Digital under threat from ad blocking?

September 16, 2015

With Apple expected to enable adblocking on Safari later this year, how will the rise and rise of ad blocking affect us all?

Having attended a Search Council meeting at the IAB last week, a topic which was discussed fervently by all was the very real and current threat of ad blocking. Digital media and advertising industries are just coming to grips with this, and the threat has induced a slow-building panic for some. In August Adobe and anti-ad-blocking firm PageFair reported that 198 million people around the world use ad blockers, which will cost publishers an estimated (and refuted) $21.8 billion in revenue this year.  Later this year Apple will enable ad blocking on its mobile Safari browser, on iPhones and iPads, further fuelling adblocking usage.

On the remainder of 2015, Scott Cunningham, a senior VP at the IAB and general manager of the trade organization’s Technology Lab, said “the ad-blocking conversation got ratcheted up based on what we were hearing from publishers and their data and the rise of [ad-blocking] incident rates they were seeing.” The IAB are trying to get ahead of it in stimulating open dialogue and hosting leadership summits, pricking the issue as adblocking becomes more commonplace.

Almost one in seven (15%) British adults online are currently using ad blocking software according to the IAB UK Ad Blocking report, conducted by YouGov. Among those currently using ad blocking software, 80% are doing so on laptops, 46% on desktop PCs. Less than one in five (19%) is blocking ads on tablets or mobiles.

Why people block ads

Adblocking software companies are billing their technology as consumer-friendly (one even had an ad in the FT recently), but these are for-profit organisations. It has been written that Adblock Plus are charging the likes of Google, Microsoft and Amazon to be whitelisted from their adblocking software, at a fee of “30% of the additional ad revenues” they would have made were ads unblocked. This means large sums of revenue for adblockers, and not publishers.

Advertising is the currency of the web which makes the internet ostensibly “free”. For those in the know, the internet is not a free service, with publishers (and their team of writers and creatives) reliant on generated ad revenue. With revenues diminishing, quality and quantity of content created is likely to diminish too; or access to sites will be reserved for those who pay. However, as IAB UK Chairman Richard Eyre succinctly puts it, “people don’t much like paying for anything, but advertising is very clearly preferred to any other form of transaction. It supports an ecosystem that works for creators of content and services and for users, hence the £7bn spent last year in the UK alone on internet platforms, £1.6bn of that on mobile devices.”

 

The IAB Tech Lab has organised separate working groups tasked with tackling different sides of the issue. One group is researching information about the type of people that use ad blockers, the question being how will people respond if content is no longer free? Interestingly large numbers of British adults are unaware that ads fund free content; only 44% are conscious that most websites are free – such as social networks, email, news, music streaming services – because they’re funded by advertising.

Another group are looking at how to improve the technology used to display ads so that ads will no longer be responsible for slower page-load times, which is one of the top reasons people install ad blockers. Mobile is the device where advertising formats can be least native and most intrusive since popups, banner ads and the such don’t function well – or in some cases, at all – on mobile. Which shifts the onus onto advertisers and publishers alike to ensure a certain standard of creative and relevance, to not drive consumers towards ad blocking.

I’m confident in the industry to learn, improve, evolve and adapt to ensure the user experience is put first and foremost. The threat of ad blocking could actually help get us to a better place, faster, accelerating innovation and relevance for all. One such early example is the IAB adopting HTML5 as the new standard for display ads, replacing Adobe’s Flash that causes pages to take longer to load and carries security vulnerabilities that have exposed people to hacking attacks.

One option discussed has been for the top 100 websites to not let anybody with ad blockers turned on to view their content, but the possibility of pulling this off is slim. The possibility of suing the ad-blocking companies is also being explored, with WPP Digital President and Xaxis Chairman David Moore saying the ad blockers “are interfering with websites’ ability to display all the pixels that are part of that website, arguably there’s some sort of law that prohibits that”. A strategy to counter the rise & rise of ad blocking is likely to emerge before year’s end.

 

In this month’s issue of The Drum, the feature article (and their new strapline), was ‘how marketing can change the world’. On this topic, Nick Law, global chief creative officer at R/GA, said “Sadly when we ask how marketing can change the world, it betrays our deep insecurity and desperate need to be seen as more than a bunch of feckless shills. In the last decade we’ve been furnished with technologies that help us enable change more directly. An interface turns a persuasive message into an action. Social media turns individual willingness into community action.” Marketing can change the world, because marketing is driven by people with purpose. The next generation of marketers are even more civic-minded, demanding that the companies they work for do their part.

The growing prevalence of ad blocking is a threat to revenues, yes, but revenues equate to the next generation of marketers, writers and creatives; agencies, publishers and brands. Speaking as a consumer, ad blocking is a threat to the “free” internet as we know it. Speaking as a marketer, it is a threat to our ability to change the world for the better.

 

David Walby, Search Director

Also see… June 2015: Richard Eyre, Chairman of IAB UK writes about the latest mobile ad blocking developments facing the digital industry


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