Google's Ad Rivals Leap at Chance to Seize Dollars After YouTube Controversy
(Bloomberg) -- Weeks after scores of advertisers boycotted YouTube, Google is still trying to mitigate the damage. Meanwhile, long-struggling competitors in the digital ad market are seizing the moment.
MediaMath Inc., a New York-based seller of software for automated online ad buying, is introducing a new service to ensure that ads only run alongside hand-picked, "high quality" content. The "curated market" offering comes amid concern over some big brand ads appearing against racist, violent and offensive YouTube videos.
"We're developing for the largest brands in the world who need to be assured of a safe environment for digital advertising," said Erich Wasserman, MediaMath's co-founder. "We're happily able to do this at a time when the market is shouting for it."
Google has tried to silence the shouting. After the first wave of advertiser defections, Google introduced new controls to address the problem. When more advertisers left, Google added even more features and shifted resources into new technology that flags offensive videos and disable ads on them.
Most analysts believe the YouTube boycott will have minimal impact on Google sales. Its draw is too large to keep advertisers away permanently, and the boycott has not stopped search ads, Google's bedrock. Yet some marketing agencies and advertisers are reevaluating buying plans, cognizant of the harm poor ad placement can cause. That adds pressure on Google, Alphabet Inc.'s biggest division.
"If you can create a driverless car and artificial intelligence, you can figure out how to keep a brand safe," Marc Pritchard, Chief Brand Officer of Procter & Gamble Co. told Bloomberg News in an advertising conference last week in Los Angeles.
On Wednesday, NBCUniversal announced a deal with mobile ad company Kargo Global Inc. to place ads on 300 premium digital properties from 70 media companies. Convincing advertisers to pay up for premium content was a feat, given the discounts and wide distribution that giants like Google offer, said Kargo Chief Executive Officer Harry Kargman. The YouTube boycott was a gift. "We were prepared for a drawn out fight," he said. "Basically, the market has done it for us."
MediaMath, too, views its new service as responding to a market shift. The YouTube crisis wasn't just a backlash against Google, it was a protest against the pitfalls of automated advertising in general -- the systems and services that let marketers accurately target consumers but also sprinkle ads everywhere across the web. MediaMath said its new service will limit that sprinkling, sending ads to websites and online videos that it constantly monitors for quality.
The company said it has 7,000 advertisers and 500 publishers on board with the service, although it declined to share its pricing or early revenue figures.
It's likely that shifts in digital spending away from Google, if any, would not appear until later in the year. However, some ad companies said they were seeing efforts to realign spending now to avoid the YouTube fracas. Charles Gabriel, president of Apester, which makes interactive software for publishers, said that over the past two weeks marketers began requesting safety controls on all online videos where they run ads.
Google executives have argued that, given YouTube's size, brand safety guarantees for every single video are impossible. But they've reassured marketers the issue will subside.
Tara Walpert Levy, Google's vice president of agency and media solutions, told the audience at the Los Angeles conference that many advertisers that left over the issue have returned. But only Johnson & Johnson has said so publicly.
At the conference, attitudes about the YouTube scandal were mixed. Some echoed P&G's Pritchard. But others dismissed it as an inflated scandal, driven by the television industry, which is hosting its annual ad price-negotiation conference soon.
Michael Roth, head of ad giant Interpublic Group of Cos., admitted as much on stage. Much of the YouTube hubbub, he said, was a behind-the-scenes negotiation from the older industry to compete with technology upstarts.
That leverage, along with pressure from others, is necessary given the rising digital dominance of Google and Facebook. "When it's a duopoly, you always root for someone else to keep them honest," he said.
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