Google is in the news again, and this time it is for “funding extremists”. A host of large advertisers have either pulled or paused advertising on parts of the Google network after a report in The Times showed big brand ads on extremist content. Aggrieved advertisers include the UK Government, who have paused advertising and summoned Google representatives to answer questions. Despite the excitement around the story, many industry voices are unphased by the revelations, so what exactly is going on?

Are Google funding extremists or aren’t they?

AdSense and YouTube monetization allow practically anyone to create an account and earn money from advertising shown alongside that content. Estimates are that there are over a million publishers earning through Google’s monetization programmes. Both AdSense and YouTube monetization have policies that ban extreme content (and seek to protect advertisers in a number of other ways). Those rules do get broken though, and on a network that size there will always be someone breaking them.

Why doesn’t Google check every video?

There are over 300 hours of video uploaded to YouTube every minute of every day. If that were all manually checked, Google would need to employ over 32,000 people just to check YouTube. That would add nearly 50% to Google’s global workforce just to cover YouTube. The AdSense network is bigger still and growing all of the time. Manually checking content simply isn’t feasible for a dynamic content network, especially given the low rates that advertisers expect to pay. Competing services that do manually place each campaign charge advertisers significantly more to place those ads due to the work involved. It seems unlikely that savvy advertisers like the UK Government, The Guardian and L’Oreal aren’t already aware of this.

What does Google do to tackle this?

Ad Publishers (either on YouTube or the wider display network) have a host of rules to follow in order to benefit from Google ads. New accounts are checked both automatically and by a manual approval team. The exact process of ongoing checks is a closely guarded secret, but includes automatic checking of content and manual review based on user feedback. Our experience is that these processes have become more active in recent years, but it is hard to imagine any system that could be 100% effective at this sort of scale.

Why did the Guardian ad appear on a Jihadi YouTube video?

The image that keeps getting shared along with this story is of a Guardian ad appearing on what looks like a Jihadi video. Despite appearances, the extremists who posted the video were actually “Britain First”, the British Nationalist group that rose to popularity on Facebook. Still probably not where the Guardian would like to see their ad, but not as concerning to many as the thought of ISIS videos being used to promote a left-of-centre newspaper.

Where and how that ad is shown would have been decided by The Guardian and their advertising agency. It’s impossible to say exactly why it appeared there without seeing the account settings, but the most likely explanation is that the ad was set-up to target users rather than content. In fact that particular Guardian ad encourages readers of The Guardian to pay for membership. This almost certainly only appeared because The Guardian chose to retargeted their website users across the display network, which included targeting the Guardian-reading employee of The Times conducting the ‘investigation’.

Do Google really pay extremists $7.60 per 1000 views?

The report from the Times suggests that YouTube is paying $7.60 per 1,000 views of extremist videos. YouTube publishers wondering why extremism seems to be such a profitable niche might be relieved to know that this figure is not realistic.  The $7.60 figure seems to have come from a 2014 article in the New York Times that references the price that advertisers were then paying through one buyer.  The same report goes on to mention that by the time margins are taken by intermediary and the all-important fill-rate is taken into account, the publisher actually earned closer to $0.84 per 1,000 views.

Although $0.84 is a far less sensational figure it is likely still optimistic for the type of channel being discussed in the current news cycle. YouTube ad pricing is governed by demand, and the fact that advertisers don’t want to appear on such content actually reduces upwards price pressure and drops earnings below those historic averages.

“The practice is likely to generate tens of thousands of pounds a month for extremists. An advert appearing alongside a YouTube video, for example, typically earns whoever posts the video $7.60 for every 1,000 views. Some of the most popular extremist videos have more than one million hits.”

Why the outrage?

There are some real issues here. Ignoring the sensationalist outrage it is clear that advertiser expectations and the resulting placements are not in line with one another. How much that is down to poorly executed campaigns vs poor policy enforcement is unclear. However, there also appears to be a political game being played.

The story was broken by the Times and amplified by The Guardian then by other newspapers. All compete with Google for advertising spend and stand to benefit if advertisers shy away from network spend.   There are errors in the report that either suggest a worrying lack of understanding of advertising from ad-funded newspapers or deliberate manipulation of the facts. Given that newspapers have more to gain than most by advertisers moving away from Google advertising this maybe shouldn’t be too much of a surprise.

What does this mean for publishers?

Short term we could see a dip in advertising rates. Big advertisers drive prices up and significant spend being removed from the Google ad system might cause rates to drop. This would be felt more by publishers that historically serve more ads from the big players that have pulled ads.

Whether that spend returns to the Google network is yet to be seen. Google are certainly not the only show in town and others will be looking to pick up those advertising budgets (including, no-doubt, the newspapers who push the story). Google are however the biggest player and retargeting campaigns need a digital platform. Facebook is likely to do well, but we might see much of that spend return once the outrage lessens.

Longer term the story is likely to lead to more activity around policy enforcement and possibly even tightening of publisher policy on YouTube and the AdSense / AdX network.  This is likely to be better news for quality publishers on those networks, as supply and demand tips slightly back in the publishers favour.