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WATCH: Google faces major fallout as brands withdraw YouTube advertising
GOOGLE has come under intense pressure from advertisers in the past week, after it surfaced some brands’ advertisements were appearing alongside controversial and offensive videos on YouTube.
The fallout has dealt a major blow to Google and led to a number of big companies pulling their advertising from the video-streaming platform. ABC reports analysts saying this could potentially cost Google anywhere between US$750 million and about US$1 billion this year.
The UK government was one of the first major advertisers to halt advertising on YouTube, followed by other European brands like Marks & Spencer, Toyota, Volkswagen, Tesco, and Heinz. In the US, they were joined by telecoms giants AT&T and Verizon, along with pharmaceutical mammoth GSK, Pepsi, Walmart, and Johnson & Johnson.
SEE ALSO: Google hurries to mollify advertisers following backlash over YouTube ads
In total, more than 200 brands have joined the boycott.
Pivotal Research Group analyst Brian Wieser was quoted by MarketWatch as saying in a note to clients: “We estimate a [negative 1 percent] impact this year and next, assuming the problem is settled soon.”
Google owner Alphabet experienced a hit to its stock rating, as Pivotal Research Group downgraded Alphabet shares from “Buy” to “Hold”, saying the decision was made because “Google wasn’t taking the problem seriously”.