By Jack Nicas 

AT&T Inc. and Verizon Communications Inc. on Wednesday pulled much of their advertising from Google over concerns that their ads may have run alongside controversial videos, extending the financial impact of a controversy that was once just a public-relations issue for Google.

AT&T and Verizon are more than just advertisers on Google. Both wireless carriers also are building online video and ad services to compete with Google.

AT&T said it is suspending all of its advertising spending on Google except for search, encompassing all ads on Google's YouTube site and the more than 2 million third-party websites in Google's advertising network.

"We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate," AT&T said, adding that its move would last "until Google can ensure this won't happen again."

Verizon said it was pulling all spending from so-called programmatic advertising, which uses software to automatically place ads across the web. Such advertising includes ads on YouTube and Google's network of third-party sites.

"We are working with all of our digital advertising partners to understand the weak links so we can prevent this from happening in the future," Verizon said.

The companies' moves came a day after Google unveiled changes to its ad policies and enforcement designed to keep ads away from controversial sites and videos. A Google spokeswoman declined to comment on AT&T and Verizon, but said the company is working on measures "to further safeguard our advertisers' brands."

Both AT&T and Verizon are positioning themselves as budding competitors to Google for advertising dollars. Verizon owns AOL and is in the process of buying Yahoo, both internet firms directly compete with Google for digital-ad spending. AT&T is pitching its proposed merger with Time Warner Inc. as a defense against Google's growing power in the industry.

AT&T and Verizon are the largest companies yet to reduce spending on Google following reports that it placed brands' ads on YouTube videos supporting terrorism.

Other companies, including HSBC Holdings PLC, Royal Bank of Scotland Group PLC, L'Oréal SA and Volkswagen AG's Audi have all reduced spending on Google advertising over the past several days in response to the controversy.

Google has apologized to marketers for any cases in which their ads appeared next to inappropriate content.

Write to Jack Nicas at jack.nicas@wsj.com

 

(END) Dow Jones Newswires

March 22, 2017 18:10 ET (22:10 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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