Google Downgraded After YouTube Advertising Boycott Over Brand 'Concerns'
publish date: 2017-03-20
Pivotal Research Group analyst Brian Wieser on Monday downgraded his rating on the shares of Google parent Alphabet, citing negative recent headlines in Britain.
As reported, last month it emerged that big-name advertisers, including car-maker Jaguar Land Rover and media and information firm Thomson Reuters, suspended or limited their U.K. digital advertising spending following a report in The Times, part of Rupert Murdoch's News Corp, that said that their ads have appeared on hate sites and next to videos on Google's YouTube from supporters of Islamic terrorists and other extremist groups.
And late last week, the U.K. arm of advertising agency giant Havas said it was halting advertising on Google and YouTube "until further notice." News Corp CEO Robert Thomson argued that advertisers "need to go back to basics to protect their brands from serious damage."
Wall Street is also starting to take note, with Wieser highlighting "brand safety concerns" and recent stock gains. "Google is facing a serious issue in the U.K. with brand safety issues, which has global repercussions," Wieser wrote in his Monday report. "Although spending by advertisers who have announced their intention to suspend spending on YouTube and other Google properties is relatively small so far, we think that awareness of the incident will marginally curtail global growth this year versus prior expectations, leading us to reduce our price target on Alphabet slightly, to $950 versus $970 previously."