March month was full of crisis for YouTube when major advertisers across the globe pulled their advertisements from their sites due to offensive and hateful content videos appeared across their advertisements which would directly damage the reputation of their brand products. This was a disaster for YouTube but had very less impact on the revenue of their parent company, Alphabet. During their announcement of their second quarter revenue which was $26 billion, the company clarifies that this revenue generated combined of advertisements placed on Google, YouTube and other internet services. Shockingly this revenue was 21% higher than the revenue earned by the parent company of last year.
The performance of advertising in revenue generation is above expectation for the organization because the revenue increased by 18 percent from $19.1 billion to $22.7 billion and the contribution of YouTube is nothing less than the mobile search results. During the ending of the first quarter of the year 2017, this issue was raised by many major advertisers and all leading newspapers and advertisers considered this as a serious issue for both YouTube and its parent company Alphabet. Few major client who quit advertising on YouTube include names like AT&T, Johnson and Johnson, HSBC bank, McDonald’s, The Guardian newspaper etc.
Immediately Google announced corrective action plan of hiring a new team of employees who would scan those videos and flag accordingly so that precautions are taken that the advertisement doesn’t appear near any video promoting hatred or terrorism. The policies were made stringent and the company decided not to place any advertisements beside videos with less than 10000 views. This strategy ensured that the channel is following the advertising policies of YouTube and the community guidelines. Although this incident hampered the image of YouTube and Alphabet to a large extent, their preventive action plan assured that the situation would be soon under control and it didn’t have any impact on their revenue for this quarter.
YouTube has a large viewership with more than 1.5 billion people viewing YouTube on a monthly basis. According to the reports, every viewer would spend at least one hour of his day on YouTube through their mobile phones or laptops or tablets. Alphabet manages to earn revenue through Paid per click and this service managed to increase in terms of revenue by 61 percent in comparison to last year and 15 percent in comparison to last quarter. YouTube is one of the promising revenue generators for Alphabet Inc and it can be clearly visible through the records of the second quarter of this year.