Whoa.. Major Brands Are Seeing Their Google Ads Run Next To Neo-Nazi Ads

Pivotal Research Group has downgraded Google’s stock to “hold” from “buy” on Monday as well as reduced its price target on Alphabet shares to $950 from $970.

The downgrade came after media buying agency Havas pulled spending from YouTube and Google Display Network in the U.K. last week.

Several U.K. companies have pulled their ads from the advertising giant over concerns of where their ads are appearing. Ads from brands like Mercedes-Benz and Marie Curie had been seen next to neo-Nazi and jihadist content.

On Monday, Google’s EMEA president of business and operations, Matt Brittin, apologized for the misplacement of advertising.

“While Google has apologized for the incidents, and while the scale of the underlying problem may be relatively small in absolute terms, for large marketers, any one instance of an inappropriate brand placement may be enough to seriously harm a brand’s business value,” Pivotal’s Brian Wieser wrote in a report.

Pivotal stated that the U.K. Government, L’Oreal, RBS, HSBC, Sainsbury’s, Sky, Marks & Spencer, McDonald’s and Audi have also suggested they would pull ads from the Google-owned platforms over similar concerns.

“Overall, we think that the problems which have come to light will have global repercussions as UK marketers potentially adapt their UK policies to other markets and as marketers around the world become more aware of the problem,” Wieser said. “This should curtail spending slightly from the large agency-serviced brands which probably account for a quarter of spending on Google.”

According to eMarketer, Google has the world’s biggest digital advertising platforms and will account for 40.7 percent of all U.S. digital advertising budgets in 2017.

Disclaimer: We have no position in Alphabet Inc. Class A (NASDAQ: GOOGL) and have not been compensated for this article.