Advertisers are demanding substantial refunds from YouTube after new research revealed millions of ads on partner sites are being hidden from users in a way that violates Google’s policies.
Adalytics, a digital advertising analytics group, researched YouTube’s “TrueView” system, which allows users to skip viewing an advertisement after five seconds.
“Hundreds of thousands of websites and apps” were found where these ads play imperceptibly in the background, without sound, and on an auto-loop. This appears to be a way to prevent viewers from noticing the videos in the first place so that ads aren’t skipped, but the strategy violates Google’s Terms of Service.
Google, which has dismissed the researchers’ claims, tells advertisers that a key selling point for its “choice-based ad format” is that they only get charged if a user watches the entire clip, or at least 30 seconds of it. If skipped, the advertiser pays nothing.
TrueView ads are a core product for YouTube’s $30 billion-a-year business. Ebiquity, a media investment analytics group in London, said their global clients typically spend 40 to 50 percent of their YouTube budget on skippable ads.
They’re meant to play “in stream,” meaning viewers will see them “before, during, or after other videos on YouTube” or through the Google video partner network, “quality publisher sites and mobile apps where you can show your video.” Ads to viewers outside of YouTube”.
But Adalytics, which used web crawler data to crawl the web and also worked with dozens of media buyers from brands and agencies, found that thousands of TrueView ads were being placed “out-stream” — hidden on parts of a website where viewers had little to no interaction with them. The Wall Street Journal previously reported some of the findings.
Joshua Lowcock, global chief media officer at UM, a New York-based advertising agency, said he expects YouTube to investigate the issue and issue refunds to affected advertisers. Adalytics has compiled a list of affected companies that includes dozens of leading brands such as JPMorgan Chase and Johnson & Johnson, as well as the US Department of Health and Human Services.
“This is a systematic failure by Google and YouTube to properly monitor and enforce their policies,” Lowcock said. “Google must engage a qualified third party to conduct a full independent review of the policy enforcement and this failure and issue a refund to all affected advertisers.”
He added: “It is symptomatic of problems occurring in a concentrated and unregulated market.”
Giovanni Sollazzo, chairman of Aidem, a UK-based platform that helps marketers ensure they are reaching real users, added: “We advise all our affected advertisers to request refunds immediately.”
Ruben Schreurs, a Netherlands-based chief product officer at Ebiquity, said the investigation is likely to have a “significant negative impact” on Google’s perceived quality and reliability in the $400 billion digital advertising industry.
In response, Google published a blog defending the quality of its partner network and saying the report made some “extremely inaccurate claims.” Also, after reviewing several websites shared by the Financial Times, the company said it would take appropriate action, including potentially removing all ads on the sites.
“We have strict policies that all third-party providers must follow in order for us to serve ads, and we recently expanded our partnership with Integral Ad Science — a San Francisco-based digital ad verification group — to enable advertisers to measure where their ads are placed,” Google told the FT.
Inefficiencies across the digital advertising industry are rampant. Last week, the Association of National Advertisers, a US trade association, reported that 15 percent of the $88 billion spent on automated digital ads is wasted on “made for advertising” websites designed to engage the user flood with ads and generate accidental clicks.
Google tells advertisers that TrueView ads will only appear on “quality publisher sites” that have “been carefully screened and must meet Google’s inventory quality standards.” The company stipulates that TrueView ads must not be triggered by passive scrolling, “must be audible by default” and also that the content between ads must be “at least” 10 minutes long.
But Adalytics found many examples that violated these rules. On one website, scrolling triggered a muted video feed of five consecutive ads in the lower-right corner of the screen. A one-minute “movie” of random content followed before playing five more commercials. Each “view” is counted as an engaged consumer.
Advertisers often don’t know exactly where their ads are being served because Google restricts the use of independent third-party tracking tools that can accurately measure how and where digital ads are placed.
“Ultimately, it is Google’s servers that decide when and how often to insert a TrueView ad into a given ad slot,” Adalytics researcher Krzysztof Franaszek wrote in the company’s TrueView study.
Before September 2021, Google allowed the delivery of “video action campaigns” only on YouTube and then removed the ability to opt out of the video partner network. A Google spokesperson told the FT, however, marketers “can work directly with their Google representative if they wish to opt out of Google video partners.”
When Adalytics examined some ad campaigns, it found that 42-75 percent of TrueView ads were assigned to affiliate sites, which were found to serve video ads in muted, autoplay, covert, or “out-stream” video slots provide that did not meet the requirements of Google standards. Less than a fifth of the advertising budget went to YouTube.com or the YouTube app.
Franaszek also documented finding TrueView ads on websites criticized for allegedly spreading disinformation, including pravda.ru, a Russian state media site.
“This is an unprecedented opportunity for advertisers to recover billions of dollars in refunds and lawsuits,” said Claire Atkin, co-founder of Check My Ads, a regulator that prosecutes abuses in the digital adtech industry. “This investigation ridicules all the efforts Google has made towards sound business practice in the advertising industry.”
Article updated to clarify that Adalytics research is on Google partner video sites and not the YouTube platform.