According to the damning report, an ad appearing alongside a YouTube video typically earns advertisers $7.60 per every 1,000 views, meaning companies were unwittingly funding extremists and inciting hatred and violence to boost their profit.
Matt Brittin, the head of Google's Europe, Middle East and Africa division, said today the group has reached out to companies affected by the placement of advertising next to videos that advocate terrorism.
Marketing giant Havas, whose clients include O2 and Royal Mail, pulled its ads from YouTube last week, while Publicis said it is reviewing its relationship with Google and YouTube and WPP, the world's largest advertising firm, has written to major clients asking them how they would like to respond.
"It is inexplicable to us that Google can move very fast to remove material from YouTube when it is found to be copyrighted, but that the same prompt action is not taken when the material involves proscribed organisations and hateful and illegal content".
Pivotal Research Group downgraded Alphabet stock from buy to hold after media buying agency Havas pulled spending from YouTube and Google Display Network in the U.K last week.
The apology from Matt Brittin, president of Google's Europe, Middle East and Africa division, came after United Kingdom banks HSBC and RBS, along with major retailer Marks and Spencer (M&S), made a decision to suspend their adverts from appearing on platforms such as YouTube.
Also, it has been giving more power to users to report content they find offensive.
In order to ensure brand safety, we are pausing activity across Google platforms whilst the matter is worked through.
When pressed to explain what concrete steps the company would take to flag and remove questionable content, However, Brittin remained evasive.
He also said that brands would be given more control over where their ads appear. "We are working with Google to resolve the issues so that we can return to using this valuable platform in the United Kingdom".
Google is reviewing its ad policies and will make changes to how it controls and enforces appropriate advertising on its platforms. "We need to stand back and not roll from one issue to another", he added.
"Of course we're looking again at how we improve what we're doing on enforcement".
"We have always said Google, Facebook and others are media companies and have the same responsibilities as any other media company", Mr Sorrell said, per The Independent.