Why the YouTube ad boycott could be bad for Google in the future

Google’s parent Alphabet reported a 22.2 percent rise in quarterly revenue, driven by a surge in advertising on mobiles and it's popular YouTube video service even after well-known brands said they would temporarily suspend advertising on the video-streaming service after the Times of London reportedly discovered ads placed next to racist, sexist and xenophobic content.

Approximately 250 advertisers were boycotting YouTube, some of which include PepsiCo, Wal-Mart Stores, Starbucks, AT&T, Verizon, Johnson & Johnson, and Volkswagen. According to a report by CNBC, the company reached out to calm ‘thousands and thousands’ of YouTube clients nervous that their brands might be next to suffer the same embarrassment. CEO Sundar Pichai stated that the company had taken ‘serious and significant steps’ to address advertisers’ concerns after several large brands suspended advertising. He says, “We're evolving overall to a better place and the feedback from our partners was very positive and constructive.”

Even though the company’s earnings rose, it is believed that the fallout from the YouTube boycott is likely to be felt through the rest of this year, points out Associated Press. Certain advertisers have curtailed their spending until they are convinced Google can prevent their brands from appearing next to extremist clips promoting hate and violence.