YouTube Engaged Kremlin In Decade Long Partnership Worth Up To $133M
Many of YouTube’s largest brands inadvertently sent staggering sums to the Russian government via the Alphabet subsidiary. The government of the Russian Federation commands a sprawling, dominant media empire on YouTube with at least 30,868,156,124 views as of May 21, 2019. Only three channels, out of more than 23 million on YouTube, have more views. YouTube runs ads on the lion’s share of Kremlin-owned channels, including the official channel of the Russian Ministry of Defense (153M views). Using a standard industry model to evaluate YouTube channels, we estimate YouTube has sent $73M of advertisers’ money to the Kremlin while earning $60M for itself through the partnership. We analyzed over 350,000 videos from 2017 to 2018 to develop our own model for a more precise estimate, though Google’s secrecy around YouTube performance metrics limited us to 2017 and 2018. For this period, we estimate the partnership’s worth to YouTube between $3.0M and $10.8M per year and to the Kremlin between $3.6M and $13.2M per year.
We classify a channel as Kremlin-owned if the channel explicitly states on its website that it’s wholly owned by the government or if it’s the official channel of a ministry of the Russian Federation. This includes official channels of the breakaway republics in Eastern Ukraine. The one exception is Channel 1 (Первый Канал), only 51% owned by the government but with a board chaired by the chief of Russia’s domestic intelligence service. YouTube labels Channel 1 as government-funded, as the Alphabet subsidiary did for 19 of the 52 government-owned, monetized channels reviewed.
In classifying channels as monetized or not, we found on state-owned channels ads for Nestle, booking.com, Universal, Nissan, Sanofi, Kellogg, Cunard, Disney, Universal, Samsung, Steam, Liberty Mutual, ESPN, Alaska Air, Groupon, Gatorade, Fridgidaire, ABC, monday.com, Grammarly, and even Google and YouTube themselves (though ads for Google on Google properties are managed by a third party). Most shockingly, we were served an ad paid for by the US Department of Health and Human Services. Screenshots confirming ads running on each channel can be found here. Unlike cable, which pays channels based on network license agreements, 55% of all revenue from ads served on a YouTube channel goes to that channel’s owner.
With Influence Marketing Hub, a standard industry calculator that uses count of videos, subscribers, and views to approximate a channel’s revenue, we reached a total take for the Kremlin of $89M across its 52 monetized channels. That figure would translate into $73M in revenue for YouTube. Since revenue per view changes over time, we built a model for a more precise estimate, but, as Google does not release performance metrics for YouTube, we relied on data from an industry analysis firm, which was only available for the past two years. We also wanted to account for differences in what advertisers pay across countries. Our models yielded $3.6M to $13.2M per year to the Kremlin and $3.0M to $10.8M to YouTube. Our full methodology and results can be found in our companion post.
Of the 52 channels analyzed, 26 appeared in the EU’s repository of disinformation cases in Europe. Two others, RT America and RT Arabic, fall outside the EU project’s remit, but were confirmed to have spread disinformation by the New York Times and Washington Institute, respectively. These 26 channels accounted for 70.1% of all views in the analysis.
This does not mean that all views in the analysis were disinformation. Many of the most popular videos are human interest stories or clips from comedies and dramas. The Russian licensee of the popular American singing competition The Voice is Kremlin-owned with a billion views. Rather, our analysis speaks to YouTube’s inability to protect advertisers’ brands and stop their money from going to bad actors.
In 2018, YouTube began labeling state-owned channels “to provide greater transparency” but the effort is scattershot with baffling omissions. For instance, YouTube correctly labels Russia 1 as owned by VGTRK, a government-owned conglomerate. But of the 12 channels listed on Russia 1’s profile as “VGTRK Channels on YouTube”, YouTube labels only 5. The roll out was supposed to be only for the US, but the labels still appear while using a Russian proxy (youtube.com redirects to youtube.ru using the proxy, confirming YouTube read the session as Russian).
The breadth and volume of brands that appeared on Moscow-owned channels suggest advertisers can’t or aren’t aware of how to stop their payments to YouTube from winding up with the Kremlin.
Advertisers must demand refunds for ads shown on Kremlin channels, just as they successfully demanded after YouTube placed their branding before Hezbollah and pedophiliac content. They must demand that YouTube makes it easy to opt-out of advertising on Kremlin-owned channels, without compromising support for PBS, BBC, or other quality journalistic outlets that receive public funds. With or without YouTube, advertisers can use this revelation to drive social impact. By advertising only on independent media channels, advertisers not only can protect their brands but provide a new space for Russian free press to thrive where the Kremlin once dominated.
