Even YouTube’s “Preferred” videos can be sketchy for brands

Alphabet Earnings

This story was delivered to BI Intelligence “Digital Media Briefing” subscribers. To learn more and subscribe, please click here.

Advertisers are finding their ads show up next to questionable content on Google Preferred, which lets brands run ads next to YouTube’s most popular content, Business Insider reports.

Advertisers are finding that Google Preferred has, at least in one point in time, hosted content that contained sexually explicit discussions and foul language, for example. This is problematic as Google Preferred was initially pitched as the closest replica of TV advertising.

This brand-safety mishap stands to further erode advertisers’ trust in YouTube:

  • It could undermine the value of Google Preferred ad inventory, hurting YouTube revenue. Ad prices on YouTube Preferred are often on par with those of cable TV, and cost two to three times more expensive than video ads on the open web. Video ads on the open web cost roughly $10 to reach 1,000 people.
  • This hurts YouTube’s quest to shift ad spend away from TV, and strengthens TV’s hand in its pitch to brands. Advertising on traditional TV could become more appealing, as brands know what content their ads will appear next to on the medium. BI Intelligence estimates US TV ad spend will grow from $73 billion in 2016 to $81 billion in 2021, while digital ad spend is estimated to grow from $70 billion to $107 billion in that time period.
  • It could also galvanize other video platforms that compete against YouTube. Some advertisers may look to allocate more ad budget to ad-supported TV streams and skinny bundles as these platforms have fewer brand-safety issues. It could also encourage advertisers to divert spend to platforms like Facebook and Snapchat.

Nonetheless, YouTube has already stepped up to address the concerns of advertisers. In a statement to BI Intelligence, Debbie Weinstein, Managing Director of YouTube & Video Solutions, said: “We built Google Preferred to help our customers easily reach YouTube’s most passionate audiences and we’ve seen strong traction with a record number of brands using it this year. When we’re made aware of channels that don’t belong in this offering we remove them, and are looking into ways to offer our brand partners even more control for what they buy next year.”