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The following post was written by Noya Lizor, who was Director of Content at Viola from 2014-2019.
As someone who used to work as an ad-agency copywriter, and as an editor of ad-dependent publications, and who these days works as a content marketer with a painfully acute appreciation for just how hard it is to promote something to a great many people, while simultaneously dodging disruptive ads daily (much like tiptoeing through a never-ending digital dung patch) – I have been a bit torn about ad blocking. But with something like 200 million active ad blockers worldwide and an install rate that’s growing exponentially every year, it occurred to me recently that ad blocking is here to stay no matter what I think of it. The seeds of revolution have been sown, and although it remains to be seen how it will all pan out, it’s pretty clear that we’re living through historic times for the internet.
In this post:
- Notable facts about ad blocking
- Arguments for and against ad blocking
- Why forcefully blocking ad blockers is a lousy idea
- Emerging new ad formats and the importance of considering millennials
- Who’s running the ad blocking show?
- Final thoughts
- Ad blocking bibliography (a massive list of links to articles about ad blocking)
Until around 6 months ago I didn’t even know about ad blocking, but after reading about it extensively (check out my bibliography at the bottom of this post), I quickly learned that the ad blocking community has long since stopped being an irksome ‘fringe group’ and is now 200 million users strong (at least). And just as I discovered it ‘suddenly’ even though it’s been around for years, more and more people have been discovering and embracing it, giving publishers, advertisers and ad tech folk reason to worry, and I mean really sweat.
For the benefit of readers who aren’t up-to-date on this topic, here are a few notable facts:
Ad blocking is done by installing a browser extension (for desktop) or app (for mobile browsing) that removes ads from the internet. Apple’s newly-released iOS9 also includes tools that allow developers to create ad blockers.
On some sites like Facebook and Google, the ads are an integrated part of the webpage and can’t be blocked, so on these websites the extension only hides the ads, so you don’t see them but they still load in the background.
According to the 2015 Ad Blocking Report recently released by Adobe and PageFair, a company that provides “counter ad block solutions to web publishers”:
* It is estimated that Ad blocking will cost publishers nearly $22 billion during 2015.
* There are now 198 million active adblock users around the world
* Globally, the number of people using ad blocking software grew by 41% year over year (Q2 2014 – Q2 2015).
* 16% of the US online population blocked ads during Q2 2015.
Source: 2015 Ad Blocking Report
Display ads still account for the bulk of online ads. According to eMarketer’s June 2015 Digital Display Roundup, advertisers around the world spend more on digital display formats than any other internet based-ads, and marketers will spend $75.5 billion on display advertising this year (including $15.55 billion on mobile display in the US), making display the fastest-growing of any ad format worldwide”, further predicting that “by 2019, 47.4% of all digital ad spending will go toward display”.
These are astounding figures, especially in light of the fact that according to Google’s Display Benchmarks tool the average CTR for display ads stands at a mere 0.09%. Or in other words, 99.9% of banner ads generate no measurable engagement.
Half of all online ads are never even seen by human beings due to huge amounts of traffic and clicks from “bots” that mimic the activities of humans by scrolling through websites and clicking on links, just like people do.
Click-fraud is rampant. According to some estimates, as much as 60% of the traffic on the Internet is non-human.
From Incapsula’s Bot Traffic Report 2014 [infographic]
And as though the click-fraud problem weren’t enough, according to Google, 56% of display ads aren’t seen due to viewability issues.
Snapshot from a Google infographic titled 5 Factors of Display Viewability
Given these astonishing barriers to display ad effectiveness, one wonders not only how their abysmal ROI justifies a mind-boggling investment of billions, but that advertisers are set to increase their display ad-spend over the next few years.
On my quest to form a well-informed opinion about the ad blocking phenomenon, I have encountered virtually all of the main arguments for and against it. Here are a few of them:
The arguments AGAINST ad blocking:
1. Ad blocking is immoral because it endangers the livelihood of publishers who rely on ad revenue as the cornerstone of their business model. If these publishers can’t support themselves, they’ll have no choice but to come up with alternative income channels, or shut their websites down completely since they won’t be able to cover operating costs. Ironically, this may also hurt the people who enjoy visiting those sites (presuming that the ads aren’t already spoiling the experience) because by blocking ads, they will be partially responsible for “killing” those websites.
2. It will be harder for advertisers to reach potential customers. Although there’s a variety of distribution channels for online content (even paid ones) that don’t include display ads – like native advertising and sponsored or branded content, for example – for many retailers, display advertising is simply a given, and if you take that option away, they’ll be hard pressed to find an alternative way of reaching customers en masse online. Opponents of display advertising would argue that their money would be better spent on other forms of advertising anyway, considering the lousy performance of display ads in general (more in the list of “FOR” arguments below).
3. Ad tech – a global industry worth billions that collects and uses data to optimize ad delivery in the hopes of maximizing engagement – will be really pissed. If ad-blocking downloads continues to grow at the current rates, very soon no amount of programmatic wizardry will help advertisers, publishers or ad networks because their display ads simply won’t be served or seen. It seems unfathomable that such a massive industry should suffer such a devastating blow.
4. Subscription models may send us broke. The argument is that since it costs publishers money to create content and maintain their websites, if people want to continue enjoying that content for free, they must simply put up with ads, even if it’s at the expense of a decent user experience. If they’re not willing to put up with it and use ad blockers, then publishers may start charging for their content, which mean that the internet would no longer be free. There would essentially be a toll booth at the entrance to many of our favorite websites, and obviously there’s no way we could pay every time.
This argument is based on the premise, however, that display ads are the only (or the main) way of monetizing the web while keeping the content free, but supporters of ad blocking argue that just because we have been forced to accept display ads the status quo and “the price we have to pay” to enjoy a free internet (except that it’s not really free, we still have to pay internet providers and mobile carriers for data plans), that doesn’t mean that there isn’t another viable alternative, we just haven’t discovered it yet. For all we know it could be about to present itself any day now, and there are almost certainly quite a few clever people working on it right this very instant.
The arguments FOR ad blocking:
1. Without ads, web pages look a lot ‘cleaner’ and load a hell of a lot faster. When ads are blocked, so are many of the scripts that run behind the scenes related to how the ads are served and the data they collect about the user. When these scripts are blocked, web pages load significantly faster. Also, with the ads blocked or hidden, users can focus on the content without being distracted by all the advertising hoopla around it. It’s actually quite delightful.
2. Malvertising (“malicious advertising”): Ads can be dangerous! Ads have been known to pass on malware to unsuspecting users, which is in itself a perfectly legitimate reason to eliminate all ads.
According to Invincea, a company that provides anti-malware solutions, malvertising was one of the biggest threats to endpoint security in the first six months of 2015, causing an estimated $525 million in damages related to repair and recovery costs.
It’s interesting to note that Amazon have just removed all Flash ads from their website and Google announced that it too will automatically pause web ads that use Flash as of September. This means that videos and animations in ads using Adobe’s Flash technology will no longer autoplay in Chrome, but ads using HTML5 will continue to work.
Flash ads are known to be potential conduits for malware, so the timing of this move is somewhat telling, coming just a few months after June (2015) being declared as “the worst month of malvertising basically ever“. Could this be Google’s way of admitting that they have long been aware of how annoying and potentially dangerous Flash-based ads have been? Whatever their motivation, it’s a welcome development for internet users, but probably a case of “too little, too late”, since the reputation of display ads was ruined long ago for a myriad of reasons, and not just because of Flash.
3. Display ads can be annoying as hell. Just because display ads have existed for 30 years doesn’t mean that they were ever popular, especially the kind that disrupt your online experience. Ever found yourself happily browsing online but when you accidentally move your mouse over an ad, or even without doing anything at all, the ad either takes over the whole page, or starts flashing or playing sounds, or hides the content you’re trying to read, or disturbs you in some other annoying way? It’s one thing for ads to just sit there, but so many of them actually interfere with what we’re trying to do on the page, that honestly, how could you blame anyone for trying to block them?
And if they’re not already annoying enough on desktop, they’re even more annoying on mobile. In fact, it’s a wonder that advertisers see fit to continue using an ad unit that was invented 30 years ago on today’s small screens. The nuisance level is almost comical, with display ads sometimes taking up half of the screen space (or more) when all you really want to do is read or view the damned content. Surely other ad units would be better received and more effective.
4. We’re pretty much ad-blind, so display ads don’t really work anyway. In 1997 Jakob Nielson, the leading web usability guru, studied the eye pattern of internet users with the help of heatmaps. He discovered what he called “banner blindness”, a phenomenon where “internet users have been programmed to subconsciously ignore the presence of online ads, not even glancing in the physical space on the page where assumed ads are located.” Another highly likely reason for the teeny-tiny 0.09% average clickthrough rate for display ads.
5. Mobile ads consume a substantial amount of the data that mobile subscribers pay for and drain our phone batteries. Roi Carthy, CMO of Shine – an Israeli company that claims to champion the consumer’s right to control mobile ads – estimates that, depending on your geography, ads are using up 10-50% of user’s data plans (not to mention sucking up battery life, and making load times slower.)
6. Display ads are akin to email SPAM only instead of encountering them in your inbox, you see them (involuntarily) while you surf the web. As a devoutly permission-based email marketer (among other things) I loathe spammers who feel that they have a right to invade the privacy of my inbox without my permission. Display ads are just as spammy in that they too are uninvited (to my knowledge most people don’t surf the web for the ads), only most people – a.k.a. the ones who have yet to discover ad blockers – don’t know that there’s a way to avoid seeing them.
If people can unsubscribe from emails they don’t want to see, why shouldn’t they be able to unsubscribe from ads they don’t want to see? Shouldn’t they be allowed to be in charge of their own online experience?
7. Ads that follow you around as you surf the web are creepy. The notion of using data about internet users for the purpose of introducing them to products that may genuinely interest them – which is the main premise of programmatic ad tech – is a good idea in theory, but for all the genuinely clever ad tech solutions that keep being developed, it seems that there have been too many not very effective incarnations of this technology in the past that have given current ad smarts a bad rap.
Many people don’t like the idea that their every online move is being watched and that personal data about them is being collected without their awareness or consent, all so that advertisers can shove “more relevant” products in their faces. And to make things worse, sometimes you get ‘boxed’ as a persona that isn’t actually accurate. For example, you might see ads in a language that’s native to your geographical location even though you don’t speak that language, or you see ads for products similar to something you just purchased even though you have absolutely no intention of buying it again so soon, or you start seeing ads over and over again for something that was being peddled in a website you visited randomly despite having no interest in it at all.
In short, despite all the positives associated with ad tech smarts, there is a stigma associated with it that stems from legitimate frustrations and concerns, and these must be addressed somehow.
There are probably more arguments for and against ad blocking, but these seem to be the ones that resonate most with opponents and advocates, with each camp generally very impassioned about their chosen stance.
Here’s a (not so) bright idea: Let’s block the ad blockers!
In their bid to curb the ad blocking problem, some publishers have been turning to anti ad-blocking solutions in order to bypass ad blockers with a technology that allows the ads to appear anyway.
Ad blocking performs a function that’s similar to opting out of an email newsletter, in that it “cleans” the viewer audience of people who aren’t interested in engaging with ads at all. But this seems to be lost on publishers who have opted to force the portion of their audience that has actively gone out of its way to avoid seeing display ads, to put up with them anyway. It’s not only a waste of money, since these people aren’t ever likely to click on the ads, but to make matters worse, the approach of “outsmarting” by force is a blatant disregard for their users’ preferences, and a move that’s sure to alienate them even more.
The argument for anti-ad blockers is that since the publishers create the content, it’s their right to determine who they should share it with and therefore they are under no obligation to satisfy the preferences of those who don’t want to “pay” for it by agreeing to see ads. But using countermeasures to cancel out the ad blockers doesn’t address the root cause of the problem; it only serves to exacerbate it.
Other publishers have taken a different route, either politely asking users to disable their ad blockers or “whitelist” their site – which has actually been an effective approach when the request appears genuine and respectful – or by blocking the website content to users who refuse to disable their ad blockers, which is an aggressive and extremely off-putting tact that’s almost always sure to backfire.
Even if all of the world’s leading publishers decide to unite by employing anti ad blocking technology in an effort to force people to view their display ads, people will simply find another way to consume content. It’s pretty clear from the rise in ad blocker installs that people see the display ad as an out-of-touch relic that failed to evolve along with online audiences whose relationship and interaction with content changed significantly, and who now consume at least half of their content on mobile devices, which is an environment that’s just all wrong for traditional display ads.
A recurring theme in the ad blocking debate revolves around the issue of trust. Publishers, advertisers and ad tech companies have either abused the trust of internet users or failed to earn their trust in the first place, so it’s no wonder that display ads have become so loathsome. It’s a good lesson for whatever the next incarnation of online ads will be. Jeff Jarvis put it beautifully:
“These days, it’s said that the new oil in media is not content or distribution but data. No, I will argue that value will lie in trusted relationships. If marketing and media are built on knowing and serving customers’ needs, then they will be more welcome and efficient.”
Today’s consumer-driven internet calls for a fresh and respectful approach to advertising and new ad formats that are suitable to an increasingly mobile audience.
Lately I have noticed that the debate over ad blocking seems to be shifting away from whether it’s right or wrong, to how publishers and the ad tech industry should deal with it. The reality is that ad blocking has progressed beyond “just a phase” into a problem that requires a potentially revolutionary solution (or even several of them), which is probably why newer, more innovative and more respectful ad formats are gaining popularity, and why the likes of Facebook, AOL, Google and others are experimenting with a variety of new formats like interactive video, immersive mobile ads, and various forms of native advertising that are proving to be far more palatable to users than traditional display ads.
As part of their efforts to boost traffic and generate leads, publishers have also been embracing non-intrusive content recommendations platforms like Outbrain and creative content solutions like PlayBuzz’s highly-engaging “playful content” formats. [Full disclosure: Outbrain and PlayBuzz are portfolio companies of Carmel Ventures, a Viola Group fund]. As Paran Johar, CMO of mobile ad network Jumptap says, “being able to put ads into a time-and-space context is changing the very nature of creative”:
“Creative is now being redefined; it’s part content and part context. If content is the traditional definition of creative, meaning the ad unit, the context is how the ad unit interfaces with the environment around it in terms of the media, targeting, relevancy of the message.”
And then there’s the millennial issue: One of the most worrying things for publishers and ad tech companies is that millennials are among the biggest adopters of ad blocking technology, since they represent the future of online audiences. According to PageFair CEO Sean Blanchfield, ad blocking is most popular with younger users, with a recent survey finding that 41% of American internet users aged between 18 and 29 used ad blocking software. He attributes the combination of word-of-mouth endorsements and the ease of installing ad-blocking software to the rise in usage.
Discovering formats to replace traditional display ads that are both effective and engaging for millennials is sure to be a high priority for advertisers and ad tech companies, so it’s no wonder that perhaps one of the world’s most influential millennials today is already busy innovating. Evan Spiegel – the 25 year old Co-founder & CEO of popular messaging app Snapchat – has steadfastly avoided display advertising in the app which now boasts a following of around 100 million daily active users (the vast majority of which are millennials), reiterating that “we’re building Snapchat for people, not for brands”.
Spiegel, who is obviously well aware of the ineffectiveness of display advertising among his peers, has repeatedly claimed that he would rather monetize Snapchat in a way that makes sense for his audience without sacrificing their enjoyment of the app, even if it means earning less than what might have been possible had the primary objective been to reap the highest possible revenue at all cost. The latter ‘standard’ is one that was initiated by former generations of publishers and advertisers over the last 3 decades, but as Spiegel is witnessing along with the rest of us, it’s a method that’s no longer relevant to his generation and their preferred ways of consuming content.
Evan Spiegal, CEO & Co-founder of Snapchat, introducing 3V advertising
Who’s running the ad blocking show? Because it doesn’t feel entirely kosher…
Ad blocking didn’t really start picking up serious steam until 2013, and as new companies continue to emerge in the ad blocking ecosystem – from companies that distribute ad blocking software to companies that help advertisers and publishers overcome ad blockers either by producing countermeasures or developing more effective ad practices – new issues are arising around what’s possible, what’s acceptable, what’s legal and who should be in charge of it all so that it’s fair to all of the stakeholders involved.
For example, in order to be white-listed by Adblock Plus’s “acceptable ads” program, ads need to meet certain criteria like transparency (about being ads), non-disruptive design, etc. 90% of the companies are white-listed in the program for free but the other 10% include big companies like Google, Microsoft, and Amazon who have to pay a fee in order to unblock their ads (despite the same “acceptable ads” criteria applying to payers and non-payers alike), which feels somewhat worrisome.
Another issue of concern is that some ad blocking options don’t always distinguish between traditional, “garden variety” banner ads, and newer more audience-friendly ad formats, such as native ads and sponsored content, which are also sometimes served through ad networks. Which begs the question: As advertisers clamber to find new, more respectful and “acceptable” ad formats – is it right for those who distribute the ad blockers to “play God” and stop other types of ads in their tracks as well, either because they have deemed those ads to be “unacceptable” (even though others – including the users themselves – may disagree) or because the extensions’ “filtering code” is too harsh and non-discriminatory?
It’s one thing to get rid of archaic display ads that are a pure nuisance, but it’s quite another to eliminate online advertising altogether. That’s an unrealistic solution that simply isn’t viable, and even the ad blocking companies acknowledge as much.
Although the ad blocker providers seem to have the ad-fatigued internet users’ best interests at heart, it’s also obvious that as businesses they have their own interests to promote as well, so perhaps their cause would draw less criticism from opponents and more support across the board if it also included impartial monitoring of its practices and a more collaborative relationship between the various stakeholders to make sure that ALL of their concerns are addressed fairly (which is also in the best interest of internet users).
Final thoughts
The mushrooming growth rate of internet users who are voicing their frustration with display ads by installing ad blockers en masse is as clear an indication as any that “something’s gotta give”. But in all of my reading so far, I have yet to discover a definitive solution to this conundrum which will satisfy publishers, advertisers and internet users alike – a notion that some may argue is akin to pigs flying. For the sake of people dear to me who belong to at least one of these categories (including myself), I remain hopeful.
I also believe that what may seem like an insurmountable challenge to publishers, advertisers and ad tech companies right now, actually presents an enormous opportunity. Ad-blocking need not spell the end of the free internet or the demise of ad-tech, but rather force them to adapt in accordance with the changing attitudes of modern, mobile internet audiences.
Advertisers and ad-tech companies that understand that the days of traditional, poorly-performing display ads are numbered despite the bewildering budget that’s been forecast for them over the next few years, and start thinking about how they can become key players in the next generation of ads that are transparent, respectful and even valuable to today’s online consumers – stand the best chance of leading the ad industry as it evolves.
