Playing Hot Potatoes With Ad Blocking
Everyone’s to blame for the state of digital advertising, but ad blocking is a problem that’s landed right in publishers’ laps.
Ad blocking has been in existence for a while. But it has suddenly emerged as digital advertising’s latest problem, which quickly escalated when Apple announced it was embedding ad blocking functionality in its latest iOS update. Folio: spoke with several publishers to get their take on what ad blocking means for them and what, if anything, they’re going to do about it.
According to an August report, “The Cost of Ad Blocking,” by PageFair and Adobe, publishers have been dinged an estimated $22 billion so far this year. That’s a big number. And ad blocking has grown 41 percent globally in the past 12 months.
Domestically, ad blocking has become a major thorn in the sides of publishers as the technology has grown by 48 percent to reach 45 million active users from Q2 2014 to Q2 2015.
AUDIENCE IS A HIGH-VALUE DEMO
Publishers are already grappling with shrinking digital CPMs, a glut of inventory, visibility problems and non-human traffic. Now they must deal with a rising percentage of the population that they’re unable to reach with ads. Ironically, it’s an audience advertisers actually want to reach.
“For many advertisers this [young and tech savvy] subset is a highly desirable audience from a demographics standpoint,” Mark Howard, chief revenue officer at Forbes Media, tells Folio:.
When asked whether or not agencies have been asking him about this, Howard admits: “Yes, they are mainly concerned about how it affects their campaigns. It appears that they are worried about being wrongly charged for impressions that are being blocked. However, the reality is that the ad blocker blocks the call so advertisers are not affected by this at all. It’s a publisher problem only at this point.”
Of the three individuals interviewed for this article, each admitted they are not currently implementing a response. Joy Robins, SVP of global revenue and strategy at Quartz, says, “It is something we are actively discussing, but recognize that it will require a sensitive approach.”
Many in the industry would agree that there isn’t any one stakeholder to blame for ad blocking’s rise in popularity. Publishers and advertisers alike have set the stage.
Seth Rogin, chief revenue officer at Mashable, echoes these sentiments. “We’ve all had the experience in which we’re overwhelmed by imagery on a page,” he says. “It is on us, as the industry remaking itself on a daily basis, to create premium experiences that readers don’t want to block.”
“The stakes are high now,” Rogin adds. Maybe they were all along, but now there’s no denying it. PageFair predicts ad block usage in the U.S. will block $20.3 billion in revenue in 2016. “The media brands that will succeed will be the ones that understand the necessity of diversified revenue streams and the power of creative collaboration,” Rogin says.
Forbes Media plans to try and face this surge of ad blocking extensions. “We’re continuing to evaluate a number of options and will soon be deploying tests to see how the various options lead to either recouping revenue from site sessions with users with ad blockers or create new means of monetizing those user sessions,” says Howard.
“The only impact it has on advertisers is that there is a growing percentage of the web audience that marketers aren’t able to reach,” he adds.
And the fact remains that more and more eyeballs are coming from mobile. When the new iOS released, the most popular paid app in the App Store was an ad blocker. The sloppiest ads are often found on mobile and if publishers are going to have a chance at combating ad blocking, removing heavy ads and unwarranted third-party tags from their mobile experience wouldn’t be an unreasonable place to start.