Google is Downgraded as Advertisers worry about where ads appear

20 Mar, 2017

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Alphabet Inc. (NASDAQ: GOOGL) - may be decelerating, corporations begin to pull away from the advertising titan in the U.K. Over apprehensions pertaining to where their ads are showing. Havas hauled spending from YouTube and Google Display Network in the U.K last week. Other reports implied more companies including the U.K. Government, L'Oreal, RBS, HSBC, Sainsbury's, Sky, Marks & Spencer, McDonald's and Audi have also insinuated they would yank ads from the Google-owned platforms over relatable worries, Pivotal said. Pivotal reduced its price target on $ 950 from $ 970.

According to the Financial Times, Havas spends almost $ 217 million on digital ads in the U.K. Annually. It also announced that it was contemplating a complete freeze on all Google advertising.

The brands are responding to the Times of London report affirming several video ads of brands and charities including Mercedes-Benz, Waitrose and Marie Curie were seen running next to jihadist and neo-Nazi content, giving these groups advertiser money. "While Google has apologized for the incidents, and while the scale of the underlying problem may be relatively small in absolute terms, for large marketers, any one instance of an inappropriate brand placement may be enough to seriously harm brand's business value," Pivotal's Brian Wieser wrote in a report.

Google talked about the fears at European Advertiser Week on Monday, mentioning the company would work on policies to discover content advertisers supposed "safe," enhance advertiser controls and work quicker to eradicate content that defied its policies. However, Pivotal was uncertain if that would be enough to moderate fears, because it minimized rather than solved the issue. "Overall, we think that the problems that have come to light will have global repercussions as the UK marketers will potentially adapt their UK policies to other markets and the marketers around the world become more aware of the problem," Wieser said. "This should curtail spending slightly from the large agency-serviced brands which probably accounts for a quarter of spending on Google."

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