CAN GOOGLE RECOVER FROM GLOBAL CONTROVERSY OVER ITS PROGRAMMATIC ADVERTISING SYSTEM?

IT'S the story that has rocked the world of advertising. The lucrative Google (NASDAQ: GOOGL) advertising system is under the microscope as blue chip clients in the UK, US and Australia boycott the search engine giant.

The boycott signals a growing backlash against 'programmatic trading', which automates the buying and selling of advertising online.

The issue hit the headlines in the UK earlier this month when the likes of HSBC, Marks and Spencer, L'Oreal, Audi, BBC, and Royal Mail pulled ads from Google and its video sharing channel, YouTube, after they appeared next to offensive material including websites and posts that preach extremism, racial hatred and anti-gay messages.

Ads were being placed onto these sites and videos because of the Google advertising  algorithm, designed to help YouTube content creators monetise their original content on the site.

"It needs to be understood that this is not just a Google problem. This is an 'adtech' problem," says ex-agency owner turned industry critic Bob Hoffman.

The author of "The Ad Contrarian" says advertisers now need to understand the need to move away from algorithm based advertising.

"A great deal of online advertising that is bought and sold 'programmatically', or through ad networks, is in danger of showing up in bad places," he says.

"The press has focused on Google and YouTube, but the problem is systemic."

In the US, AT&T along with Johnson & Johnson, Verizon, PepsiCo, Wal-Mart, and Starbucks are just a sample of the major advertisers who have pulled support from Google. In Australia, Holden and Kia suspended YouTube advertising after their cars were promoted alongside video that directed mysogynistic insults at businesswoman Ita Buttrose.

A spokesman for Kia Motors Australia said its programmatic advertising with Google had been suspended as soon as it was made aware of the video.

Hoffman believes the way forward for advertisers is a return to quality rather than quantity.

"In my opinion, the best option for online advertisers is to avoid adtech by buying directly from quality publishers like we do in the non-web world," he says.

"Until such time as the adtech industry can figure out what the hell it's doing, sidestepping adtech and buying directly from reputable publishers is a more expensive option but eliminates a substantial amount of the danger and allows you to know where your advertising is running."

Business News Australia