Unless you have been offline for the past week, you will know about a mass advertiser exodus from Google and YouTube with accompanying newspaper reporting against Google.
So far, a large number of big companies have pulled their ads from Google over fears that they are used to fund extremism. At the same time, eager politicians wanting to win some quick votes and to look good in the press, were quick to give journalists juicy (but misleading) quotes, which the press saw no reason to fact check.
Also, the person who has found many of these 'problematic examples' is a guy who has filed a patent for solving this problem, thus using journalists to drive demand so that he can sell it to Google.
Add to that stories by the press itself, where they interviewed 'experts' who clearly don't know what they are talking about.
For instance, the Guardian wrote:
The ads help fund payments to the people who post the videos, with every 1,000 clicks worth about ~£6. Experts estimate this could have been worth ~£250,000 to extremists.
Anyone who has ever used YouTube knows that this isn't even remotely true. This is not how YouTube works.
But there is a much bigger problem here.
The problem is that this trend doesn't really hurt Google that much in the long run, but it will decimate the news media industry. While the press is getting 'high' on bashing Google, they fail to realize that everything they say apply to themselves as well.
This doesn't mean there isn't a problem with Google. There is. As I tweeted:
Is there a problem with the ad tech market? Yes! ... Should something be done? Yes! ... Is this also 'Google bashing' by rivals? absolutely!
So let's have a discussion about this from the perspective of a media analyst. What is actually going on here, and what is the real trend?
Firstly, let's just get something out of the way here. Much of the discussion around why brands 'justify' pulling their ads from YouTube is based on the narrative that Google is 'funding extremism'.
As I mentioned earlier, the Guardian claimed videos earn ~£6 per 1000 views, providing the staggering amount of ~£250,000 to extremism.
Is this true? Well, no. This is not how YouTube works.
Let me explain, starting with who gets the money.
There is a misconception in the media that all videos with ads on YouTube generate money for the person who uploaded it. This is not necessarily true. The fact is that only YouTube Partners make money from YouTube advertising.
I can prove this:
Here is a screenshot of one of the videos I have uploaded to YouTube on my personal account. It's not about anything serious (I am just playing around in Photoshop), but it has accumulated 100,000+ views.
But notice that before it starts playing, YouTube is showing a pre-roll ad for something on iTunes.
So according to The Guardian's 'expert', I should have earned ~£648 (or $787) from this video. But how much have I actually earned from this? Well, the answer is ... nothing, nil, nada, zero, zilch.
The reason is that I'm not a YouTube Partner. So even though an ad is displaying before my video, as the creator I get nothing unless I become a partner first, which requires you to have an 'eligible' account.
Granted, that's fairly easy to do, but the point is that you cannot simply assume that just because there is an ad before a video, that this also means YouTube is paying the uploader. This is especially true when it comes to smaller accounts.
For instance, we sometimes hear about some extremist creating a new YouTube account to upload some quick videos. Those accounts are highly unlikely to also be YouTube Partners, which means that they don't actually get any money at all.
The same is often true for people with a political agenda. Those accounts are often not YouTube Partner accounts, and thus get no share of the revenue.
The problem, of course, is that we don't know whether a YouTuber has a YouTube Partner account or not. There is no reliable way to see this from the outside (at least not one that I know of).
It's an unknown, which also means that it's highly misleading to simply conclude that all videos uploaded by extremists helps fund them. It might be the case with some accounts, but we don't know if it's a problem as a whole.
I have yet to see a single study or article by a journalist that has looked into this. We know that on other channels, the share of advertising on problematic sites is negligible. For instance, when brands started blocking ads from appearing on Breitbart News (which also was nearly impossible to enforce because of the complexity of the ad tech market), Nordstrom reported that it was less than 0.1% of the total inventory.
While errant appearances on unwanted sites may be rare - Nordstrom runs millions of ads daily, it said, and fewer than 200 show up on Breitbart.
Update: Google also told ReCode that the actual exposure to extremist content is very small part of whole.
"When we spoke with many of our top brand advertisers, it was clear that the videos they had flagged received less than 1/1000th of a percent of the advertisers' total impressions."
But let's assume that an extremist is earning money from YouTube ads, how much would he earn? Well, the 'expert' in The Guardian claims he would make ~£6 per 1000 views.
No ... just no. That's a ridiculous figure.
The most recent number that I have heard (and this was a couple of years ago) is closer to $2 per 1000 views (~£1.65), but that was for popular YouTubers.
This is important, because the way YouTube works is incredibly complicated. There isn't a fixed revenue per view. Instead, there is this massively complex system where several different factors determine how much one can earn.
One of the first factors is simply that not all views are monetized. You will know this if you watch videos on YouTube. Not every video has an ad, depending on what you have watched before and other factors.
So how many views are monetized? Again, we have no idea. The figures I have heard are all over the place, from 20% to 80%, because it depends so much on what people are doing.
Another problem is that different ads drive different levels of revenue, which is even further complicated by the fact that different topics have different forms of revenue potential as a whole.
For instance, a very targeted and advertise-friendly YouTube channel about fashion and makeup is generally earning more money per view than a channel about biology. The reason is that more brands are interested in targeting the first channel, thus driving up the price per view.
For political videos? Those usually don't perform that well, because they are not generally about things that advertisers would target. As a result, the ads on a channel with political content are often a form of remnant advertising, being ads that aren't really targeting anything.
Don't forget 'intent' either. People who watch a highly engaging YouTube channel are far more likely to engage with the ad when it's contextually matching the content. For instance, if you watch a Let's player do a video about a new and exciting computer game, you are far more likely to view and even click on an ad from a gaming company announcing another exciting game.
But when it comes to 'extremist' content, there is zero advertising intent, which means that people are almost guaranteed to skip the ads entirely.
The result is that the actual revenue per view varies greatly from channel to channel. So, how much does YouTubers make? Again, we can't really say because it's not just one number.
As I said, the 'average' I heard from some YouTubers a couple of years ago was closer to $2 per 1,000 views, but you can also head over to SocialBlade who offers 3rd party YouTube analytics. They are estimating it like this:
Estimated earnings are just that, estimated. We take a low CPM value ($0.25 USD) and a high CPM value ($4.00 USD), numbers that we have found to be common from our partners, and multiply them by the number of views the channel gets per day. This assumes that every view on the partner's channel is monetized, which is usually not the case.
In other words, much lower than the ~£6 ($7.3) the 'expert' from the Guardian estimated. While the popular YouTubers with advertising attractive topics might be in the upper range, you can be pretty sure that the extremist accounts are in the lower end. So closer to $0.25 per 1000 views ... and that's assuming that they are YouTube Partners, and that all their views are seen, which is equally unlikely.
You see the problem here?
This so-called expert has no idea what he is talking about, but his word is taken at face-value. Meanwhile journalists are slamming Google/YouTube when they make counter statements:
A Google spokeswoman refused to provide revenue reports for any of the extremists mentioned, and disputed the estimates. She said: 'We are talking tens of pounds,' without providing any evidence.
This doesn't mean there isn't a problem. There is. There is a massive problem online with hate speech, fake news and scammers who in some cases are monetized by advertising. A form of advertising where the brands involved have no idea that they are displayed next to this content. It's also no surprise that when brands find out, they get quite angry at the ad tech companies and the agencies.
This is obviously a problem, but it's a very different story from the narrative that Google is monetizing extremism. There has been some cases where fake news sites have been monetized by programmatic advertising, which is obviously a problem. And there might be isolated cases of extremists making money before they are discovered and blocked.
This leads to the second problem, which is that this is a media problem more than just a problem with Google.
We can all agree that we need to improve things, and there are too many bad things happening in the industry. When Nordstrom told it's ad buyers to block Breitbart News, ads still showed up on that site, which is obviously not okay.
As the New York Times reported:
Although we no longer advertise with Breitbart, some of our ads may appear due to the nature of how online ads work [...] while it had blacklisted Breitbart through the vendors it uses to buy and serve ads, it bought some ads through online exchanges that allow sites to conceal their addresses, which may account for the appearances.
At this time, Nordstrom doesn't block those types of advertising opportunities because many prominent, well-respected and legitimate websites choose to use these tactics. [...] Our teams are looking into how we might address this situation.
So, we have a systemic problem with the way all of this is put together. Why is well-respected and legitimate sites, for instance, concealing their domains? That doesn't make any sense, unless some other problem forced them to use that specific workaround.
The bigger and more respected companies, are trying to to do something about it. For instance, in 2016, Google blocked 780 million ads for violating their ad policies, and blocked countless publishers (like fake news sites) from their ad networks. With mobile, they blocked 25,000 mobile apps that were violating the policies and rejected 1.4 apps from using it in the first place.
So, a lot of things are being done, but obviously, more need to be done. The discussion we need to have isn't just about individual cases, but more so about how everything is put together.
But it's not this simple either.
The real problem is, that within the past three years, this trend has changed. Three years ago, the blocking of ads was focused on actual scams. For instance, Google told us that it has blocked 10,000 sites and 18,000 accounts for trying to sell counterfeit good.
This is a very specific focus, that relates directly to specific laws.
But what we are seeing today is that brands and media are telling Google to block ads if there is 'something we don't like'.
For instance, one of the extremists that The Guardian used as an example was a pastor from the US. Here is what they wrote:
Other online extremists making money from adverts placed against their YouTube videos include the US pastor Steven Anderson, who was banned from the UK last year after he said the massacre at a gay nightclub in Orlando, Florida, was 'good news' as 'there's 50 less paedophiles in the world'.
Anderson's YouTube channel is estimated to have made $68,000 from 33.5m views of his videos, in which he says gay people 'were not born that way, but they will burn that way'.
We can all agree that this person is an extremist, and that this is pure hate speech. But in the US there is no law against this. It's his opinion.
Mind you, I don't like this at all, but think about what is happening here.
In the past, Google, Facebook and everyone else tried to block accounts if they did something illegal. Like if they were conducting scams, violating copyright, or if they directly threatened another person (and not just indirectly against a demographic).
But now we are telling Google to block someone from having an (offensive) opinion that we don't like. This is a very different trend, and one that implicates the media as much as it implicates Google.
I want you to think hard about this. Should Google block these channels on YouTube? Should Facebook block them? And if they don't, should brands stop buying advertising on YouTube ... like what we are seeing these days?
Just stop and think about this.
Now, if you think the answer to this is 'yes', then let me show you something else. Here is Fox News, where one of their hosts is talking about creating a 'pure' society by not marrying 'other species', mentioning examples from Sweden and Finland where this is 'illegal' (which it isn't ... that is a pure lie).
So, if Google has a responsibility to block a priest from talking hateful about gay people, why doesn't this then also apply to Fox News?
Remember, we are not just talking voluntary acts here. In Europe, politicians are talking about enacting legislation to force Google to act.
Shouldn't that then also apply to all other forms of media, like Fox News or any other media site that 'hosts' the same opinions?
What about the brands. If you are pulling ads because they appeared next to a video on YouTube of someone saying something offensive, why haven't they pulled their advertising from Fox News?
And not just Fox News, what about The Sun? Here is a front page editorial spewing profanities towards Spain and the EU, right underneath an ad from a travel company.
This is not a Google problem, nor a decision that is up to Google to decide. The trend that we are seeing now, and the problem that we now face is about how we define what is acceptable in our society as a whole.
Mind you, this goes far beyond Fox News or The Sun. The politicians themselves often make hate-related speeches, which every newspaper cover with a 'report'. But if Google shouldn't be allowed to host or display such content, why should every other newspaper?
But, you say, this is not the same thing ... but in relation to advertising, it absolutely is. Let me illustrate why.
Imagine if you had four different channels:
So, same story, four different news sources:
Now, from a journalistic perspective, we can kind of agree that not all of these are the same. Journalists, for instance, don't consider the original YouTube video to be journalism at all.
The fake news site isn't really journalism either, because they merely used this story as part of their scam to get some cheaply monetized traffic to their site.
Fox News? Well, I have no idea how to classify that ... maybe it's 'interviewed' fake news site?
And the Guardian? Well, here the journalist obviously doesn't agree with the narrative (at least we assume so), but since he is still just reporting and not adding or removing anything from the actual story, there really is not much of a difference. It just 'feels different'.
But then think about it from a reader perspective. Does the reader see this in a different way? Well, that depends on their own personal views. If they are a Guardian reader, they might be offended by it and realize that this 'report' is just that. But if you are a Fox viewer, the outcome will be entirely different. Now you suddenly do believe that these Muslims are doing whatever this person claims.
On YouTube? Well, that depends. From everything we know about human behavior, people have a really hard time telling true from false, so what they end up thinking could be anything, just as with the fake news sites.
So from a reader perspective, the difference isn't in the journalistic background, but 'how someone feels' ... which is a terrible basis for anything.
But now think about it from a brand perspective. Imagine if all these channels had an ad next to the story.
You see the problem?
If you want to sell people a new pair of running shoes, which one of these sites best represent something that could lead to a sale?
The reality is that, from a brand perspective, all of these are bad. It doesn't matter that technically there is a difference in journalistic focus. What matters is that if you are trying to sell a pair of shoes, your ad is being displayed next to highly problematic narratives.
From a trend perspective, more and more brands are realizing this. The first ones to get hit were fake news sites, then ultra-right wing publications like Breitbart News. Now brands are hitting YouTube, but it's not going to stop here.
Soon we will see the same thing happening with Fox News, and then also with newspapers like the Guardian.
In fact, this is happening right now.
Google is beginning to introduce safeguards and more granular control for where ads are displayed. As they say:
Safer default for brands. We're changing the default settings for ads so that they show on content that meets a higher level of brand safety and excludes potentially objectionable content that advertisers may prefer not to advertise against. Brands can opt in to advertise on broader types of content if they choose.
Simplified management of exclusions. We'll introduce new account-level controls to make it easier for advertisers to exclude specific sites and channels from all of their AdWords for Video and Google Display Network campaigns, and manage brand safety settings across all their campaigns with a push of a button.
More fine-tuned controls. In addition, we'll introduce new controls to make it easier for brands to exclude higher risk content and fine-tune where they want their ads to appear.
So what will likely happen is that brands will begin to say, "We don't want our ads to be displayed against content that relates to politics", because this is the simplest way to define that block. Because of this, Google will, first on YouTube, start to only show ads on non-political videos.
This will then be expanded to Google's full ad network as more and more brands start to make this demand, meaning that all the newspapers who are currently using Google's ad network will be blocked by default.
Then brands, who are starting to see improved conversion rates because all their ads are now displayed against much more advertising friendly content, will put pressure on their ad buying partners to block all ad spots that might be placed next to political stories.
Suddenly, all newspapers will lose all their advertising revenue, because they are the first ones to get hit by this.
Mind you, Google doesn't really care, because they are not losing anything. Right now, Google is in hot water because it's the target of a very negative campaign against them. But political content only makes up for a infinitesimal small amount of the ad views. Google already makes most of it's money from non-political targeted ad spots.
We see this trend of brands moving away from advertising next to hard news already today.
For instance, in newspapers across the western world we can almost daily read negative stories about muslims, most of them based on interviews or reports about politicians.
Meanwhile, Nike launched an ad campaign like this:
If you have a body, you're an athlete.
What Nike is basically saying here is that they don't want to be part of it. Instead, they want to be known as being an inspiring, happy, inclusive and tolerant brand, because they know this is the only way to have long term success as a brand.
Because of this, Nike will likely tell YouTube to shape up and give them the tools to only show their ads next to videos that inspire people to be great (aka no political videos). They obviously don't want to appear on fake political news sites (or any fake news sites). They don't want to appear on Fox News, because can you imagine the reaction the audience would have if they saw this?
But what about the Guardian? Well, at first, you might think this would match Guardian's audience, but if I was Nike I wouldn't want to advertise there either, because it implies a certain political focus.
Nike is not trying to be political here. They are trying to be anti-political. They are trying to say, 'Shut up everyone. You are all idiots for even having this discussion'.
So, the way to solve this for brands is to not advertise on any newspapers at all, and instead focus 100% on consumer focused channels that are based on being inspiring.
This is the trend that is happening right now.
The future of advertising is moving away from hard news. It starting with the most extreme examples. But the trend isn't going to stop there, nor is Google going to lose this battle.
The newspapers are the ones who are in trouble here. They just haven't realized it yet.
Founder, media analyst, author, and publisher. Follow on Twitter
"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé