This is the final part of our “Ad Blocker Strategies” series of articles. In this part, we will explore what consumers want and why they have adopted ad blockers with such enthusiasm? You can find the first and second parts of our series here and here.
The second part of our series concluded our discussion about publishers’ strategies and the broader industry response. The next topic is possibly the most important: understanding what consumers want and why they use ad blockers. This understanding is crucial to developing a successful answer to the ad blocker phenomenon.
What consumers want
So why are consumers using ad blockers? Interestingly, the answer is not that consumers don’t want to see ads. That doesn’t seem to be the problem. As Mathew Ingram put it:
But is this really what ad blocking is all about—a fight between publishers and software makers? As I’ve tried to describe previously, the real battle is between readers who want to read a company’s news or other content, and the publishers who clutter up and slow down their sites with dozens of annoying and intrusive ads.
Instead, consumers’ concerns fall into two categories:
- Poor user experiences.
- Little respect for consumers’ privacy.
Poor user experiences
AdWeek recently invited a group of executives from the publishing, advertising and ad-tech industries to discuss the root causes of the ad blocker phenomenon and what could be done to address it. The discussion was published in a fascinating article titled “We Brought Together the Major Players in the Ad Blocker War, and Here’s What They Told Each Other”.
One of the comments that many of the executives mentioned is that the user experience on a typical publisher’s site is not ideal. Echoing some of the iab’s statements, The Washington Post’s Jed Hartman said:
The advertising ecosystem has really gotten caught up in the capabilities—from an advertiser [and] publisher perspective—that technology has to offer. In some cases, it didn’t flip this around and look at what it does to the customer experience. When I say customer, I mean audience. A lot of the innovation has not been incredibly empathetic with speed, cleanness and [data] lightness of the products. That’s part of what has gotten us here.
He later commented on the additional technical overhead that modern ad tracking software adds to web pages and the effect it can have:
Sometimes, the advertising [portion] is a staggering number—hundreds of pieces of code for a page. Because of that, the effect on load time is significant. That is different than just having an ad serve a purpose on its page.
One of the more interesting insights came from Conde Nast’s Chief Revenue Officer, Lisa Valentino, who pointed out that having fewer ads could be beneficial, although ad blockers still seem to reduce the benefits:
It’s interesting because when we look at the performance, we’ve actually decreased the number of ads per page. We released a number of high-impact units this summer where the performance has been off the charts. These are probably the same ads that are getting blocked because they’re “larger” than average.
If ad blockers are still blocking the fewer “high-impact” ads on a page, that leaves publishers in a similar position although the insight that fewer ads can generate a higher return is a step forward. One of the solutions many on the panel put forward is to improve the quality of the content being presented to consumers. There are certainly clear examples of ads that are so compelling that consumers will not only want to see them but will share them.
I’ve written previously about ads that have become known as “unmissable ads” and which are so entertaining, they are sought after in their own right. When consumers are presented with creative ads and the industry takes meaningful steps to reduce the technical overhead that dramatically degrades consumers’ experiences, that may go some way to persuading consumers not to block ads quite so much.
Doc Searls has a descriptive summary of consumers’ privacy concerns in his Harvard Business Review article:
When you go to a website, you’re looking for what publishers call “content,” which could be almost anything. I say “almost,” because one thing you’re not looking for is to be marked and tracked like an animal when you leave the site. But that’s what you get when you visit most advertising-supported commercial websites, whether you want it or not. And tracking has become steadily more prevalent as marketing’s appetite for “big data” and “personalized” ad messages has grown from hunger to gluttony.
On the one hand, brands and publishers use personal data to predict consumers’ desires and present them with relevant offers in the form of ads. On the other hand, consumers don’t want to be inundated with irrelevant and excessive ads, especially when there is no real transparency regarding what data is collected when, and how. As Valentino pointed out (and Fisher in 2010):
Whether you’re a creator out of your garage, a creator that has influencers in the millions or a media company that is in the content-making business, there are economics that are significant in being able to create content. If we block every ad there is, there will be no content.
Consumers are aware of advertising’s role in the content ecosystem. As Searls put it in a subsequent article titled “The End of Advertising as We’ve Known It” in the MIT Technology Review:
Even if we don’t like ads fattening our magazines and interrupting our TV shows, we at least know the economic role they play and appreciate the best ones, which can be every bit as good as the content they sponsor. These ads send strong signals about brands, and yet they respect our privacy, don’t plant tracking beacons on us, and don’t lure us away from what we’re doing. The attractive ads that populate Vogue and other high-quality offline media are advertising’s wheat. The kind that drive millions of us to use ad blockers are advertising’s chaff.
The multi-billion dollar question is how to balance these two competing considerations?
In the near-term, I suspect we will see more publishers adopt one of the three strategies I outlined earlier or come up with creative variations and hybrids. With all the focus on the growing ad revenue crisis, it is also important not to lose sight of the seismic shift that is taking place. One of the arguments some of the commentators whose writings I reviewed for this article is that the display advertising model was designed for a mass distribution model based on newspapers and, perhaps, an older generation of the Web when more precise measurements of reach weren’t possible or technically feasible.
The Web we use today is far better suited for precise tracking (part of the problem, of course, because it is also easily abused) and so, the argument goes, publishers should be looking to more appropriate revenue models. Advertisers are not necessarily bound to publishers and as publishers find their measurable audiences shrinking, their relationships with advertisers will weaken. That is bad for the content industry if publishers can’t adapt.
Advertisers have already found that platforms like Facebook, Snapchat and Google’s broader ecosystem potentially offer them more effective advertising options so it may not be very long before we start seeing advertisers abandon once-dominant publishers.
So, what can publishers do to not only survive, but thrive? Early indications are that there are a number of options which are already being tested.
As I mentioned earlier, some publishers are experimenting with micropayment options where non-subscribers are given the opportunity to pay for access to premium content on an ad hoc basis. Micropayments could become the gateway to more lucrative subscriptions. I foresee two challenges facing a micropayment model: consumers’ willingness to pay for content and micropayment solutions that are seamless and don’t exacerbate the user experience.
Consumers are accustomed to a free access content model so they may need time to become comfortable paying for content they previously accessed for free. Developing seamless micropayment solutions is more of a technical challenge although a plethora of payment services may raise another challenge: trust. Unless micropayment solutions are trustworthy, users won’t want to take the chance of trusting payment details to potentially fraudulent services.
Paying for ad-free experiences
Google has a service called Contributor which offers consumers an option of paying a small monthly figure in return for ad-free access to content. Content creators and publishers receive a share of these payments as consumers access their content. It is, essentially, the micropayments model applied to content creators and publishers.
This model will depend very much on how much consumers trust the vendor. For Contributor to work, consumers must presumably have Google Accounts and be signed in to enable the system to associate a visit to a website with a specific consumer and apply the appropriate payment splits. Google Contributor offers to reduce the number of ads consumers see although the service will replace ads with images acknowledging consumers’ contributions so it doesn’t seem to be an option for consumers who want the more streamlined experience.
This is also a model I think we could see other services adopt, including Facebook which may offer something similar in return for fewer ads associated with content published natively on Facebook. Facebook is already rolling out a micropayments option through Messenger and while it was launched with payments between friends in mind, it could, once established, probably be adapted to serve publishers too.
Publishers flock to walled gardens like Facebook and Medium
The ad blocking phenomenon is hinting that the foundations publishers have built their businesses on may not be quite as solid as they previously thought. Specifically, publishers may decide that the open Web is not a sustainable platform for them and they may increasingly look to publish natively on platforms like Facebook with its Instant Articles product. After all, who better to target consumers based on a variety of signals than the biggest social network on the planet?
Making this move would involve subordinating publishers’ needs to Facebook’s overall plans but, in the face of growing ad blocking behavior and diminishing ad revenues, it remains an appealing option. Just consider that media giants such as Buzzfeed, The Washington Post and National Geographic have already started using the platform in addition to their existing distribution channels. Another emerging option for publishers is Medium which has hinted as monetization options for publishers in 2016.
Doc Searls has argued that ad blocking gives consumers an option to restore some of their bargaining power to the Web. For consumers who feel that the publishers they follow don’t make the effort to discuss which advertising options would be less problematic to them, ad blockers are another way for consumers to signal their dissatisfaction with current advertising models.
For example, look for new ways of setting terms of engagement that we each assert in our dealings online. In the past we had to accept the one-sided terms provided by websites and services. With the power to block content selectively, we can signal not only what we don’t want, but what we want and expect from the supply side of the marketplace.
Searls predicted that this power shift will have fairly serious ramifications for the industry, including the adtech industry which he foresees will undergo a substantial shake-up. He also anticipates that marketing’s emphasis will shift from sales to service –
Or, in the parlance of CRM, retention rather than acquisition. Additionally, as business becomes more subscription-based, service becomes dramatically linked to continuing revenue. This is a huge greenfield that will grow as more, and better, intelligence starts to flow back and forth between customers and companies.
He argues that we will see the emergence of a model known as “intentcasting”. Intentcasting basically involves consumers actively signalling the marketplace about our needs. As he puts it, “[t]his is where you and I do the advertising, notifying the marketplace that we need some product or service”. The shift here is a move from advertisers harvesting implicit signals based on consumers’ behavior online to express notifications from consumers about specific requirements. It’s analogous to “don’t call us, we’ll call you”.
These signals would be treated as “qualified leads” and could be sent out anonymously if the appropriate mechanisms are in place to support the exchange. It is an interesting model and we may see support for this model making its way into browsers (remember Mozilla’s aborted Persona project, now known as “Identity”?).
The road ahead
Unquestionably, there are challenges facing publishers. The number of consumers using ad blockers is nothing to be sneezed at (just consider the recent excitement when a Brazilian court effectively shut down WhatsApp in Brazil for 48 hours). I don’t see the market unscrambling this egg. To borrow another metaphor, the horse has already bolted and has a taste for its freedom.
Publishers and consumers are going to have to adapt to a new reality which, as yet, lacks much form. We will certainly see many more examples of successful and failed strategies in 2016 and I predict a strategy more in line with the Engagement strategy will stand out as more likely to succeed, at least in the interim.
Thank you for reading our “Ad Blocker Strategies” article series. Contact us for more information about how we can help you build a successful strategy using more engaging and contextually relevant ad products.