Commentary

Will Brands Restore Spending On YouTube But At Lower Levels?

Google posted strong first quarter earnings yesterday, with seemingly no material impact so far from the fallout over marketers' suspension of advertising on YouTube.  What remains to be seen is whether that impact will hit in the second quarter -- and further, whether marketers actually restore their advertising on the video hub or not. Even if they restore some advertising, will it be at a lower level? And will that be permanent?

Of course YouTube represents just one strand of ad revenue for Google. It would be wise for Google to continue diversifying its revenue base and to decrease dependence on advertising revenue. Still, Google executives touted YouTube’s revenue growth in particular.

During the earnings call, there were a few requests for hard data on the impact of the recent controversy, noted Kevin Ryan, CEO, Motivity Marketing. “When none was offered (either because it doesn’t exist or it’s immaterial), the discussion shifted back to the softer side of the issue: managing the relationship with advertisers and setting expectations.” Google seems to be emphasizing relationship management vs. any potential revenue loss.

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Ryan took two things away from this: “We have moved past the paranoia/ hysteria phase in which everyone involved realizes that closing the valve on advertising hurts everyone’s bottom line, and that the digital business, in all its 1 and 0 glory, is still bound to the softer side of selling: the relationship.”

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