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Awalledgardenforthevideosite’sadvertisers
makes things tougher for amateur creatorsILLUSTRATION BY KURT WOERPEL
January 29, 2018
Edited by
Jeff Muskus
Businessweek.comLOOK AHEAD ○ Apple earnings will have investors
looking for bigger stock buybacks
given its tax repatriation○ Alphabet earnings will show
whether Google has been able to
cut traffic acquisition costs○ Facebook investors will watch
earnings for signs of continued
strength at InstagramYouTube Tries to
Think of the Children
You know things are bad when the engineers show
up in suits.
In early January, YouTube’s technical chiefs
dressed up to meet privately in Las Vegas with sev-
eral prominent ad agencies. The Google executives
in charge of YouTube’s ad sales had arranged the
meetings to assure advertisers the video site was
working to get its problems under control. Months
of outrage had followed reports that YouTube had
let terrorist leaders continue to post recruiting vid-
eos and aired the juvenile blunders of young stars
PewDiePie (who cracked anti-Semitic jokes) and
Logan Paul (who filmed the corpse of an apparent
suicide). The bigger problem for advertisers: bewil-
dering, sometimes grotesque videos appearing on
YouTube’s dedicated channel for children. Think
young kids being force-fed or a knockoff of a pop-
ular cartoon pig being tortured in a dentist’s chair.
Google’s solution was to safeguard a tiny slice of
YouTube, one sanitized for marketers, with every
video vetted by human moderators. The rest of the
familiar YouTube free-for-all would have far fewer
channels running ads. Advertisers would have less
reason to worry that their pitches might run ahead
of Nazi humor or child exploitation. “The human
review is fantastic,” says Jon Anselmo, chief digital
officer with ad giant Omnicom Media Group. “The
devil will be in the details.”
YouTube has pledged to hire 10,000 people to
root out inappropriate clips and train computers to
do the same, and it will beef up the rating system
for advertisers paying for its Google Preferred
premium package. A second tier of YouTube
creators will still be allowed to run ads and get
a piece of that revenue, but newbies will have to
prove themselves. Other details remain elusive.
YouTube said in a statement that it aims to “curb
bad actors, stabilize creator revenue, and provide
greater assurances to advertisers.”The creation of this walled garden marks a big
change for YouTube, which has always presented
itself as a playground where any video creator can
become popular enough to make a living. Cutting
up-and-coming creators out of its ad revenue may
threaten its ability to attract and retain talented
ones. The shift underlined how eager YouTube
is to win back advertisers that have boycotted in
the wake of one debacle or another. Royal Bank of
Canada estimated that a first wave of defections last
year cost the $10 billion site $750 million.
“While there’s still more to be done, we’re
encouraged by YouTube’s efforts to fix their brand
safety issues,” says Marc Pritchard, chief brand
officer for Procter & Gamble Co., which previously
slashed its ad spending. “This is important, and
they’re on it.” Other ad buyers remain skeptical
of the sanitized version. YouTube has never been
diligent about purging unseemly content from its
site, says one marketing chief who didn’t want to
be named, so why should anyone take this bit of
crisis PR seriously?
With its new restrictions in place, of course,
YouTube will have fewer videos to sell ads against,
meaning it will likely charge more for each spot.
Now no creator with fewer than 1,000 subscribers
will even be allowed to run ads on their videos.T E C H N O L O G Y