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Trust is the key factor as global firms ditch digital adverts

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'While Google makes the bulk of its money from products such as search, it also makes a sizeable amount from letting third-party publishers use its ad-serving technology such as AdSense and DoubleClick, which allows anyone with a website or blog to make money from advertising'

'While Google makes the bulk of its money from products such as search, it also makes a sizeable amount from letting third-party publishers use its ad-serving technology such as AdSense and DoubleClick, which allows anyone with a website or blog to make money from advertising'

'While Google makes the bulk of its money from products such as search, it also makes a sizeable amount from letting third-party publishers use its ad-serving technology such as AdSense and DoubleClick, which allows anyone with a website or blog to make money from advertising'

The first three months of 2017 have been anything but good for Google and Facebook, the two online behemoths of the digital world, both of which stride the global advertising landscape with ruthless intent and an enviable and slick ability to vacuum up cash at a pace that would make James Dyson's team of engineers green with envy.

An integral part of the daily lives of billions of people around the world, they now stand accused of unwittingly facilitating the funding of radical terrorist organisations and providing the oxygen and platforms that allow the spread of fake-news websites.

In doing so, they have now found themselves under the shocking and unwelcome spotlight after a light was shone on the seedy underbelly of the online world that is often inhabited by jihadist and other terrorist support groups, as well as so-called alt-right and supremacist websites pedalling malicious misinformation and misogyny.

While both companies obviously depend heavily on the number of customers who visit their properties, use their search engines or - in the case of the Google-owned YouTube - watch its videos, the oil that keeps their wheels turning and their coffers piled with cash comes from advertisers looking to reach the billions of people who use their platforms and products every day.

In the case of Google, it earned a jaw-dropping $89.46bn from advertising in 2016. Facebook, by comparison, brought in a more modest but breath-taking $26.88bn. Not since the Industrial Revolution has society witnessed such a rapid concentration of power and money in one particular industry.

Unlike the Industrial Revolution, however, a chunk of this power has been concentrated the hands of just two global companies and leads one to conclude that we are possibly witnessing the emergence of the biggest duopoly in history.

So, when advertisers express concerns that their online ads are appearing beside jihadist videos on YouTube or in the middle of an article denouncing women on Breitbart, the right-wing website linked to one of President Donald Trump's key advisers Steve Bannon, they have a very legitimate reason to be concerned.

And it is precisely this "brand safety" issue which lies behind much of the recent fallout over the first three months of 2017, and has led to advertisers and their agencies either withdrawing entirely or freezing advertising spend until such a time that they can be guaranteed it won't happen again.

What started in the UK several weeks ago - where advertisers such as Tesco, Marks & Spencer and McDonald's halted their spend with YouTube - has now spread to Ireland with Ireland's largest media agency group, Core Media, temporarily pausing all client spend with Google's advertising networks, including YouTube.

This contagion has now spread to the US, the biggest advertising market in the world, where brands such as AT&T and Verizon have also suspended advertising investment on the video platform.

In its defence, Google owned up and said it can and must do better. It blamed the recent YouTube controversies on flaws in the algorithmic verification procedures used to check that content that is uploaded to its platform is decent and does not incite hatred.

It pointed out that these verification procedures were effectively "tricked" and that, in future, more manual intervention will be needed to check content that is published on its networks.

Herein lies one of the big challenges for Google and one which has not been mentioned in any of the coverage on the current fallout.

While Google makes the bulk of its money from products such as search, it also makes a sizeable amount from letting third-party publishers use its ad-serving technology such as AdSense and DoubleClick, which allows anyone with a website or blog to make money from advertising.

Last year, for example, the many thousands of websites in the Google partner network made $15.6bn from advertising. These included anything from personal and specialist blogs, to sites such as Breitbart, and YouTube channels run by jihadists, to large and trustworthy news organisations.

Of this, $10.9bn went directly to the publishers, while Google pocketed a sizeable $4.7bn. The more websites Google has within its partner network, the more money it is likely to make. If it starts to weed out some of the dubious digital detritus, then it should prepare for a big hit in earnings - something which may not go down too well with its shareholders.

All of this couldn't come at a worse time for the digital advertising industry, which is already under fire from different quarters of the marketing industry and is accused of facilitating massive advertising fraud, running into billions of dollars every year. Many industry insiders believe that it will continue to be dogged by issues of trust, transparency and murkiness for a long time to come.

As the internet as we know it is largely advertiser-funded, this poses all kinds of complex moral and brand issues for the companies that are expected to plough more than $200bn of their money into it this year.

With several hundred leading US brands already voting with their cash by refusing to have their ads shown on websites such as Breitbart, change is coming. Known for some of the worst and possibly most inflammatory headlines ever ("Birth control makes women unattractive and crazy" and "Hoist it high and proud: The Confederate flag proclaims a glorious heritage"), advertisers are now putting principles before profit and quality before reach.

Meanwhile, trusted news organisations that invest heavily in quality journalism can only bask in the glow of schadenfreude. While they have seen millions in advertising revenues flow into the coffers of digital giants such as Google and Facebook in recent years, there may yet be an upside for them when the dust settles on all of this.

If the fallout and ongoing debate about fake news are anything to go by, trust and accountability will play a huge role in determining the future of the media. Thankfully for the old media, these are qualities that are still in abundance.

Sunday Independent