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YouTube Responds to Advertiser Pullout, Offers Stronger Controls

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The YouTube NewFront is one of the can't-miss events of New York City's NewFront Season. While most newfronts highlight upcoming original content for advertisers, YouTube's over-the-top events are pure pep rally designed to showcase the site's unmatchable reach in every demographic.

The news from this past week, however, has probably left YouTube's event planners scrambling for direction. Several global brands—including Walmart, Starbucks, Pepsi, General Motors, Johnson & Johnson, Dish, Verizon, and AT&T—have pulled their ads from YouTube over concerns they were appearing on videos that promoted hate speech and terrorism. Over 250 advertisers have joined the boycott.

YouTube's crisis began on February 9th, when The Times of London ran a story showing how major households brands—such as Mercedes-Benz, Waitrose, and Marie Curie—appeared on videos for hate groups, helping them gain funding. The fallout has been bad enough that analysts have downgraded Google's stock.

YouTube sprang into action this week, promising policies that make it harder for hate speech creators to monetize their work, advertiser controls that give brands more say over where their ads appear, and a faster appeals process for creators whose works have been "demonetized."

"We know advertisers don't want their ads next to content that doesn’t align with their values. So starting today, we’re taking a tougher stance on hateful, offensive, and derogatory content," wrote Philipp Schindler, Google's chief business officer, in a blog post.

If this wasn't enough of an internal crisis for YouTube, it also had to address an issue where its optional Restricted Mode excluded some LGBTQ videos.

While some in the ad industry have supported YouTube, pointing out that advertisers already have control over where their ads appear, the episode is certain to cast a cloud over YouTube's May 4th NewFront event. It's also certain to be a top item during Television upfronts in April and May, where broadcasters will certainly emphasize that they insure brand safety more than online channels do. While advertisers have recently been shifting broadcast budgets to online video channels, this could slow or even reverse that trend.

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