Multiple advertisers put global YouTube ads on hold in wake of child exploitation scandal

Jaap Arriens | NurPhoto | Getty Images

Several big-name advertisers have stopped advertising on YouTube after their ads appeared next to videos showing children in their underwear.

Companies including Mars, Adidas, Hewlett-Packard and Deutsche Bank have suspended their YouTube ads over the past week after their brand names appeared next to videos of scantily-clad children with lewd comments posted underneath. The scandal came to light after an investigation by U.K. newspaper The Times.

A Mars spokesperson said in an emailed statement that it had stopped all of its online advertising on YouTube and parent company Google globally while it works with the tech giant and its agencies "to understand what went wrong." Adidas, meanwhile, said it had suspended advertising in various countries last week and had re-started advertising following reassurances from YouTube.

Jaap Arriens | NurPhoto | Getty Images

HP has also suspended its advertising globally on YouTube. "We are deeply troubled to learn that one of our advertisements was placed in a terrible and inappropriate context," a spokesperson said in a statement emailed to CNBC.

"HP has strict brand safety protocols in place across all online advertising, including YouTube and this appears to be the result of a content misclassification by Google."

Lidl in the U.K. said it had suspended all YouTube advertising with immediate effect. "It is completely unacceptable that this content is available to view, and it is, therefore, clear that the strict policies which Google has assured us were in place to tackle offensive content are ineffective," a spokesperson said in an emailed statement.

Deutsche Bank said it was looking into how its adverts appeared next to such content. "As always, our digital marketing agency applied filters to prevent our advertising appearing alongside inappropriate content and we are investigating how the situation arose," a spokesperson said in an email to CNBC.

Drinks company Diageo, owner of brands including Smirnoff, Baileys and Guinness, said it was stopping all YouTube advertising immediately. "We are committed to the highest standards of marketing and have zero tolerance for any circumstances that fall below our strict marketing codes," a spokesperson said in an emailed statement.

Adidas, which has previously said it will focus on digital advertising over TV, said it takes the issue very seriously. A spokesperson added in an email: "We recognize that this situation is clearly unacceptable and have taken immediate action, working closely with Google on all necessary steps to avoid any re-occurrences of this situation."

A YouTube spokesperson called such content "abhorrent and unacceptable," in an emailed statement and last week it blocked "inappropriate" comments on videos featuring minors, it said in a blog post.

Ad boycott at YouTube could cost Google millions
Ad boycott at YouTube could cost Google millions

"There shouldn't be any ads running on this content and we are working urgently to fix this. Over the past year, we have been working to ensure that YouTube is a safe place for everyone and while we have made significant changes in product, policy, enforcement and controls, we will continue to improve," the spokesperson added.

This follows an advertiser strike earlier this year after ads were posted next to extreme content on the video-sharing site. HSBC, L'Oreal and U.K. retailer Marks & Spencer pulled advertising and Google's EMEA President of Business and Operations Matt Brittin apologized at the time.

About 400 hours of content is uploaded to YouTube every minute, Brittin said in March, claiming that 98 percent of "removals" happen within 24 hours.

YouTube content creators can earn money through ads appearing on their videos, with a revenue split with YouTube parent company Google. Google itself is now part of a conglomerate called Alphabet.