World Association of Newspapers and News Publishers


Ad Blocking: 7 Questions with Dr. Johnny Ryan

Ad Blocking: 7 Questions with Dr. Johnny Ryan

Article ID:

19217

In this interview, Dr. Johnny Ryan, Head of Ecosystem at PageFair, discusses the growth of ad blocking, what it is costing publishers and what steps they can take to do something about it.

You can find Dr Ryan's slides from his recent presentation at the World Publishing Expo here.

WAN-IFRA: As adblocking is gaining momentum as an industry buzzword, how is PageFair defending the argument that ads are vital to publisher's sustainability? 

Johnny Ryan: We know that ads are vital to publishers’ sustainability. However, on the consumer side blocking ads has become very easy. PageFair, in the 2015 PageFair-Adobe report, announced in August that almost 200 million ad blockers, and that the cost to publishers will be $21.8 bn this year. Ad blocking will continue to spread, devastating online publishers’ revenues. My feeling is that the rules of advertising have now changed. 

This crisis arose because ads ran amok on publishers' web sites, damaging the users' reading experience, snooping on their data, and draining their battery and bandwidth. Unsurprisingly, hundreds of millions of users have voted with their browsers and blocked all ads. But I think there is an opportunity in the ad blocking crisis.

We as an industry have a chance to break the cycle of bad ads causing users to block all ads. We know from our survey data that people accept certain formats of ads that are moderate and respectful. With that proviso users are happy to help publishers generate revenue. PageFair has spent three years building the technology to serve these ads to ad blockers. People who block ads have a higher click through rate than general users - primarily because they see so few. 

How do you foresee the trends of Adblocking geographically, especially in the West, where adblock users are growing at an alarming rate? 

Ad blocking emerged in Europe, and unsurprisingly Europeans are blocking more than their counterparts in the United States. As of Q2 2015 there were 77 million people in Europe using ad blocking.

One in 10 people in France, and one in five in the UK, are now blocking ads. Even so, they lag behind Germany, where a quarter of the online population are blocking. The European leaders are Poland and Greece, where more than a third of the population is blocking ads.

Although rates are higher in Europe, the US is catching up. Ad blocking in the US grew by a little under 50% in the last year. We observed a surprising trend in the United States: “blue” states block. States that vote Democrat tend to slightly higher ad blocking penetration than states that vote Republican. Whereas the 15% of Internet users in the US are blocking ads, 20% are doing so in Canada.

How do you foresee Adblocking trends within the next year with the rise of PageFair against the new Apple Safari browser on iOS9? How can publishers take back the potential missing revenue in adblocking?

Ad blocking is crowing virally, and is about to migrate to mobile. Looking at data across PageFair’s network of 3,000 client sites we see that Mobile Firefox, an early example of this trend, had a 16% blocking rate in Q2 2015. Mobile ads will suffer when the popular mobile browser, Apple’s Safari, starts to permit ad blocking from September this year with the new release of iOS. 

As a sign of the future, look to Asia. The mobile browsers Maxthon and UC Browser (owned by Alibaba) claim several hundred million users in China and India. UCBrowser version 9.9.2 in August 2014 integrated ad blocking. It has 264 million installations. Maxthon browser integrated Ad Block Plus in February 2015. It claims 120 million installations. My fear here is that as ad blocking spreads the publishers will retreat behind the walled gardens of Facebook and iOS, allowing large tech companies to become the gatekeepers of editorial content. This would be disaster for publishers. 

On Adblock Plus, they currently offer a feature of "acceptable" ads to be shown in user's browsers. How does one deem an ad "acceptable"? 

Right now the standard for “acceptable” ads is a rather nebulous one that was arbitrarily decided by Eyeo GmbH, the commercial company that operates Ad Block Plus. The rules are sensible in general, but I am not convinced that they are legitimate.

Should a private commercial entity be able to dictate to the world's publishers and editors the standards that they should meet on the web? That this has occurred is a clear sign of how bad advertising has become. Publishers have allowed advertising to interfere with visitors' experiences of their websites, and this has put Eyeo in the position of setting the rules about what can and can not be displayed.

In that same vein, how do you think that publishers perceived Google's payment, rumoured to have been upwards of $25M, for getting their ads Whitelisted with Adblock Plus? Rather than challenging a small, relatively unknown start-up and instead fuelling them with more revenue.

To put a scale on the problem for Google, we have estimated that ad blocking costs Google somewhere in the region of US$ 6 billion. See our estimate here.

I think it improbable that the sum Google paid, perhaps in the region of $25M according to the Financial Times, is simply being spent on the administration of the acceptable ads program.

It it more likely that it being reinvested in to new ad blocking technologies such as Active Directory support, which enables the deployment of adblocking across entire corporate networks, and Adblock Plus' new mobile browser, intended to bring ad blocking to mobile.

It is also important to understand that the “acceptable ads programme” is only a partial remedy for Google. Many Adblock Plus users have opted out of Acceptable Ads. Those who have opted in will still not see any of Google's display ads, video ads, or any of its Adsense and Doubleclick ads on network members’ websites, because these remain blocked. And perhaps most importantly, AdBlock Plus is only one of many adblocker softwares. Paying them off does not solve the problem of other adblockers. Adblock (rather than AdBlock Plus), for example, has more users on Google's own Chrome browser.

In PageFair's mission statement, you express "loyalty" and "engagement" as priorities for publishers on advertising as opposed to "traffic" and "clicks", how can publishers seek quality over quantity? 

Publishers’ most precious asset, the unique thing that they alone hold, is the trust and goodwill of their audience. It seems to be that publishers should focus on a simple metric: “Life Time Value” (LTV). Not engagement hours, or numbers of clicks, or likes. Life Time Value.

Pursuing the short term gain of ever more intrusive advertising has been a disaster. Focussing on LTV allows publishers to justify investing in sustainable, long-term relationships with readers, beyond weekly earnings and quarterly sales figures.

The rise of ad blocking is a sign that the audience is rebelling against annoying ads, and a system that permits a panoply of advertising technology companies to snoop on their behaviour on publishers' sites, and trade their data to sell them things elsewhere.

The long term solution for publishers has two components.

First, they should become the sole custodians of their users' data, and rebuild long term trust between editor and audience.

Second, they should show ads that are respectful and unobtrusive. These ads will not jump around the screen, or snoop of a visitor's data, or slow down the website. They will be small, and simple. PageFair has tested this.

People who block ads actually click more than normal people when we show them simple, respectful advertising. Fewer, simpler ads work better.

How do you foresee publishers and advertisers collaborating on delivering non-invasive, non-intrusive ads for users?

We have one chance to redefine how advertising works, and save the mechanism of advertising that supports editorial content on the open web. Publishers, not platforms, must take the lead.

We need guiding principles that will shape the experience that users enjoy on publishers’ sites in the future. Should ads jump around the screen? Should ads be permitted to obscure content? Should ads be able to capture data that the publisher is not aware of?

PageFair, WAN-IFRA, leading publishers, and other stakeholders are discussing a set of principles that shift the balance of power back to publishers, vesting data in them rather than third parties, and returning advertising to unobtrusive formats that users can accept.

That conversation started with a meeting convened by PageFair at The Financial Times in September.

This first step will, I hope, be followed by others. And WAN-IFRA's involvement is essential. If you are a publisher or consumer body and are interested in the future of sustainable, unobtrusive advertising that respects users and sustains publishers, please make contact with me. Join the discussion.

Click here to see our video with Ryan's advice to publishers from World Publishing Expo 2015.

Author

Ben Shaw's picture

Ben Shaw

Date

2015-09-25 09:52

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