A study by PageFair and Adobe released in August estimates ad blocking will cost the global industry around US$41.4 billion dollars in 2016, up from the US$21.8 billion lost this year.
And with ad blockers now readily available on mobile phones as well, it’s an issue that’s becoming increasingly important to publishers that monetise their online brands through advertising.
Much of this cost has until now been carried by advertisers and media agencies that have paid for ads that have not been seen, but the IAB has taken steps to stop this from happening.
One of the key changes introduced by the IAB lies in the introduction of its rule that publishers should sell advertising in terms of requests filled, rather than impressions served.
“According to the IAB, you should never pay for an impression that isn’t rendered fully on the page,” says Scott Ries, Sizmek’s director of technical services across Australia and New Zealand.
“Ad blockers prevent that from happening. So the cost to the advertiser or the media agency should be zero in these circumstances, but that depends whether the publisher is billing in accordance to the IAB standard of filled requests as opposed to just requests.”
Ries says that any IAB-certified publishers are obligated to follow these guidelines, meaning it would be in advertisers’ best interests to use publishers that are listed as certified by the IAB.
“If they’re not on that list, then they may be billing you in terms of requests instead of filled requests,” he says.
Ries says another way that advertisers can determine the validity of an audience is by auditing the publishers they work with to determine if they’re actually delivering the numbers they promise—and he says this isn’t only recommended but necessary for brands targeting certain demographic groups.
“In the US, on the first three days that mobile ad blockers were launched… there was a big push very early on, and something like 60 percent of all 18- to 25-year-old males had installed an ad blocker on their mobile device,” he says.
“So if you’re Samsung or if you’re selling iPhones or other tech, and your publishers are telling you that 80 percent of their audience is 18- to-25-year-old males, then I suggest they make sure that this audience is actually being delivered. Overall, the industry isn’t dying, but there are very specific segments that advertisers need to do an audit on.”
As a corollary of the steps taken by media agencies and advertisers to introduce measures to protect themselves, the weight of ad blockers has fallen onto publishers.
“The loss of money is just on them,” says Ries.
“If everyone is following IAB guidelines, then the advertisers and the media agencies don’t end up losing anything. It’s really just the publishers.”
In response to the threat of ad blocking, Google and a range of other major online publishers have been applying pressure on ad-blocking companies to allow their ads to be served.
This eventually led to Adblock Plus, one of the biggest ad block companies in the world, launching the ‘Acceptable Ads’ programme, which allows ads that meet certain criteria to bypass the ad-blocking software.
This programme provides the following guidelines in terms of which ads should, in theory at least, be served onto a website:
- Acceptable Ads are not annoying.
- Acceptable Ads do not disrupt or distort the page content we’re trying to read.
- Acceptable Ads are transparent with us about being an ad.
- Acceptable Ads are effective without shouting at us.
- Acceptable Ads are appropriate to the site that we are on.
Seems pretty reasonable, right? Well, not really.
When the Adblock Plus browsing experience is contrasted to one without the software, it quickly becomes evident application of the rules is stricter than they appear in writing.
On the NZ Herald homepage, the Qantas masthead ad, Bayleys Property Picks, and Countdown and NZ Tax Management banners all disappear.
Interestingly, the software doesn’t pick up the ‘Brand Insight’ content marketing initiative—again illustrating the value of content-led campaigns.
Adblock Plus was also at work on the Stuff website, where the Qantas masthead was again removed, along with banner ads from Bayleys and Westpac, as well as the ‘special offers’ native advertising hub.
Even Facebook, whose ads are often held up as an example of what’s not annoying, doesn’t meet the standards set by Adblock Plus, with all its ads—even those served in-feed—being removed.
One of the few exceptions we found to this rule was in the case of Google’s search ads, which were visible regardless of whether Adblock Plus was used or not. Google-owned YouTube was not as lucky, however, with all pre-rolls being cut out when an ad blocker was activated.
For the most part, the ‘Acceptable Ads’ programme is little more than a new iteration of Adblock Plus’ whitelist initiative that publishers can join for a fee, of course.
What this seems to indicate is that publishers can’t rely on the companies producing ad-blocking software to act in their best interests.
As IAB chief executive Adrian Pickstock says: “Ad blocking companies are typically commercial driven entities, which are exploiting the current value exchange for content. Offering advertising white-listing opportunities to publishers at a price renders any supposed philanthropic motives as meaningless and poses an ethical dilemma. Services sold aren’t necessarily what users will get.”
That said, one advantage that news publishers, in particular, have is that a large chunk of browsing is shifting to mobile phones. And while mobile ad blockers are now available, Ries explains they aren’t effective when it comes to in-app browsing.
“Most ad blockers only work on mobile web. Mobile web accounts only for 20 percent of mobile traffic that we see globally. So near 80 percent of all ads that are seen in-app. There are some ways to block ads in-app, but it’s much more difficult than just installing an add-on to your browser. Generally speaking, in-app is a much safer way to go if you want to avoid ad blockers.”
But this isn’t a long-term solution. The companies behind ad-blocking software are consistently tweaking their products to make them more effective at blocking ads across devices, and it’s only a matter of time before in-app ad blocking becomes a standard part of the service.
Publishers are starting to take steps against ad blockers, but most efforts have so far rendered limited results.
Earlier this year, when several German publishers filed a lawsuit against Eyeo, the parent company of Adblock Plus, the court rejected the claim.
Many publishers have now resorted to what amounts to begging their consumers to help them out.
The Guardian andThe Atlantic, for instance, implore those using ad blockers to disable the software as a show of support for independent journalism—and other companies are also following suit.
No Kiwi publishers have resorted to these measures yet, but MediaWorks has taken an active step against ad blockers by disallowing those with the software from watching video content on any of its websites.
In contrast, TVNZ has so far taken a more passive approach, but the broadcaster’s general manager of product Jason Foden says it’s currently looking at how to tackle the issue.
“Based on a sense of fairness and the fact that our content is free our house rules state viewers agree not to use ad blockers while accessing TVNZ OnDemand,” says Foden. “We understand not everyone honours this and are looking at options to address what is an increasing use of ad blocking technology in New Zealand. For obvious reasons we can’t disclose what that is.”
Pickstock says the IAB is also keeping a close eye on the situation.
“Incidence of ad blocking in New Zealand is relatively small; however, the IAB will continue to closely monitor developments in this area,” he says.
“While the risk is small, the IAB is aware of the possible threat to advertising revenue should ad blocking gain momentum and the IAB is working on developing a public education campaign to raise users’ awareness of the value exchange necessary to ensure continued access to free content online.”
As things stand, local publishers are yet to develop a watertight solution capable of winning back the revenue while simultaneously keeping consumers happy.
But, Ries believes there is a way for publishers to pull control away from the ad blockers.
“Ad blocking is something that publishers can fix themselves,” he says.
“Publishers should auto-detect anyone that’s coming to the site with an ad blocker turned on—which is technically very easy. Then, they should redirect this user to a separate page, which explains how many millions of dollars they spend every year to make professional, quality content. It should explain that they’re focused on not serving super annoying ads with auto-start audio and a lot of the other things that drive people crazy. Other than that, it would then explain the steps it would take to turn ad blocker off for their website. Then, under that, it should have a section that says ‘if you still don’t want ads, then you can pay for a subscription.’ And even further down, if they don’t want to turn off the ad blocker and they don’t want to pay a subscription, then thank them for visiting.”
He says that these steps would leave local consumers with no choice but to deactivate their ad blockers.
“If every major publisher did that at the same time, it would fix the ad blocker problem,” he says.
The major publishers in New Zealand have already shown their willingness to work together by developing the KPEX alliance in an effort to pull some market control back from the major international players. And Fairfax’s Simon Tong, TVNZ’s Jeremy O’Brien, NZME’s Laura Maxwell and MediaWorks’ Mark Weldon have all spoken about the importance of continuing to work together to ensure that their business models adapt and become profitable in the digital age.
And if Ries’ suggestion is anything to go by, then it seems a united front might be the best way for publishers to go about beating the ad blocker threat.
But not everyone is confident this approach will work.
Mi9 national sales director James Butcher says: "I’m not convinced forcing consumer change is necessarily the right approach. More transparency in the value exchange between free content and ads/data will enable consumers to make more informed decisions in this space."
ZenithOptimedia group business director Alex Lawson is also sceptical, particularly in regard to the likelihood of the publishers working together when it comes to this issue.
"As someone who buys space on many websites that may have ad-block technology applied to it I’d welcome any methods of reducing their effectiveness," Lawson says.
"If the publishers can get the ad-blocking user to accept that then it’s one way round but far from perfect. If it’s a new site for example that says no, then you still have three other major New Zealand news sites that may let you access the content with the ad-block technology in effect. It reminds me a little of the paywall debate – if one goes to paywall, will everyone then just go elsewhere?"
Lawson also suggests a better option might lie in developing means to beat the ad-blocking technology.
"I heard another interesting solution recently which was that video content would be stitched together with actual content so that it appeared as one continuous piece - thereby eliminating the ad-block technology’s ability to identify that the video content even contained an ad and would then not block it. Beating the ad-blocker seems a better solution for us as an industry rather than trying to force the user to make a decision they don’t want to do or make them feel worse about our advertising in the first place."
And while this might work for a while, it'll likely only be effective for a limited period. Since ad blockers are already smart enough to block Facebook's in-feed placements and YouTube's pre-rolls, it wouldn't be too far-fetched to see the app producers from finding ways to cut out ads woven into the content (at worst, this could even see the content itself blocked).
Lawson also goes on to make the point that the quality of our ads—both mobile and online—remains integral to the fight.
"The biggest weapon that we have as an industry for me remains to think of ways that make our content more appealing, engaging and entertaining for the end user," he says. "If we can do this, combined with more effective targeting so that those messages are being served with relevance to that user then we take away some of the desire for people to even bother with ad-blockers in the first place."
However, major publishers aren't necessarily the ones to blame for ad blockers.
As Ries explains: "There are tonnes of bad sites out there: porn sites and all the other inappropriate sites that we’re not supposed to be visiting. You got ads that drive people crazy on these sites, and I get why you would want to block those ads. But when you’re talking about big sites, all of them have been blocking these types of ads for over ten years. But now, they’re paying the price for all these bad ads."
As long as these sites continue to spew out annoying ads, consumers, particularly young males, will continue downloading ad blockers. And because major publishers and the ad agencies that work with them have no control over the atrocious ads that are served onto most sites online, the creation of bad ads and the responsive blocking of them will continue largely unabated.
And until publishers find away around ad blockers, they will continue paying a price that burgeons every month.