The advertising industry is seeking refunds for skippable YouTube ads

Advertising industry figures are demanding significant refunds from YouTube after new research suggests millions of ads on partner sites are being hidden from users in ways that breach the Google-owned group’s policies.
Adalytics, a digital ad analytics group, has researched YouTube’s “TrueView” system, where users can skip watching an ad after five seconds.
It found “hundreds of thousands of websites and apps” where these ads play imperceptibly in the background, without sound, and on automatic loop. This appears to be a way to avoid viewers noticing the videos so that ads are not skipped, but the strategy violates Google̵[ads1]7;s terms.
Google, which denied the researchers’ claims, tells advertisers that a key selling point for its “choice-based ad format” is that they are only charged if a user watches the entire clip or at least 30 seconds of it. If it is skipped, an advertiser pays nothing.
TrueView ads are a core product of YouTube’s $30 billion-a-year business. Ebiquity, a media investment research group in London, said its global clients typically allocate 40-50 percent of their YouTube budgets to skippable ads.
They will play “in-stream”, meaning viewers watch them “before, during or after other videos on YouTube” or through Google’s video partner network of “high-quality publisher websites and mobile apps where you can show your video” ads to viewers outside of YouTube» .
But Adalytics, which used web crawler data to scour the internet and also worked with dozens of media buyers from brands and agencies, found that thousands of TrueView ads were being placed “out-stream” — tucked away on parts of a website where viewers had little to no interaction with them. The Wall Street Journal previously reported on some of the findings.
Joshua Lowcock, global head of media at UM, a New York-based advertising agency, said he expected YouTube to investigate the problem and refund affected advertisers. Adalytics created a list of these hits, which includes dozens of leading brands such as JPMorgan Chase and Johnson & Johnson, as well as the US Department of Health & Human Services.
“This is a systemic failure by Google and YouTube to properly oversee and enforce their policies,” Lowcock said. “Google must have a qualified third party conduct a fully independent audit of its policy enforcement, as well as this error, and refund all affected advertisers.”
He added: “It is symptomatic of problems that arise 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 immediately request a refund.”
Ruben Schreurs, a Netherlands-based product manager at Ebiquity, said the research is likely to have a “significant negative impact” on Google’s perceived quality and trustworthiness in the $400 billion digital advertising industry.
Google published a blog in response, defending the quality of its partner network, saying the report makes some “grossly inaccurate claims”. After reviewing several websites shared by the Financial Times, the company also said it would take appropriate action, including removing all ads on the pages.
“We have strict guidelines that all third-party publishers 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 allow advertisers to measure where their ads run,” said Google to FT.
Inefficiency in the digital advertising industry is widespread. 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” sites designed to flood the user with ads and get unintended clicks.
Google tells advertisers that TrueView ads will only appear on “high-quality publisher sites” that are “carefully vetted and must meet Google’s inventory quality standards.” The company stipulates that TrueView ads should not start on passive scrolling, “must be audible by default,” and that content between ads must also be “at least” 10 minutes.
But Adalytics found many examples that violated these rules. On one site, scrolling initiated a muted video feed with five back-to-back ads in the lower right corner of the screen. It was followed by a one-minute “movie” of random content, before five more ads began to play. Each “view” counts as an engaged consumer.
Advertisers are often unaware of exactly where their ads are appearing because Google restricts the use of independent third-party tracking tools that can accurately measure how and where digital ads are placed.
“It is ultimately Google’s servers that determine when or how often a TrueView ad will be inserted into a particular ad slot,” Adalytics researcher Krzysztof Franaszek wrote in the company’s study of TrueView.
Google allowed “video action campaigns” to run exclusively on YouTube until September 2021, when it removed the ability to opt out of the video partner network. A Google spokesperson told the FT that marketers can “work directly with their Google representative if they wish to opt out of Google’s video partners”.
When Adalytics sampled some ad campaigns, it found that 42-75 percent of TrueView ads were assigned to partner sites that were identified as serving video ads in muted, auto-playing, hidden or “out-stream” video slots that didn’t meet Google’s standards. Less than a fifth of ad budgets went to YouTube.com or the YouTube app.
Franaszek also documented finding TrueView ads on websites that have been criticized for allegedly spreading disinformation, including pravda.ru, a Russian state media site.
“This is an unprecedented opportunity for advertisers to reclaim billions of dollars in refunds and lawsuits,” said Claire Atkin, co-founder of Check My Ads, a watchdog that tracks abuse in the digital adtech industry. “This investigation makes a mockery of any effort Google has made toward sound business practices in the ad industry.”
The article has been updated to clarify that the Adalytics survey relates to Google partner video sites rather than the YouTube platform.