One of the key reasons Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) — while it was still called Google — grew from nothing to an advertising behemoth in just a few years lies in the fact that much of what it offered was automated. Without the need for human intervention, it could cost-effectively offer ad space to advertisers with the click of a button (and payment, of course). This did wonders for GOOGL stock.
There does come a time, however, when a “hands off” approach to … well, pretty much everything can cause problems.
Alphabet stock holders were made well aware of that reality just last week when a couple of advertisers suspended their ad spending at YouTube when it was realized their advertisements prefaced some distasteful hate speech that surfaced at the popular online video venue.
In its defense, the company didn’t know. As was noted, ad placements are essentially automated. On the other hand, it’s arguable to say GOOGL should have known something like that could happen, and prevention measures should have been put in place. The debacle may force Alphabet to operate its advertising service with at least a little more human involvement.
A Big Mistake for GOOGL Stock?
Although several companies pulled the plug on their YouTube ads, AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) were a couple of the bigger names that called it quits … at least for the time being.
There was no specific event that prompted the boycotts, nor is it a brand new realization. But, the matter had been boiling over for a couple of weeks now, with an anti-Semitic clip video called “Jewish World Order” serving as the poster child of how vile the digital video venue can be, and how damning the power of association can be to a brand.
It’s theoretically not supposed to happen. Aside from the fact that ads are intended to be targeted to a plausible…