The YouTube Ad Crisis: Will Big Brands Kill YouTube?

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Advertisers are boycotting YouTube to make a statement. It’s not just a couple of them, either. It’s more than 250 brands. Brands like PepsiCo, Starbucks, Wal-Mart, and McDonald’s have pulled their advertising from YouTube. It has been estimated that it could be costing Google, who owns YouTube, $750 million. Others have said this controversy won’t really hurt Google because YouTube is only about 10% of the company’s revenue. What happened?

Well, advertisers noticed that their ads were running alongside content that they did not agree with. The controversy started in Britain. Brands pulled their ads after an investigation showed that the ads were appearing on videos from terrorist organizations and other offensive content. We can all agree that we don’t want our videos to fund ISIS. However, I don’t think that is a very widespread problem. This might just be a way for these brands to take Google down a peg and get some leverage in their negotiations.

Whatever it is that these brands may be objecting to, they are demanding more control over where their ads are going to be placed. This is not a new problem. Advertisers have been pulling ads ever since ads were created. This is not an easy problem for YouTube to fix. With over 400 hours of video content uploaded to YouTube every minute, it is not like a TV or radio network; which only has a few shows per day to curate. All this video inventory that YouTube has is hard to sift through to ensure that it won’t somehow offend someone. YouTube says they are taking steps to fix this and have apologized for this happening.

Free Speech

What does this mean for free expression for YouTubers? YouTube has said that they will be taking a tougher stance on opinions that they don’t agree with and demonetizing videos that fit into this ambiguous list of rules that they have created. A quick look at most music videos will make you wonder how those passed all of YouTube’s rules but why other less offensive content is flagged. Demonetization is a fancy word for ‘no longer running ads alongside your video and allowing you to make money from that video.’

One YouTuber said he noticed demonetization around a video that he created where he talked about race issues. YouTube has a system where creators can appeal these demonetizations. It will be harder for people who talk about the news, pop culture, politics and social issues on YouTube. There has been a lot of reports that right-leaning political content has been restricted more than other types of content. It is important to remember in all of this that YouTube has the right to block any video they want because they are a private company, just like these brands or people have the right to not to do business with YouTube.

What brands can do now…

Some of these advertisers are not using YouTube tools that could fix some of the problems they’re having. You can do exclusions to tell YouTube which content you don’t want to be a part of. You can do negative targeting. Which gives you a list of you can avoid running ads against, such as social issues, sexually suggestive content and more. Built into the system, there is already a way to remove 99% of the issues these brands are boycotting. This isn’t all the brands’ fault. The ad buyers play a part in this because they are lazy and don’t want to go through the extra work.

Creators are worried…

YouTube creators like to over react but they have reason to be worried here. YouTube doesn’t pay creators a lot but this will impact videos made by small creators the most. Making a living from YouTube ads alone is very difficult. Creators who want to talk about news, pop culture, politics and social issues will have to move to fan funding to continue to make their video content. This is a good reminder for content creators. They need to create a system to move their audience to a system that they control. YouTube, Facebook or Amazon could make a change could destroy your business. So make sure you have multiple ways to make money. Things are always changing in business. This should also concern YouTubers as to what this all means for free speech on YouTube.

Values vs the bottom line…

Brands are flexing their buying power to make YouTube change. It will be interesting to see how long brands can hold out before they realize just how important YouTube is to their bottom line. This is a great opportunity for brands that are less worried about making a statement and more interested in making it easier for a customer to make a purchase. YouTube has over a billion users, who watch a billion hours of YouTube videos every day. Do you think if this continues that YouTube will need to lower their ad rates? Will YouTube cater to viewers or advertisers?

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