YouTube Announced harder selection of its content means less number of potential videos for advertisers.
As written on poslovno.hr, in last ten days companies like Verzion, AT&T,Johnson&Johnson,Marks&Spenser cancelled all activities on YouTube due the offensive content on YouTube, questioning googles long term strategy. According to Reuters short term financial effect will not be huge for google, mainly because the biggest part of the income comes from smaller advertiser without big budget for TV or other media.
Some analyzers believe the advertisers will come back soon, since they don’t want to lose touch with the millennium generation. But, the grow of hate speech on the internet makes the advertisers thinks about going back to TV. Video content is more vulnerable than the people think. Not every content is the same, so are not the commercials. When you destroy this, the whole concept starts to fall, underlines the senior analyst Joel Espelien (Diffusion Group). Last week, the stock value of Alphabet (YouTube owner) dropped by 3% in just three days. And although the Alphabet gives almost no information about the profit, analyst Mark Mahaney from Capital Markets, estimates this year’s YouTube earnings around 14 billons USD.
Alphabet affiliate Google announced to take more attention to abusive content on YouTube. However, David Cohen the president of Manga Global, media buying company, doesn’t believe that this announcement convicted the advertisers in any fast changes. Harder selection of the content means less potential videos for the advertisers, thinks Cohen. This could lead to problems in the growing community of small, independent, content producers, who are contributing to the volume and sharing the ad income with YouTube.
The loss of the not satisfied content producers could be a big problem for YouTube, especially because Facebook and Twitter are very interested in to this part of the market.