Advertisers demand billions in refunds from YouTube over skippable ads

YouTube advertisers demanded refunds from the Google-owned video sharing service after a study found viewers were allowed to entirely avoid commercials that play imperceptibly on third-party sites, violating the company’s own terms of service.

Adalytics, a company that analyzes digital ads, issued a report accusing Google of “misleading” Fortune 500 companies, small businesses and the US government about TrueView, the search giant’s own “proprietary” service that gives users the option to skip ads.

According to the Adalytics report, advertisers lost billions of dollars as a result of “in-stream ads [that] were served muted and auto-playing as out-stream video or as obscured video players on [hundreds of thousands of] independent sites.”

“In-stream” refers to ads that are seen “before, during, or after other videos on YouTube.”

These ads were also played on sites that either contain misinformation and conspiracy theories or “do not currently exists, or do not contain any ads whatsoever, raising the possibility that either Google’s placement reporting tools have software bugs or are susceptible to deception by invalid ad traffic,” according to Adalytics.

Google touts a “careful vetting” system of approving “high quality Google Video Partners” outside its YouTube platform that it seemingly doesn’t abide by, the firm alleged.

Google’s policies state that TrueView ads will be played before sites’ main video content, and will be skippable and audible.

“This is an unacceptable breach of trust by YouTube,” Joshua Lowcock, global chief media officer at ad agency UM Worldwide, told The Wall Street Journal.

“Google must fix this and fully refund clients for any fraud and impressions that failed to meet Google’s own policies,” he added.

For ad placements on third-party sites, brands typically pay $100 for every 1,000 completed views of their ad. They’re charged a premium for more desirable ad placements, such as in the margins of a third-party site’s landing page.

For TrueView campaigns, Fortune 500 brands could spend upwards of $75,000, according to Adalytics’ report.

Google has denied the claims.

A rep for parent company Alphabet Inc. told The Wall Street Journal on Wednesday that advertisers can clearly see that their ads may run on third-party sites, plus how much is spent there.

The spokesperson also noted that advertisers can easily opt out of Google’s ad programs.

When reached by The Post, a company spokesperson referred to a blog post titled “Transparency and brand safety on Google Video Partners.”

“The report wrongly implies that most campaign spend runs on GVP rather than YouTube,” the blog states.

It also insists that “advertisers are in control,” though Adalytics pointed to media buyers’ testimonials in its report, which said they “feel like it’s not a transparent investment.”

Additional Reporting by Shannon Thaler