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The advertiser boycott Google and YouTube are facing is unlikely to impact near-term revenues, according to two Wall Street analysts.
Google dominates search advertising with a share of over 75% of the market in the US and generated more than $24 billion in revenue in 2016.
A note from Morgan Stanley explained the part of the business affected by the boycott – YouTube ads and Google’s Display Network – make up just 10% of net revenues.
That part of Google’s business is split across millions of clients, so the boycott is unlikely to harm the company’s bottom line, the analysts said.
Another note from RBC Capital Markets estimates that, in the unlikely event there is a 10% decrease in YouTube and Google Display Network revenues, it would reduce Google’s overall revenues by 1.7%. Similarly a 2% decrease would affect only 0.3% of the company’s overall revenues.
RBC’s note said a continued drop in advertiser interest in YouTube would benefit Facebook and Instagram. Morgan Stanley’s note added that a result could be brands moving back to traditional TV advertising or slowing down their shift away from it.
Industry executives at Advertising Week Europe said the backlash against Google could be a result of opportunism coming from the established players, such as TV and media buying agencies, in the advertising industry wanting to retain their position.
According to eMarketer Google accounts for over 40% of US digital ad revenues. The Mountain View company this week announced tougher ad policies, increased control for marketers, and said it would grow its capacity to review offensive content with a hiring spree to combat the issue. More than 250 brands in the UK and US froze their ads on Google following The Times’ investigation into ads appearing alongside offensive content.