Companies Continue To Weigh Whether Their Brands Are Safe In The Hands Of Google

According to Pivotal Research Group's Brian Wieser, Alphabet Inc GOOG GOOGL's YouTube scandal is "widely known," but the company's actions haven't translated to any results as the list of companies pulling back ads on the streaming video platform continues to rise.

In a research report on Monday, Wieser pointed out that the growing ad scandal which began in the United Kingdom has since spread to American and even Australian brands. The analyst suggested that this indicates either Google's technologies to filter its content are "simply not good enough." Moreover, the fact that the scandal is weeks old may also signal that Google has not prioritized the situation, or perhaps worse, is unable to manage it.

"Why Google does not yet appear to have a handle on the situation is worth assessing," Wieser wrote. "Their public statements do not suggest to us that the company appreciates the degree to which advertisers are concerned, and the ongoing announcements of advertisers suspending their activity on Google properties reinforces our view."

Not Just Noise

Wieser suggested it is possible the press and advertisers have alternate motives to "hurt Google rather than something more fundamental." Specifically, press outlets have been "all-too-happy" to highlight Google's failings as a ploy to shame advertisers away from the platform.

But the fact remains that the press wouldn't have a story to cover if there wasn't one to begin with. In other words, if the very real problem didn't exist in the first place, Google wouldn't have anything to worry about.

Finally, the analyst highlighted the fact that many brands are already under pressure to reduce their spending or slow their spending growth and one brand cutting back could result in their peers following suit.

Shares remain Hold rated with an unchanged $950 price target.

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