More US companies suspend ads on YouTube over “offensive content”

But then major US advertisers like AT&T (T) and Verizon (VZ) announced on Wednesday that they would be following suit after it was discovered that their advertisements were appearing alongside offensive or controversial videos, some of which was published by the Ku Klux Klan and others supporting terrorism.

YouTube is a major advertising channel and one of many platforms in Google’s Display Network that generates billions in ad revenue for the search giant.

Pharmaceutical giant Johnson & Johnson (J&J) is the latest major advertiser that pulled its ads from YouTube over inappropriate placement concerns.

“Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms”, they added.

However, the analysis by the Times suggests this is not working and ads appear against content that violates Google’s policies. Verizon said it discovered its ads were appearing on “non-sanctioned websites”, and that it takes “careful measures to ensure our brand is not impacted negatively”.

Shares of Google parent Alphabet ended down 1.2 percent, or $10.15 per share, at $839.65 on the New York Stock Exchange. Under Google’s advertising system, creators of such videos get paid around €7 for every thousand clicks. Research from industry bellwether eMarketer suggests the company will command 40.7% of all US digital ad revenue this year, with dominance in key areas like search and display advertising continuing to grow.

Whether the recent events are a mere blip on the radar for Google or a harbinger of bigger problems to come may depend on whether the company can quickly improve its technical tools to give advertisers more control over where their ads appear. Even if 10% of this revenue went away (which would seem draconian) it would only impact GOOGL’s net revenue by 1%.

The “backlash” could broaden into a rebellion against the market practice of software programming ad placements, slowing not only Google’s revenue but also that of other internet firms, according to Jackdaw chief analyst Jan Dawson. It may not be as social media-friendly as, say, a politically charged ad campaign, but withholding money is the best way for these businesses to make a real change. “There is no doubt there are serious flaws that need to be addressed”.

Google and the leading social network Facebook stopped publishing ads on websites posting sensational and fabricated stories following controversy about the role “fake news” may have played in the United States presidential election past year.

This is a scandal for Alphabet’s Google unit that has been spreading since last week, with more and more large ad buyers withdrawing some ads.