Ad Blocking: Publisher’s Downfall or Saving Grace?

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Ad BlockSomewhere in the scramble to adopt digital as part of their offerings, publishers got distracted. As online users have become more technically sophisticated and media-savvy, the industry fell into an arms race that escalated into creating the most disruptive and interruptive advertising formats. Pop-ups, pre-roll videos and pop-unders have become the go-to standard in the industry to get users attention.

In response to these intrusive, and sometimes irritating, forms of online advertising, millions of users have decided to fight back by ad blocking this advertising. This action of removing or altering advertising content on a webpage, known as ad blocking, is becoming extremely prevalent these days.

According to a study conducted by PageFair and Adobe, the number of people using ad blocking software grew by 41% year over year (Q2 2014- Q2 2015).

Whether or not you are aware of it, a war has been waging between publishers, digital media and ad blocking companies. Publishers are now seeing and feeling the aftermath of their actions. According to the same study, the estimated loss of global revenue due to blocked advertising during 2015 was a whopping $21.8 billion.

Before being able to fully understand this epidemic, it’s essential to understand the most basic aspects of ad blocking.

What are ad blockers and how do they work?

As the name suggests, ad blockers are technologies that block advertisements on a webpage. For example, we’ve all visited a website before and dealt with the frustration of advertisements popping up all over the screen; luckily these ad blockers take away the misery of clicking out of several advertisements before you can continue onto the website. The ad blocking extensions/plugins, browsers, VPNs or DNS solutions act like a firewall between the web browser and all known ad servers. Most ads are blocked by open-source web browser extensions, installed by end users. The database of blocked ad servers is curated by a large and active open source community.

What are the best or most popular ad blockers?

The most popular ad block extensions on the market today are “Adblock Plus” and “AdBlock”. Once installed, these extensions block ads on websites and are effective against almost all ad formats.

According to Ben Williams, Communications and Operations Director at Eyeo, “Adblock Plus claims that their extension has been installed on people’s browsers more than 400 million times and they sit somewhere between 50 to 60 million active users.” – Eyeo is the parent company of Adblock Plus.

What are some common misconceptions about ad blockers?

Misconception #1: Ad blockers believe that all ads are bad and that ads should disappear completely.

The Reality: Ad blockers are trying to help broker a deal that encourages a positive, informative web experience for everyone. Ad blockers are keenly aware that ads play a critical role in keeping content free online; however, the ads need to be high quality, relevant and non-intrusive.

Adblock Plus conducted a survey of their users and found that roughly 70% of them are actually ok with ads as long as they comply with a set of criteria. The survey also showed that less than 10% of their users opt out of the acceptable ads program.

Misconception #2: Ad blockers extensions/plugins come pre-programmed blocking every single ad on the internet.

The Reality: Adblock Plus’ website states, “Adblock Plus itself has no functionality; it doesn’t block anything until you “tell” it what to block by adding external filter lists.”

Misconception #3: Larger companies paying to be whitelisted get their ads played more often or before other ads.

The Reality: Google and Amazon are charged because they are big players in the advertising industry and are able to afford the cost of the services. No one receives preferential treatment.

Misconception #4: Companies that are paying to be whitelisted don’t have to follow the same standards/criteria as companies that are participating for free.

The Reality: There is no way to buy a spot onto the acceptable ads list. Everyone is held to the same strict standards/criteria and goes through the same process for their ads to qualify as “acceptable.”

The Rise of Ad Blocking

Users are simply fed up with the quality and manner in which advertisements are being presented. Pop-ups, pre-roll videos and pop-unders fall under the type of annoying, disruptive ads that have driven users to install ad blockers. Also, advertisements have not adjusted to fit the medium they are being presented on.

Ben William stated, in a Business Insider article that, “Ad blocking is a symptom of bad ads. Newspaper ads, magazine ads, and TV there is a level of acceptance to a degree. But these transferred one by one over to the digital space, and that didn’t work out so well. Click-through-rates and the money people were getting back from impressions fell under a while. And the response was to just make more ads.”

Television is a great example of ad-blocking. The first way around commercials was to walk out of the room or mute the TV, but you could never skip or block the ads. As technology advanced and users demanded more control, DVR systems became available. These systems offer the ability to skip the advertisements and get the user right to the content they desire.

What is currently occurring in the digital space is a classic case of perpetuating a problem by addressing the issue, with the same strategy that worked previously, and expecting different results. Users will always find a way around ads and have now reached the tipping point where they want more control over the digital ads they are exposed to.

Publishers and media companies have backed themselves into a corner at a time when users have decided to fight back. Certain publishers have now realized that ad blocking has become a serious threat to their survival. One publisher in particular has seen substantial loss, according to the Economist, “Not many publishers put a figure on their losses from ad-blocking, but ProSiebenSat.1, a German media group, has said that in 2014 the practice cost it €9.2m ($10.4m)—about a fifth of its web revenues.”

A Continuously Growing Threat

The biggest threat to publishers was released at Apple’s September 9th event. Adblock Plus created an ad-free mobile web browser for iOS in early September. This iOS app was released just a few weeks before Safari on iOS 9 – which comes with its own ad blocker or what Apple is calling a content blocker already installed on iPhones and iPads.

Like Adblock Plus and other ad blockers, these content blockers will block advertisements, trackers and other third-party scripts. The situation for publishers is going from bad, to worse, to awful with this recent announcement. These changes are not only affecting publishers, but larger businesses such as Google. A recent analysis by Goldman Sachs estimated that of the $11.8 billion collected on mobile search ads in 2014, a reported 75 percent of its mobile revenue is coming from iOS devices.

An article in Digiday explains how dire the situation has become for publishers and media companies alike. It states, “All media must adapt to Apple. Apple is such an omnipotent force that its innovations dictate product roadmaps and revenue forecasts with equal parity. Safari is the most widely used browser for mobile globally, with 42 percent share. What’s more, mobile is now the most important platform for publishers to cater to.”

So how can publishers adapt and survive with all of these radical changes occurring all at once? This seems like a tidal wave of bad news that no one in the industry can outrun. To find out how publishers are fighting back, and not just rolling over, keep an eye out for part two of this series.

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