Shares of Alphabet dipped last week after companies like AT&T and Verizon started pausing their campaigns because their ads were being placed next to extremist YouTube videos, but the stock has already started to bounce back—even as brands like Starbucks, Walmart, and many others piled on. But not everyone thinks this is going to be a huge deal to Google in the end. Why? Because Google (and digital advertising giants in general) gets most of its ad revenue from small and mid-size brands. Citing research from GroupM estimating that only 30% of digital ad spending comes from big brands, analyst Michael Nathanson wrote last week that the digital ecosystem is especially resilient for that reason:
"[W]hile major advertisers like P&G or agencies like Havas can publicly protest, they do not have the same impact on a Google or a Facebook as they have on a CBS or NBC. In other words, if a major brand marketer or agency moves money to TV and out of digital, the TV industry will see the benefit whereas the digital industry might not truly feel it."
Worth noting: Nathanson's note was written before the big ad revolt led by PepsiCo and others that we wrote about on Friday. Plus, 30% is still a sizable chunk of revenue. But it's a reminder that Google has a lot of size to spare.