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By Suzanne Vranica 

Google wants to substantially limit the information a key auditor of YouTube can share about the risks of advertising on the video service, according to people familiar with the situation, highlighting tensions between the tech giant and Madison Avenue.

The auditor, New York-based OpenSlate, is refusing to sign a contract that would prevent it from reporting to clients when ads have run in videos with sensitive subject matter, including hate speech, adult content, children's content, profanity, violence and illegal substances, according to an email the firm sent this weekend to ad agencies.

Under the terms Google proposed, OpenSlate would need approval from Google to share certain metrics about YouTube's content, one of the people familiar with the situation said.

OpenSlate works with leading brands and ad agencies, like McDonald's Corp., Pfizer Inc., Unilever PLC and WPP PLC, providing them with information to assure that their ads on YouTube are appearing alongside content that marketers deem safe.

In the email to ad agencies, which was reviewed by The Wall Street Journal, OpenSlate said it hasn't been able to reach an agreement with Google to be included in a new, updated version of YouTube's ad-measurement program.

"The terms of this program would severely limit OpenSlate's ability to deliver transparency to clients," the firm said in the email. The firm also said in the email that it remains open to an agreement that doesn't include such restrictions.

Alphabet Inc.'s Google said in a statement, "Our brand safety partners are always able to share their independent reporting with clients." Google said OpenSlate isn't currently among its official brand-safety partners. The company didn't comment specifically on whether it has proposed restrictions for OpenSlate in any categories of content, citing contractual confidentiality obligations during active negotiations.

Google said it is expanding the number of measurement companies it works with, including brand-safety firms, changes expected to be made public Monday. "We know how important it is for our industry to have a healthy third party ecosystem of trusted independent solutions for driving and measuring marketing performance on YouTube," the company said.

Google said it has invited OpenSlate to participate in its expanded program.

It is unclear if the partners for the newly-expanded program will face the same restrictions Google proposed to OpenSlate.

"We are able to freely report across the suite of services we offer, including viewability and invalid traffic, as well as brand safety and brand suitability," Integral Ad Science Inc., one of Google's approved brand-safety partners, said in a statement. Representatives of DoubleVerify Inc., Google's other approved brand-safety partner, had no immediate comment.

The dispute comes amid upheaval in the online-ad world because of the coronavirus pandemic. A major contraction in ad spending threatens the revenue of all companies that sell digital ads, including giants like Google and Facebook Inc. Being on good terms with Madison Avenue is as important as ever.

Brand safety has become a critical issue for advertisers over the past few years after many brands discovered their ads were appearing next to objectionable social-media content, including on YouTube videos promoting racism or hate speech.

In 2017, many big brands temporarily suspended their ad spending on YouTube amid evidence that some ads were appearing alongside content considered to be objectionable. Last year, several brands suspended their ads on the site after revelations that inappropriate user comments were appearing under videos featuring underage girls.

Despite the controversies, Google has remained the world's largest advertising platform. It is expected to have a roughly 30% share of the $369 billion world-wide digital ad market this year, according to research firm eMarketer. YouTube had $15.1 billion in ad revenue for 2019.

YouTube has taken steps to assuage marketers' concerns, including improving the technology it uses to screen videos and by allowing third-party measurement companies to monitor where ads appear on the site.

Advertisers have become dependent on these so-called brand safety firms, like OpenSlate, not only to avoid placing ads next to controversial content but also to make sure they are spending their money wisely. For example, advertisers that are trying to target adults would want to make sure that their ads avoid running on children's content.

Under the terms Google proposed to OpenSlate, the types of information OpenSlate would be allowed to share remain unclear.

In its email, OpenSlate assured ad agencies that even if it is not included in the new measurement program, it will still be able to measure and score a large amount of YouTube content because it uses public data about the more than 700 million videos appearing on YouTube.

However, OpenSlate might not be able to analyze Google Preferred, YouTube's curated lineup of top content that brands pay a premium to advertise on, since Google shares that list with approved partners.

Write to Suzanne Vranica at suzanne.vranica@wsj.com

(END) Dow Jones Newswires

April 19, 2020 20:17 ET (00:17 GMT)

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