on Google's experience this week, Altice might just also be having a quick glance through the list of 8,000 'specialist publishers' on Teads' books, just to be on the safe side...

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