(Reuters) – U.S. healthcare conglomerate Johnson & Johnson (N:JNJ) and JPMorgan Chase & Co (N:JPM) had become the latest big U.S. companies to suspend all digital advertising on Google's YouTube, over concerns it’s ads could possibly have appeared on channels that broadcast offensive videos.
Wireless carriers Verizon Communications Inc (N:VZ) and AT&T Inc (N:T) said on Wednesday they can suspend digital ads on YouTube, joining an index of well-known British brands just like retailer Marks and Spencer Group Plc (L:MKS) that happen to be deserting Alphabet Inc's (O:GOOGL) Google.
Google has come under intense scrutiny for ads appearing alongside videos online carrying homophobic or anti-Semitic messages. The company vowed an overhaul of their practices and said on Wednesday they have started an extensive review of its advertising policies.
Shares of Google parent Alphabet ended down 1.2 percent, or $10.15 per share, at $839.65 to the New York Stock Exchange.
Control over online ad placement has developed into hot-button issue for advertisers, with social support systems and news aggregators coming under fire during and after the U.S. presidential election for spreading fake news reports.
Advertisers have in addition sought in order to avoid having their brands appear beside content which they categorize as hate speech.
J&J said on Thursday it desired to make sure that its product advertising wouldn’t show up on channels that promote "offensive content."
JPMorgan, the most important U.S. bank by assets plus the biggest issuer of general purpose bank cards, suspended most of its ads from YouTube on Thursday, reported by spokeswoman Trish Wexler.
The bank spends about $3 billion on marketing each and every year.
YouTube is really a key driver of growth for Google as its traditional business of search advertising matures. Google's net ad revenue worldwide from YouTube was $5.58 billion last year, as outlined by New York-based research firm eMarketer.
While big companies suspending advertising online can be a page rank pain for Google, the suspensions tend not to affect Google’s biggest ad product, search.
According to eMarketer, Google’s 2019 global ad revenue is projected to get $73.75 billion, grabbing 62 percent in the $99.62-billion search market. Search is the reason 83 percent of Google’s overall ad revenue.
The financial hit is less certain because digital platforms often collect the majority of their revenue from small-to-medium sized companies who can’t afford to get in the media.
“Digital attachment to the long-tail of advertising clients means that while major advertisers like P&G or agencies like Havas can publicly protest, they do not have identical effect on a Google or even a Facebook (NASDAQ:FB) as they simply placed on a CBS or NBC," analysts at MoffettNathanson wrote on Thursday.
"In other words, if the major brand marketer or agency moves money to TV and outside of digital, it industry will spot the benefit whereas digital industry would possibly not actually feel it.”