World Association of Newspapers and News Publishers


What Is Ad Blocking and What Does it Mean for Publishers?

What Is Ad Blocking and What Does it Mean for Publishers?

Article ID:

19211

The issue of ad blocking is complex. Beyond annoyed users and publishers losing revenue, there are many stakeholders: the ad block tech providers, advertisers, online retailers, platforms (notably Facebook, Apple and Google) and anti- ad block tech providers. This is a one-stop overview of the Key Issues – threats as well as opportunities.

What is an ad blocker?

Ad blockers are plug-ins to browsers, which block ads before these are loaded by the browser. Ad blockers use lists of rules (ad filters), to determine what should be blocked.

On desktop AdBlock Plus, developed by German company Eyeo, is the most widely used ad block tech, and it’s available for most browsers. Ad blockers have existed on desktop for many years, but user adoption has taken really off this year. Most of the top ad blockers are free to download.

On mobile, Apple, in a much-publicised move, enabled content blocking in the Safari browser on iOS9, which means developers can now produce ad blocking apps, downloadable from AppStore. On Android smartphones you can either use the Firefox browser with AdBlock Plus, or use a browser like Ghostery Privacy Browser. The default browser Chrome does not accept ad block plug-ins.
It should be noted that ad blockers would not exist were it not for user demand, ad blocking is very much a user driven business. Attempts to deal with ad blocking by suing the software companies behind them ignores the real issue – the intrusive and slow-to-load user experience caused by bad display advertising – and have indeed been fruitless.

Vox provides a good explanation of the “ad blocking controversy”.

Consumers

According to a recent report by Adobe and PageFair, there are now over 200 million people globally with ad blockers installed on their desktop and mobile browsers.

Why has it come to this? There are several reasons:

  • Display advertising has become ever more intrusive to the online user experience. On the small form factor of mobile phones this is an even bigger problem than on desktop – many ad formats completely or partially cover the content the user is trying to engage with.
  • As described in WAN-IFRA’s recent Data Privacy Report, consumers are increasingly concerned with their private data being traded freely on the internet, including through cookies and other trackers enabled by ad tech.
  • Page loading times are badly affected by big ad files and server calls from a panoply of players in the digital advertising ecosystem (illustrated in the LUMAscape), none of whom have direct relationships with consumers.

In short: Consumers are installing ad blockers to gain control over their online experience, which has been negatively affected by an advertising ecosystem beyond publishers’ control.

Publishers

Ad blocking constitutes a threat to publishers, who stand to lose ad revenue for every user who blocks ads (as opposed to advertisers, who only spend their money once an ad has been served). But the current situation may also force through some changes that will benefit both publishers and users in the long term (see below).

How much ad revenue is at stake? According to the PageFair and Adobe report, the estimated loss of global revenue due to blocked advertising during 2015 will reach $21.8 billion. Some argue that this calculation does not take into account the issue of supply and demand of ad inventory. However you count, it’s clear that publishers can no longer afford to ignore the issue.

What if publishers do nothing? If publishers allow ads on their sites to continue to obscure content, slow down websites, pry into data, and break the audience's trust, then a large technology platform company like Facebook or Apple will have the opportunity to step in and set the rules.

What’s the good news?
The good news for publishers is that they have a direct relationship with consumers, and the opportunity to build on this. There are a number of opportunities:

  • Improve the overall ad experience for users without ad blockers, to ensure they do not install them.
  • Communicate with users who do block ads, around the premium content business, which requires revenues to survive. Give them a reason to buy into disabling ad blockers for your site.
  • Alternatively, offer them a digital subscription. There’s a big opportunity here to explain (to all users) that in order to keep consuming premium content, they have to bring value to the table: either as consumers of advertising or as paying subscribers.
  • Ad blocking does not happen in apps, so on mobile there should be a focus on migrating users to apps, as well as creating better ad experiences, such as native ads, on mobile web.

There’s also an opportunity for publishers to get in the driver’s seat in relation to advertising. Much of the current issues with slow loading times and intrusive ad formats are due to the complex ad ecosystem and all the third parties.

Publishers need to start dealing directly with advertisers. Cutting out third parties would also mean maintaining control of all first party user data, which can be used to create added value to ad products and campaigns.

Some publishers are already dealing directly with brands around branded content campaigns. Branded content provides a better experience for users and improved engagement for brands and will no doubt increase in popularity as ad blocking increases and display declines.

What are publishers doing today? Individual publishers around the world are working to manage the impact of ad blocking, often on many fronts in parallel. Actions include the ones mentioned as opportunities above. Good examples include the Washington Post, which is blocking some content to users with ad blockers installed, asking them to disable them.

There are also some national level industry collaborations going on, including in Norway (link in Norwegian), where several major publishers have formed an alliance to discuss the possibility of taking joint action by blocking their sites to users with ad blockers, asking them to either disable the ad blocker or white list the publishers’ sites. Similar discussions are going on in Sweden.

WAN-IFRA and digital publishing association DCN are heading up an international effort with three priorities:

  • to improve the overall ad experience for users without ad blockers, to help ensure they will not install them.
  • to find ways to encourage users with ad blockers to agree to be served ads again. This might involve setting and adhering to standards for online advertising.
  • to focus on other mobile-ready advertising opportunities that provide alternatives to display, such as branded content, in-stream ad formats, video and audio, and e-commerce.

Platforms
By opening up iOS9 to ad block apps, Apple’s strategy is to move users away from the open web and into Apple controlled environments including the new pre-installed Apple News app, where the company is not only in control of the user experience (and data, though this is not traded with third parties), but also of the advertising experience and (at least some of) the revenue.

Similarly, Facebook, who are already in an extremely strong position with its app on mobile, are looking to make this experience even stickier through its Instant Articles feature.

Google faces a challenge. With its reliance the open web for its ad revenues (through search as well as its AdSense and Doubleclick ad serving businesses) ad blocking threatens the core of its business. Indeed Google has paid AdBlock Plus developer Eyeo to be included on a whitelist, which will prevent at least some of its adverts from being blocked.

Advertisers
Ad blockers do not have the same potential financial impact on advertisers as they do on publishers. Advertisers only pay for digital ads which have actually been served to a user (impressions), and what ad blockers do is prevent ads from loading, i.e. stop them before they are served.

For advertisers and ad networks, the problem is that ad blockers prevent them from a) reaching their target audiences with their ads and b) tracking user behaviour / gathering user data.

Advertisers clearly need to be part of the solution, i.e. engage with industry efforts to improve ad formats. Indeed the IAB is at the table of the WAN-IFRA/DCN talks.

As mentioned in the Publishers section, there’s an opportunity for advertisers to work directly with publishers, thus eliminating third parties, and improving the user experience and in turn the value/engagement for the advertiser.

Ad Block blockers
There are a number of companies providing a range of services to publishers – from blocking ad blockers, to offering ad blocking users other options, including paying for content. We will be adding to this list.

PageFair allow publishers to measure the cost of adblocking and to display alternative non-intrusive advertising to adblockers. In August the company co-published the widely quoted 2015 Ad Blocking Report with Adobe. Dr Johnny Ryan of PageFair made a presentation at the recent World Publishing Expo, slides available here.

SecretMedia offer a technology to unblock preroll video ads. Founder Frédéric Montagnon comments here.

Sourcepoint, launched in June, offers technology to block ad blockers as well as allowing publishers to present a message to users with an ad blocker installed, e g asking them to become paying subscribers instead.

There's a Swedish company called New Broadcasting Entertainment Scandinavia, who have developed a tool called Adway+. In an interview on the Swedish news site Breakit, NBES operations manager Martin Grahn declines to comment on the tech behind Adway Plus, but confirms encryption plays a part. The platform not only lets advertising through the ad blockers, the service also monitors what type of advertising triggers use of ad blockers, including by looking at responses on social media. According to the same article, NBES’ business model is based on taking a cut of the expected increased ad revenues generated by the publisher. Indeed the company website confirms that the Adway+ platform is “a way to increase your revenues without an investment cost.”

Author

Cecilia Campbell's picture

Cecilia Campbell

Date

2015-09-29 16:52

Author information

Ad Blocking Resources and Insight Read more ...