YouTube's Better-Than-TV Pitch Undermined by Offensive Video - Bloomberg: Four years ago, Robert Kyncl, YouTube’s business lead, confessed a mistake. "I thought that YouTube was like TV. But it isn’t," he said at Google’s annual advertising show. "YouTube talks back. It’s interactive. And YouTube is everywhere."
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Kyncl’s message resonated with advertisers. Gross ad revenue at YouTube soared from roughly $4 billion in 2013 to $11 billion last year, brokerage firm�Monness Crespi Hardt & Co. estimates. At the same event in 2016, Chief Executive Officer Susan Wojcicki boasted about taking ad dollars from traditional TV networks.
Yet now the same traits Kyncl said made YouTube better than TV have plunged the video service into crisis. Some of the world’s largest advertisers, from Verizon Communications Inc. to Johnson & Johnson, stopped spending on YouTube because of concern their ads could appear next to offensive videos. More big companies pulled back on Friday, including PepsiCo Inc., Starbucks Corp. and Wal-Mart Stores Inc. This week, $26 billion was knocked off parent company Alphabet Inc.’s market value.
"I’ve always been suspect of advertising on YouTube. There’s not really great content in there," said Rob Griffin, chief innovation officer at�marketing agency Almighty. "This will dent their long-term prospect of making YouTube an alternative to TV."
While the shift to online video viewing favors YouTube, it is scrambling to reassure companies and ad agencies they’ve made the right decision to spend money on the site, and convince them YouTube will protect their ads from offensive material in the future.�
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Kyncl’s message resonated with advertisers. Gross ad revenue at YouTube soared from roughly $4 billion in 2013 to $11 billion last year, brokerage firm�Monness Crespi Hardt & Co. estimates. At the same event in 2016, Chief Executive Officer Susan Wojcicki boasted about taking ad dollars from traditional TV networks.
Yet now the same traits Kyncl said made YouTube better than TV have plunged the video service into crisis. Some of the world’s largest advertisers, from Verizon Communications Inc. to Johnson & Johnson, stopped spending on YouTube because of concern their ads could appear next to offensive videos. More big companies pulled back on Friday, including PepsiCo Inc., Starbucks Corp. and Wal-Mart Stores Inc. This week, $26 billion was knocked off parent company Alphabet Inc.’s market value.
"I’ve always been suspect of advertising on YouTube. There’s not really great content in there," said Rob Griffin, chief innovation officer at�marketing agency Almighty. "This will dent their long-term prospect of making YouTube an alternative to TV."
While the shift to online video viewing favors YouTube, it is scrambling to reassure companies and ad agencies they’ve made the right decision to spend money on the site, and convince them YouTube will protect their ads from offensive material in the future.�