Author: Anjali Ramachandran, Head of Innovation
The story so far
It’s time to talk about ad blocking.
Over the last few months, not a day goes by that doesn’t have another news story about the philosophical imperative of advertisers doing the right thing by the user on the one hand and the financial impact of ad blocking for media businesses on the other. The thing is: the two do not need to be at odds with one another. It doesn’t need to be a mutually exclusive arrangement.
Let’s step back and examine the situation as it stands. In the 12 months to June 2015, PageFair reports that usage of ad blockers has spiralled by the not-inconsiderable figure of 82% in the UK, to 12 million Monthly Active Users (MAUs). In the US, figures are obviously larger: a growth of 35% to 77 million MAUs. AdBlock Plus on Chrome is the most widely used plug-in, at nearly 60 million users worldwide. Peak usage is by 18-29 year olds, according to PageFair, and in general males tend to use it more than females.
As someone who works in the media industry, I know how much money is spent by publishers, agencies and brands on digital advertising every single day. As a fairly active member of the digital community, I also know how irritating said ads can be when they are irrelevant, and consist of large-sized images or videos, causing pages to load sluggishly and occasionally to crash altogether.
From a publisher’s perspective, the user is wrong to deploy ad blockers in the first place because ads are what keep the web free. Some publishers, like ITV and Channel 4 in the UK, simply refuse to display content when they detect an ad blocker on a page. Others have started using work-arounds being offered by technology companies: for a premium, they are allowed to bypass the ad blocker and serve their ads (talk about one industry begetting another, similar to the cleaning and management services that cropped up in the wake of Airbnb’s popularity – in this case however, it’s a pretty vicious circle). It’s also not a permanent solution, it’s simply treating the symptoms instead of the real problem.
From the user’s perspective, the publisher is wrong for two reasons: one, they track people’s movements on the web in a rather opaque manner; there’s no real knowledge of what the data being collected on users exactly is and how it is being used – so there’s a privacy issue. The second reason is that ads increasingly spoil a user’s experience of the internet altogether. Indeed, some publishers don’t have any concept of self-control, resulting in a situation where people are over-targeted and shown the same ad, or a similar ad, too many times. In effect, these publishers are signing their own death warrant.
The situation isn’t without its repercussions within the hardware manufacturing cohort. A lot of intelligent people have already weighed in on Apple’s plans to create provisions for ad blocking in iOS9 when it launches in September, which could change the playing field. As developer Paul Hudson noted, this is because these provisions could be used to build an ad blocker without too much work, especially if you consider that “the modern definition of “one man year” is “365 Reddit users working overnight”. And as of 2 days ago, Mozilla’s built an ad blocker into the Developer and Aurora builds of Firefox.
Alternative business models: the technology startup landscape
In the gap in between are the plethora of startups like Powr of You who are creating new business models predicated on a much clearer value exchange: you give us permission to access your online data voluntarily, we show you in a neat manner what exactly that data is, and we pay you when companies decide they want to buy that data to reach you with better messaging (‘better messaging’ is of course the very reason re-targeting exists – it’s just that it’s always been a very one-way relationship that I wouldn’t blame the user for rebelling against). I had the chance to speak to Powr of You about this recently and they echoed the same sentiments. They said, ‘Data is the currency of the future. We as consumers are creating a ton of data, but are not getting anything back in return, while brands are also struggling to understand how people spend their time across devices, their likes and dislikes. There is a natural fit there in how the data can flow one to the other, and Powr of You strikes that balance by changing how the data economy works’. Crucially they spoke about how this process can create better brand trust, which is the core factor at risk when it comes to brand success.
Other business models in this space include intent-casting, where the user indicates a need for a service before being spoken to by brands (Uber is the most popular example of this). A whole plethora of companies are involved in this space, as Project VRM documents here.
So where does that leave ad-blocking?
Potential industry solutions
Let’s consider this from the perspective of the user, without whom, let’s face it, content can’t be monetised in the first place. Let’s call this user Ann. Ann is a rational person who wouldn’t use ad blockers if ads weren’t so tiresome. In order to give Ann what she wants, agencies and brands alike should commit not to re-target incessantly, and include frequency capping as a mandatory part of their media buying process. Doc Searls at Harvard University recently suggested another interesting solution, by way of sign-posting ads that are about brand marketing instead of acquisition, because the former are the ones that are less about data collection. He says that perhaps people in the know will see an ad that’s marked as a ‘brand’ ad, understand its contribution to keeping the web free (while not serving as a hub of data collection), and not block it. That would be a whole project for an industry body like the IAB, but it’s a thought.
Another solution is the one being floated by coalitions of different kinds such as the Do Not Track compromise led by the Electronic Frontier Foundation in the US and the Digital Catapult’s Trust Framework initiative in the UK. These initiatives guarantee the user’s position of privilege and asks media owner participants to respect their choice not to be tracked, so that users become comfortable enough with these sites to not use ad blockers in return.
Here’s another one: what if a consortium of publishers charge a ‘digital license fee’ to users who are willing to pay, similar to the TV license fee in the UK that largely funds the BBC? Think of it as a paywall, but an industry-led one. Of course this fee would need to be split by the free sites that a user visits. Payment would need to be voluntary, because a free internet is for the good of all and not everyone can afford to pay. The accruing revenue is likely to make at least a few sites profitable over time, especially the smaller ones with fewer overheads – and definitely better than no revenue at all.
More realistically however, what is likely to happen is the continued rise of native programmatic advertising. The foundations are already in place: in May 2015 the IAB released a native programmatic standard, called OpenRTB 2.3. Many agencies and technology companies are also forging partnerships to execute on native programmatic as well: WPP’s Xaxis and Disqus for example, and in mobile, InMobi and the Rubicon Project.
If we’re lucky, as an industry we’re also likely to see better quality advertising in general: think visually-rich large-format images and informative research wrapped up as advertising, both of which sites like Quartz already use.
It’s important for all of us, agencies and clients, to be aware of these issues – in terms of ad trackers, some media owner sites deploy dozens, some hundreds, and this is getting people into trouble. Have these conversations where relevant so the right information is out in the open.
As I indicated when I started this piece, people block ads when the disadvantages outweigh the advantages. Brands, agencies and publishers need to be more mindful than ever about the need to do right by their audience. If they do, ads are less likely to be blocked, content can remain free, and everyone wins.