OPINION: With Permission-based Advertising, Ad Blocking is Irrelevant
By Zach Eberhart
If you’ve been on the web lately then you’ve probably heard that it has begun its slow (but sure) death. It was inevitable really, all technologies come and go, following their predetermined fate without fail along the well-blazed product life cycle.
If you haven’t been on the Internet, or if you’re just outside the sensationalist bubble that can be the digital marketing news space, then this news probably comes as a surprise. We beat SOPA, we helped the FCC vote in favor of net neutrality, even China, despite the Great Firewall, has double the amount of Internet users than we have people. So who is the culprit responsible for the web’s demise? Well, it’s none other than ad blocking.
Ad blocking has been around for a while. You download it, install it, and browse the web ad-free save a few “acceptable ads.” The benefits of using an ad blocker are vast: no popups, no auto-play ads, no pre-roll, faster load times, and increased privacy. The drawbacks? Besides the loss of being potentially introduced to a new product that you probably don’t need, not many. I’ve never personally used one and am surprised whenever I hear about other members of the advertising industry using it. I have, however, been very tempted recently due to the rise of full page ads, pre-content ads, ads that generate and expand in the white space between paragraphs of an article, and pretty much anything that dramatically reduces my experience. Head over to Forbes to witness all of this and more in one place — it’s infuriating.
Many others are tempted as well. Around the world, there are nearly 200 million active users of AdBlock (Plus), the most popular ad blocking software in use. What may be more frightening (to advertisers), is that the use of ad-blocking software is only beginning to reach mainstream use. In the past year, ad blocking grew by 48% and 41% in the U.S. and internationally, respectively. If it stays at the same rate, one out of every four American Internet users will be using an ad blocker by 2016.
This is terrifying to publishers, for whom most revenue relies on advertising — especially display. In fact, ad blocking is estimated to cost publishers close to $22 billion in 2015. That’s no small sum and everyone, even the largest, most profitable publishers, is feeling it. The New York Times, arguably the best publisher in the world, recently saw a 5.5% year-over-year drop in revenue. If the Times is hurting, imagine the smaller publishers that see 100% of their revenue coming from display advertising.
While I’m sure you’re now battling the urge to write a tear-soaked check to all of your favorite content producers, consider why we are in this situation to begin with. In the late Nineties, website owners faced the problem of decreasing CTRs and ad blindness, which consumers developed over years of browsing uniform websites. However, instead of developing more engaging, less intrusive advertising, publishers resorted to pop-ups, the complete opposite. And while pop-ups eliminated problems of ad blindness, they prompted silent cursing at monitors like few things before.
Fast forward two decades later and we find ourselves in a situation where some users are completely fed up with online advertising: robbing their favorite publishers of revenue, bent on blocking all ads rather than just the annoying ones. And blocking all ad content is exactly what Apple allowed app developers to do with iOS 9.
See, many people allege that AdBlock runs like a modern day extortion racket. Ads are blocked, large ad-tech firms see their bottom lines get a little closer to losing a figure or a comma, some backroom conversations are had, ad-tech firms write a check for an undisclosed amount, and then they find themselves on the “Acceptable Ads” list (paywall). Of course, users of AdBlock have the option to turn off the allowance of “Acceptable Ads,” but when it comes enabled as a default, most of the less savvy consumers don’t get around to it (perhaps purposefully allowing it to negate some of the moral implications of using an ad blocker).
Although many suspect this as the means which publishers are added to the “Acceptable Ads” list, AdBlock sympathizer PageFair is quick to cite a legal battle in Germany in which they proved the contrary. Winning the case by arguing that the majority of the advertisers are added to the whitelist for free, it is still hard to ignore the millions of dollars worth of payments that regularly come through in exchange for inclusion.
To read AdBlock’s side of the story, see this blog post its website.
But now, with the release of iOS 9, we are now seeing a whole host of ad blockers that don’t have a whitelist (yet). Meaning that all forms of advertising are blocked: Display, video, (dynamically inserted) native, and search. When Apple supported the development of ad blockers, it was essentially leaving a loaded gun unattended, with three of the potential targets being Google’s main revenue streams (GDN, YouTube, GSN).
Although deals are probably being negotiated as we speak, there’s always the chance that a popular ad-blocking app, either on mobile or desktop, doesn’t give in to the pressure of the large ad-tech firms that power most of the interwebs.
While one would think that all of this would lead to advertising that is more user-friendly, we find ourselves creeping toward the opposite direction. Verizon recently made headlines by purchasing AOL, and while many may have been surprised by the deal, those who understood where a large part of AOL’s revenue came from saw things quite clearly. With plans to create a mobile-first advertising platform, we’ll see the marriage of AOL’s ad-tech with Verizon’s access to one out of three American cell phone owners (and where they’ve been and what they do). Oh, the places you’ll go (and get served with a “relevant” advertisement)!
So what’s next? If we as marketers (and content producers) start thinking about why consumers are using ad blockers rather than how to get around them, we can prevent the slow and imminent death we have been so vehemently warned about. By focusing more on intent-based marketing and by serving advertising that is anticipated, relevant, and welcome (or useful), we not only end up with a happier customer, but we may even be able to avoid parties littered with disapproving head shakes accompanied with the head shaker’s personal critique of advertising. “Why does the ad from XYZ Company follow me everywhere? Don’t they know I don’t want the item??”
It’s obvious that something needs to be changed. Incentives are stronger than ever for consumers to use ad-blocking software, especially on mobile. After installing the app, pages load roughly four times faster, about half of the amount of data is used, and your battery lasts longer. Once consumers get a taste of what could be, it’s going to be even more difficult for them to go back to an ad-supported web. We need to take the focus away from “more data” and shift it towards “more welcomed.” And while we’ll see a rise in brands encouraging the usage of their app over the web (ad blocking on mobile currently only works in Safari) and in-app advertising (anyone else notice an increase in advertising on Instagram?), until the model for online advertising changes, the rally cry of “Adapt or Die” will only become louder. Ad blocking has become a vehicle of protest against what isn’t working. It’s our jobs as marketers to fix it.
Zach Eberhart is a PPC Strategist currently focused in the health vertical. With experience at startups, agencies, an analytics firm, and now a Fortune 100 client, he has seen all sides of digital marketing and is passionate about the practice. Zach is originally from the Philadelphia area, and after attending school at Northeastern University and moving to NYC has lived in all three major Northeast cities. While he loves PPC, he’d rather trade travel stories or talk about music and art events around the city.