Ad Blocking is on the Rise: Is There a Solution?

Hal Conick
Marketing Insights
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Key Takeaways
​What? Ad-blocking software is putting the online advertising ecosystem in danger. An eMarketer report says nearly 70 million users will use an ad blocker by year's end.

So what? Industry experts say this could cost advertisers and publishers as much as $42 billion this year.

Now what? Publishers, advertisers and users are all looking to find equilibrium​ in the new age of digital advertising. 
July 1, 2016

The online advertising ecosystem is in trouble. Can publishers, advertisers and ad blockers come together for a solution?​

The online advertising ecosystem is broken. 

“There’s no question about that,” says Ari Brandt, co-founder and CEO of MediaBrix, which delivers in-app advertisements.

Brandt pointed to a June report from eMarketer, one that likely didn’t surprise anyone in publishing, advertising or ad blocking. By the end of 2016, the report claims nearly 70 million users will use an ad blocker, 34.4% more than in 2015​. That figure is poised to jump 24% to 86.6 million in 2017. Earlier this year, PageFair reported 22% of the world’s smartphone using population was already using ad blockers on the mobile web. 

Thus far, the industry has been at a loss for how it can alleviate the losses. Marketing News previously reported that if ad blockers keep picking up steam, advertisers and publishers may end up missing out on $42 billion by the end of 2016

So what is the solution? There will likely be an incremental increase in ad-blocker use each year. Is there a sensible way to come to an agreement or make up for lost ad dollars?

‘The Right Reaction’: Create a Better Experience

Publishers and advertisers have been reacting to the ad-blocking problem, Brandt says, but they haven’t yet had “the right reaction.” 

“A lot of industry pundits, including the [Internet Advertising Bureau] talk about creativity as the solution. I respectfully disagree,” he says. “I think if an ad is disruptive, it doesn’t matter how good the creativity is: It’ll still be disruptive.”

Advertisers, brands and publishers keep pushing ads that are “legacy holdovers from desktop,” he says, defying a clear message from users: They simply don’t want these kinds of ads. 

“Essentially, all [the mobile web] did was replicate desktop ads and make them 10 times smaller,” he says. “Nobody thought about the user experience. … I think the real key here is receptivity and getting users receptive to a brand message. The only way you can do that is by understanding what the user needs and adding value to that as a brand.”

This, essentially, means giving users control of their ad experience. Allowing consumers to pick and choose their interaction with ads instead of being forced into viewing them can build good will, he says. Brandt’s company has been built on that model, and he believes the opt-in rate, brand perception and brand lift all validate that it works. 

“I think it’s incumbent on the publishers to create better user experiences” he says. “Then there won’t be a need to block ads.”

Choice may be powerful for consumers. A January study from Teads found 80% of users would reconsider installing an ad blocker if they could easily skip or close ads. 

Is More Creativity Needed?

Although some believe choice is necessary, others have called for what Brandt respectfully disagreed with: more creativity in ads. 

Brian Sheehan, professor of advertising at Syracuse University’s S.I. Newhouse School of Public Communications, says publishers and programmers have been realistic about the “potentially staggering” ad-blocker numbers, but finding a creative solution to this issue is tricky. 

To combat being blocked, Sheehan said publishers should interrupt with fewer ads, make sure ads are creative and find a way to integrate advertising content with the context of the space they’re in, otherwise known as native advertising

“A key caveat is that native solutions only have value when they make sense,” he says. “Native advertising is a double-edged sword. When the result is ad-driven pabulum, the publishers and programmers have a bigger problem. People blocking content, not just ads.”

In a column on AdAge, Sheehan cited an example of a native ad that worked: a collaboration between Netflix and The Wall Street Journal on an article prior to the launch of Netflix original series “Narcos.” It was “terrific content, a great read and a hell of an ad,” he wrote.

WIRED’s Success: Asking Nicely to be Whitelisted

During the 2016 ANA Advertising Law and Public Policy Conference, Tony Pace, chairman of the Association of National Advertisers and owner of marketing consulting firm Cerebral Graffiti, said companies may get users to turn off their ad blockers one simple way: asking nicely.

WIRED magazine has been successful with this method. In February, WIRED attempted to bargain with its readership: Pay $1 each week for an ad-free version of the website or whitelist the website in ad-blocking software. 

The site’s post said it knew why tech-savvy readers wanted to use ad-blocking software, whether it be faster browsing, concerns of being tracked or simply a desire to not see ads. Even so, advertisers supported WIRED’s staff, which creates the content its users love. If users wanted the same content, they needed to play into the new ecosystem.

Five months later, Kim Kelleher, chief revenue officer and publisher of Wired Media Group, says WIRED’s effort has “exceeded projected goals” for whitelisting and ad-free subscriptions. Kelleher didn’t give success metrics, but says she’s encouraged by the publication’s “step in the right direction.”

“I can’t speak for other brands, but I think it certainly helps that WIRED has such intelligent and savvy readers,” she says. “We’ve received a lot of thoughtful feedback from them and are taking any and all suggestions into careful consideration as we chart our path for the future of the site.”

Coming to an Agreement

Many want advertisers and publishers to work together with ad-blocking companies. Till Faida, CEO of Eyeo GmbH, which runs the Adblock Plus software, says establishing a deal or agreement of this kind is “what we’re all about.”

In 2015, Faida’s company started a program called Acceptable Ads, which includes Microsoft, Google and Taboola, and has a goal of creating less intrusive ad formats for a better ecosystem for all involved. 

Eyeo has accepted payment from more than 70 programs for inclusion in the Acceptable Ads program, Jack Marshall reported in The Wall Street Journal in 2015. He wrote that Eyeo has faced criticisms for being an ad-blocking company trying to deem which companies get to pass through its filters. 

“Currently we are working on an independent committee that should take over those efforts,” Faida says in response to this criticism.

Now, advertisers and publishers must pick between change and a huge loss of money. Brandt says publishers, specifically on the desktop side, are sitting ducks if they don’t change.

“Our industry got a little greedy, maybe a lot greedy,” he says, adding that serving an impression has become of greater concern than user experience. “Now the users are in control and there’s a huge backlash.”


Author Bio:

https://auth.ama.org/publishingimages/halheadshotcolorcorr.jpg
Hal Conick
Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.
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