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Not a great day to be the king.
Google, the world’s largest advertising platform, charged advertisers for “premium” advertising but actually placed those ads on sites that didn’t meet Google’s “standards for monetization,” according to research the Wall Street Journal first reported on.
Though Google manages all the ad inventory for YouTube, the company also lets advertisers buy video ads on third-party websites. It was on those sites where Google allegedly violated its own standards about 80% of the time, overcharging advertisers for “muted, auto-playing, [and] mis-declared” ad inventory, according to research from the ad tech auditing firm Adalytics, which reviewed and analyzed billions of impressions from more than 1,100 brands between 2020 and 2023.
“This is an unacceptable breach of trust by YouTube,” Joshua Lowcock, global chief media officer at ad agency UM Worldwide, told the Journal. “Google must fix this and fully refund clients for any fraud and impressions that failed to meet Google’s own policies.”
Google’s response: In a blog post yesterday, Marvin Renaud, Google’s director of global video solutions, called the report “extremely inaccurate.”
“Advertisers are only paying for ads when they are viewed,” he wrote, adding that Google prohibits made-for-advertising (or MFA) content. (In 2021, Marketing Brew found that Google was serving many of the ads on MFA sites, while a recent report from NewsGuard reached a similar conclusion for “unreliable” sites generated by AI.)
Murky waters: Insider Intelligence estimates that programmatic advertising will be a ~$149 billion business in 2023, but it has long had a transparency problem. A recent transparency report published by the Association of National Advertisers found that 23% of all programmatic ad spend is wasted on low-quality sites that were largely clickbait.
Lawmakers circling: In January, the Department of Justice and eight states sued Google for allegedly operating an adtech monopoly. In response to the Adalytics report, Republican Sen. Mike Lee, whose campaign ads ran in invalid placements, told the Journal that the research “proves the lie in Google’s assertion that it has made digital advertising better for all involved.”
“Advertisers and consumers will continue to suffer from Google’s rampant conflicts of interest and fraudulent conduct,” he said.