A report from analysts at Nomura Instinet suggests that Google, a subsidiary of Alphabet Inc (NASDAQ:GOOGL), could lose up to $750 million from the YouTube advertiser boycott, Business Insider reported.
According to the media reports, more than 250 brands are boycotting Google’s display ads network and YouTube because of ads that appear next to extremist content.
However, Google’s search advertising is not impacted by the ad boycott.
In note to investors, the analysts said that YouTube would take a 7.5% hit to its revenue, which is estimated to be $10.2 billion for 2017.
According to the report, five of the top 20 advertisers the United States – responsible for 7.5% of the ad revenue in the US – have pulled their advertising from Google’s display ads network and YouTube.
“Ad buyers are likely to demand greater direct control over ad placement, which could take time and resources to implement,” the analysts said.
Google has promised that it would engage more people to review content. Also, the search engine giant has said that it would develop more controls for marketer and advertisers.
Furthermore, the analysts noted that the ad boycott will likely to benefit traditional TV companies.
Meanwhile, analysts at RBC Capital Markets and Morgan Stanley believe that the ads boycott won’t have a major impact. According to Morgan Stanley, the top 100 advertisers on Google likely represent less than 20% of the search engine giant’s total revenues.
Shares of Alphabet Inc (NASDAQ:GOOGL) were trading down 0.16% to $833.78 on Monday. The stock is up over 5% year-to-date. During the last six month, the stock have gained 2.8%, while its price has been increased by 10.41% during the last 12 months.
