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Ad Blocking Isn’t All Bad News. But It Will Be Disruptive.

By David Randolph in Industry News on March 10th, 2016

Earlier this week, the Interactive Advertising Bureau (IAB) released a guide to help web publishers deal with visitors who use ad blocking technology. The issue? Over 50% of millennials are regularly using web ad blocking. Other demos aren’t far behind.  Randall Rothenberg, President of the IAB, wrote a piece last September for AdAge in which he compared ad blocking to robbery. He also likened ad blocking technology to an extortionist scheme.

The future web might look like this to ad blocking consumers

Consumers and content creators have an implied contract. There is little to no out-of-pocket cost for infotainment and social networking sites as long as consumers accept advertising. Ad dollars currently fund the vast majority of web content and popular apps, including Google and Facebook who take in roughly 90% from ad sales.

A Digital Advertising Bubble?

This ecosystem has been thrown out of balance by the behaviors and motivations of four key players…

  1. CONTENT OVERLOAD: Publishers push for more eyeballs, double-down on content, and costs skyrocket.  Publishers increase their ad to content ratios to compensate.
  2. INTRUSIVE ADS: Advertisers must be more vigilant as ad space proliferates and decreases in value.  Advertisers and agencies ramp up the intrusiveness of ads to compensate.
  3. BANDWIDTH HOGGING: Ad tech slows the web to a crawl in order to power ad management platforms.  Ad tech compensates for data gaps with specious algorithms and complex sales pitches.
  4. NOT WILLING TO PAY: Consumers have discovered the ad blocking loophole.  They can now obtain the reward (free news and entertainment) and skip the responsibility (viewing ads).  Consumers also demand privacy, while complaining that ads would be more welcome if they were relevant.

How Did We Get Here?

The digital advertising ecosystem wasn’t planned from the ground up.  It was crowd-sourced over the years, and the result is a congested and noisy place.  Some ads require dozens of handshakes with remote servers around the world before they display on a page.  This slows page loading and video caching to a fraction of the potential speed.  

Moreover, everyone in digital marketing wants that consumer data in order to power algorithms as part of a broader advertising product.  Half of all bandwidth used during mobile web browsing is ad data exchange traffic.  

And then, there’s consumer uneasiness about how data is collected and shared.  The backlash toward intrusive display and video advertising is similar to how consumers felt about telemarketers and email SPAM over the last decade.  It's interesting to look at Google search trends over the last decade related to consumer backlash toward banner ads, telemarketing and email SPAM.

10 years of consumer interest in ad blocking, spam and telemarketing via Google searches

Should Display Advertising Evolve?

Even those in the business quietly admit it.  Ads can be far too intrusive. Scott Galloway, marketing professor at NYU and founder of L2 Consulting says, “Spare me your s**tty advertising!” in his popular YouTube videos.  Galloway gladly pays for Netflix and HBO Go to see his favorite shows while avoiding advertising.  

The IAB warns of consumer dislike for auto-playing videos, blinking banners and screen takeovers.  News properties like CNN and The Weather Channel frequently subject visitors to 30 seconds of pre-roll before 60 seconds of content.  The value exchange just seems a bit off.  Indeed, Rothenberg’s article page at AdAge.com commits the screen takeover offense he warns publishers about...

Ad block off vs ad block on

What Should Advertisers Expect?

Display and video ads will not dry up, taking consumer spending with them.  The Internet is the greatest selling enabler humans have ever developed.  Neither will ad-supported publishing go away.  Publishers will begin blocking the ad blockers en masse and a stronger, higher quality advertising marketplace will emerge.

Here are the four truisms for brands and advertisers to focus on right now:

  1. Many forms of digital marketing can’t be ad blocked -- SEM, native, in-app and influencer.
  2. Publishers will likely arise from this crisis with more effective ad options. (IAB.com)
  3. Consumers struggle to get ad blocking to work in iOS and Android, especially in apps
  4. 98% of the ad blocking problem is on desktop, so advertisers have more options in mobile.

While ad blocking usage continues to grow and annoy, it gives advertisers incentive to better their content, focus on their audiences and tailor their ads from ad blocking learnings. Native ads are on the rise for desktop and mobile platforms which opens the door to creative content that reaches millennials without appearing spammy. If advertisers continue to think like their consumers, their efforts will outsmart and outperform any ad blocking attempts. Taking these ad blocking threats as inspiration will push advertisers to get creative and supply advertisements people don’t want to block.

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