Ebiquity UK’s Head of Digital, Tim Hussain, shows why advertisers need to pay just as much attention to ad blocking as publishers and media agencies.
Ad blocking is growing in usage as consumers install apps on smartphones and tablets and plug-ins to browsers. A quarter of web users have installed ad blocking software, a figure which is expected to continue growing. With such significant changes in consumer behavior, the infographic below from Joanna Chan and Daniel Martin in our Digital team is timely.
But why should advertisers worry about ad blocking? On one level, it doesn’t affect them. If ad blockers prevent ads from being served, advertisers don’t pay for those failed impressions, so they don’t lose out by paying for impressions that don’t make it through. But we believe there are wider industry consequences for advertisers which could be caused by ad blocking.
First, the technology doesn’t block all ads equally. Big, multinational digital companies are less affected. As the Financial Times and UK Business Insider have reported, companies like Google pay to have ads unblocked. And the way ads are served in the walled gardens of Facebook, Twitter, Amazon, and elsewhere means ad blockers are ineffective on these platforms. As a result, they increase their influence disproportionately over smaller publishers of premium content who can’t pay or build their way out of the issue.
This is because – and here’s the second reason advertisers should be concerned – the publishers that are impacted by ad blocking are medium-sized independents that make digital such a powerful, targeted environment for advertisers. Think Bounty, reaching pregnant women and new mums; netmums serving mothers; or gaming and extreme sports websites targeting millennial men. These kinds of sites provide quality, engaging, relevant editorial – and advertising – to clearly defined, tailored audiences.
Publishing is a value exchange. Consumers engage in compelling content. As a quid pro quo, they see advertising whose fees help publishers pay journalists and vloggers to create the editorial. Outside of state (BBC) or subscription (Netflix) broadcasters, this value exchange has existed for decades. Unfortunately, many consumers aren’t aware of it and awareness-raising is needed here, while ad blocking companies continue to benefit from the situation. It’s why John Whittingdale, UK Culture Secretary, described the payment to ad blocking companies for unblocking of a site’s ads as a “modern-day protection racket.”
If the ad blocking trend continues, the value exchange becomes lopsided. Publishers generating 30 percent less revenue from advertising because of ad blockers might sack half their journalists, making content less compelling, fresh, and relevant – and also less appealing and diverse for advertisers. Many publishers may close. And that’s lose-lose-lose.
Consumers block ads because they find them intrusive and unappealing, and the publishing industry should do more here. Advertisers also have a responsibility to work with creatives to develop thoughtful, engaging, relevant ads that consumers don’t choose to block. They must also work with media agencies to ensure the right ads are delivered in the right formats and with the right frequency, so that they’re neither overexposed nor shown in the wrong environment. And that’s why clients need to ensure their media agencies provide full transparency about where and how their ads are placed.
Download Response magazine 24 – our international marcomms and insight publication for Ebiquity, FirmDecisions and Stratigent clients .