Google and Facebook 'will lose millions in ads over extremism fears'

Google and Facebook have faced criticism over ads appearing next to extremist content and fake news. Photograph: Alamy Stock Photo

Advertisers will pull hundreds of millions of pounds in spending from Google and Facebook this year over concerns about ads running next to inappropriate content such as extremist sites and fake news.

Sir Martin Sorrell’s GroupM, which buys more than $75bn (£60bn) of advertising space on behalf of clients globally, has slashed its growth prediction for UK digital advertising and has blamed some of the adjustment on an advertiser backlash over the inability of Silicon Valley giants to stop ads appearing around inappropriate content.

The latest forecast says that spend on major digital platforms like Google, Facebook and YouTube in the UK – or “pure play” internet advertising, in the industry jargon – will grow by 11% to nearly £10.5bn this year, a reduction on an earlier forecast of 15%.

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“Effectively, since March we have seen a surprisingly general effect of clients either stopping spend altogether, or pausing spend in this area. It has been widespread,” said Adam Smith, a director at GroupM. “It has been much more persistent in that if you thought it was something that was a seven-day wonder, it isn’t. There is still a substantial number of advertisers yet to return to their prior weight of ad investment.”

In March, it emerged that major brands’ content was appearing next to videos on YouTube, which is owned by Google, promoting extremist views or hate speech, with a cut of the advertising spend going to the creators. The inappropriate content included YouTube videos of American white nationalists, a hate preacher banned in the UK and a controversial Islamist preacher.

Facebook, which relies upon advertising, has come in for criticism and pressure to clean up its act over a number of issues including distributing “fake news”.

It has faced an advertising boycott by major companies including Havas – the world’s sixth largest advertising group with UK clients including O2, EDF and Royal Mail – which pulled its entire £175m UK digital ad spend.

Earlier this month Vodafone, which spends about £400m a year on digital advertising, introduced a tough new global policy limiting its adverts to sites on a “whitelist”.

Both Google and Facebook are introducing fixes to stem the spread of false information and minimise the chances of advertising appearing next to inappropriate content. However, evidence has emerged that these fixes are not 100% effective.

GroupM said the downgrade will mean that pure play UK internet ad spend – which does not include ad spend on publishers’ websites or TV companies’ digital services – will grow at the slowest rate since 2011.

It is estimated that the cut in forecast spend equates to hundreds of millions of pounds of ad spend being held back from Google and Facebook.

“I think trust in digital advertising is one of the most important industry issues of our time,” said Keith Weed, marketing chief at Unilever, the world’s second biggest advertiser, which owns brands including Dove and Lynx and spends €7.5bn (£6.6bn) globally.

“It is absolutely central to people’s confidence in advertising and brands, and our continued use of these channels. Therefore partners need to have greater accountability to aim for a brand-safe environment. We continue, through tough and difficult conversations with media partners, to accelerate plans that address these challenges.”

Despite the advertiser pullback, traditional media owners offering so-called “brand-safe” environments, such as the websites of newspaper and magazine publishers and on TV companies’ digital services, are not forecast by GroupM to see a major boost in ad spend.

“No traditional media owner has made as much of this as they should have done,” said Smith. “They haven’t seen the message that they were a safer environment for online content translate commercially. Nevertheless, the issue remains an important theme for 2017.”

The forecast for national newspaper advertising, digital and print remains almost unchanged, with a decline of 10.8% to £835m predicted for this year.

GroupM has also downgraded the forecast for the £4.4bn TV ad market this year from flat to a fall of 3%.

The slower rate of growth of pure-play digital ad spend – and the reduced outlook for TV advertising – has led GroupM to forecast the slowest rate of growth for the overall UK ad market since 2012.

In November, GroupM forecast that the UK ad market would grow 7% this year, it now predicts 4.1% growth to £18.6bn. This is the lowest level since 3.8% growth reported in 2012.

Source WorldNews