YouTube survives ad controversy

Google parent Alphabet posted a 29 per cent rise in quarterly profit, driven by a surge in advertising on mobiles and its popular YouTube video service.

Alphabet’s net income rose to $5.43 billion in the first quarter ended March 31st, up from $4.21 billion a year earlier.

Google’s ad revenue, which accounts for a lion’s share of its business, rose 18.8 per cent to $21.41 billion in the first quarter.

YouTube found itself at the centre of a scandal a few weeks ago after an investigation found that brand ads were appearing next to content from terrorists and other hateful material. The issue led to brands including Channel 4, Tesco and the UK government pulling ads from the site. However, the controversy seemingly had little impact on Google’s ad business.

Speaking on an analyst call following the results announcement, Alphabet CEO Sundar Pichai said Google had been on a charm offensive. He claimed chief business officer Philipp Schindler and his team had made “literally thousands and thousands of calls and in-person conversations”. And he credited this with helping it to allay concerns and “respond thoughtfully”.

“One of the things I’ve noticed is the depth of relationships we have with our advertisers was very evident to me as we went through this over the past few weeks,” he explained. “I think that deep relationship is what allowed us to respond thoughtfully. And I think the feedback from our partners was very positive and constructive, and I think we are evolving overall to a better place. To me that shows the long-term investments you make in these relationships plays well at times like these.”

Pichai added that Google works “very hard to create the best environment for brands on YouTube”, highlighting its “cornerstone” offering Google Preferred, which allows brands to advertise against the top 5 per cent of content.

Google has also unveiled new safeguards for advertisers, including updated ad policies and enforcement, a new default setting around where ads can appear, improved controls for advertisers and third-party brand safety reporting.

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