Brands Boycotting YouTube are Missing the Point

Remember the good ol’ days – when an advertiser could run a commercial during, say, The Cosby Show, and sleep easy at night knowing that nothing remotely controversial would be associated with their ad? I mean, sure, the advertisers had to deal with that very special episode of Diff’rent Strokes when Nancy Reagan talked about drugs, or the Family Ties episode where Mallory (maybe?) has sex. But all things considered, it was a good time for brand advertisers – TV was the mass medium, and the content was as vanilla as a Republican congressional intern.

Alas, the world today is so much more complicated than it was in the 80s. For starters, TV is no longer the only mass medium, and probably isn’t the largest mass medium (replaced by online media). And a brand’s ability to enforce brand safety is exponentially harder, given the rise of user-generated content (UGC), the real-time nature of advertising, and the sheer number of advertising channels that require policing.

Last week, this all came to a head when a virtual who’s-who of large brands announced an ad boycott of Google’ YouTube network due to their ads showing up next to offensive or objectionable content. The boycott could allegedly cost Google up to $750 million.

Does any major brand enjoy being show next to a video of an Aryan Nation pep rally – of course not. And I get that companies attribute real financial value to the strength of their brands, so it is reasonable to do everything they can to protect the brand. I’m troubled, however, by this boycott for several reasons.

Problem #1: Brand Safety Will Never be 100% Secure Online, and Advertisers Already Knew This

First, I think there is a large degree of dis-ingenuity at work here. These brands – or at least the agencies that run their ads – know that it is nearly impossible to be 100% successful at identifying and blocking all objectionable UGC (which is 99% of YouTube’s content). Google has very powerful algorithms and an army of human editors, but the sheer volume of UGC is too much for any company – even Google – to fully monitor. To put this in perspective 300 hours of video are uploaded to YouTube, every minute. That’s about 158 million hours of content a year, for those of you who like larger numbers.

As I noted a few weeks ago in The Wall Street Journal, the advantage of online advertising is that you can reach one million Web sites and a billion pages instantly, and the disadvantage is that you can reach one million Web site and a billion pages instantly. In other words, if you want to participate in programmatic advertising – be it YouTube, display networks or Facebook – you have to accept that one of the downsides of massive scale is the occasional ad that shows up on content that you don’t like. While the brand captains at these companies might not understand that, their agencies certainly do, so any hand wringing by the big agencies is just a well-orchestrated CYA performance.

Problem #2: Consumers Judge Brands By Their Actions, Not Their Ads

My second point is that brands are fighting a losing battle if they think that damage to their brand is significantly impacted by what YouTube videos they show up against. First, if there’s a video of an Aryan Nation rally, who do you think is watching it? The only people seeing it are folks who support the Aryan Nation, not the suburban family trying to find a new soap brand. I support the argument that these brands don’t want to provide financial support to causes they don’t like, but that’s not a brand safety argument.

Second, more and more, brand is determined by how a company acts, not where its ads show up. For example, two of the companies boycotting Google last week were HSBC and Volkswagen. Neither of these companies need help destroying their brands, given that HSBC paid a $1.9 billion fine for helping terrorist organizations with their money laundering, and Volkswagen is paying $14.6 billion for creating software to trick emissions tests.

Problem #3: Big Brands Can’t Really Impact Digital Marketing with Boycotts

Lastly, this boycott strikes me as Custer’s Last Stand for big brands. There was a time when brands could dictate terms to their publishers (be it TV or print or any other medium) and the publishers would have no choice but to oblige. In this instance, Google has reacted swiftly to try to placate the advertisers, with Google’s Chief Business Officer noting “we’re in emergency mode.”

I noted earlier that an analyst suggested that Google could lose up to $750 million from a boycott of YouTube. Let’s parse this number a bit. First, overall Google revenue for 2016 was about $90 billion, so this boycott amounts to .83% of revenue. Second, it appears that the analyst concluded – incorrectly – that every dollar of brand advertising pulled from YouTube would result in an equivalent dollar of revenue lost by Google. This is not true, simply because the majority of YouTube’s ad ecosystem is auction-based, meaning that if some participants exit the offer, the price of a given piece of inventory decreases, but it is sold nonetheless. So perhaps that $750 million results in lower bids for the winners of the auctions – maybe to the tune of $100 million. Now we’re talking about an impact to Google of slightly more than .1% of revenue.

Obviously, Google couldn’t just thumb its nose against the brands – not acting would hurt Google’s brand – but as more and more advertising becomes programmatic (and is controlled by either Google, Apple, Facebook, or Amazon), the power of big brands to dictate the rules of the game decrease.

Who Owns the Future? Consumers, and Probably Google

Many years ago, I was angry at Google. Or maybe I was jealous. Whatever the emotion was, I railed against Google’s ever-increasing power, even though as Google grew, so too did my own business. Eventually I learned to stop worrying and love Google. Like any company, Google isn’t perfect, but Google tries a lot harder than most to do the right thing. And from a real politik perspective, fighting Google is just a losing battle, unless your name is Mark Zuckerberg, Jeff Bezos, or Tim Cook.

I’ve also learned that consumers are a lot smarter than many marketers think. The best advertising in the world won’t save a business from horrible ratings on Glassdoor, Yelp, TripAdvisor, or Amazon, or the negative publicity of a major scandal. You probably know that United breaks guitars, but probably can’t remember United’s tag line. That video, by the way, has been seen 16 million times on YouTube. You know what would have saved United from this horrible brand exposure on YouTube? The answer is not “brand safety guidelines.”

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