“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Josh Dreller, Director Client & Industry Solutions at Visual IQ.
Most people aren’t fans of advertising — online or offline. They’re clutter. They’re distracting. And I’m not even talking about the barrel-bottom stuff like pop ups or flashing aliens. Who wants to wait fifteen seconds for a pre-roll to finish so you can watch the video you thought you could just click and see?
I get it.
Shortly after the first ads appeared online, coders began building ad-blocking software to keep the Internet ad free. In fact, a simple search for “ad blocking” in Google reveals link after link to various tips, tricks, apps and plug-ins to help consumers block ads. These technologies have been around for a while, but the conversation spiked recently with an article in the New York Times, Ad Blocking Raises Alarm Among Firms Like Google. The piece details a French Internet Service Provider that made waves by publicizing it would, as a default setting, block Internet advertising as part of its new software rollout.
“ClarityRay reported [in May 2012] that the overall rate of ad blocking by users was 9.26% in the U.S. and Europe. The rate ranged from 6.11% for business and finance sites to 15.58% for news sites and 17.79% for tech sites. For some sites, ad blocking reached 50%. Ad blocking is highest in Europe, where Austria is tops with a 22.5% ad blocking rate. The U.S. is slightly below average at 8.72%.”
Let’s do some quick math: a 9% ad block rate in the U.S. applied to Forrester Research’s 2013 forecast of approximately $15B in annual online display spending (banners, video ads, rich media, etc.) could potentially mean $1.5B dollars in blocked advertising per year. Projecting a conservative 3:1 return on investment, that’s $4.5B in lost revenue. Of course this is all fuzzy math. It’s very possible the people blocking ads wouldn’t have purchased from those advertisers anyway, or purchased from those brands via other channels. Regardless, if the numbers are anywhere close, it’s a major issue.
Ad Blocking = Stealing
I bet most users would applaud an ad-free Internet. However, if ad blocking were considered “stealing,” would most people pause and reconsider? I believe so.
So let’s call it what it is. Circumventing the fair value exchange of free content on a website is basically like downloading pirated music or jumping over the subway station turnstile. Users “pay” to access content by allowing ads to be shown adjacent to the free content they’re consuming. I doubt the Internet users who can’t wait to block ads would also then pay $5/month to read ESPN.com, IMDB.com, etc. Many people would probably pay for Facebook, but not the billions that are on the social network now. Can you imagine people paying per video on YouTube?
But Pandora’s box has been opened. Now, it’s up to publishers and advertisers to educate the world about the long-term implications of widespread ad blocking and how it would go hand-in-hand with the loss of free content. If people understood this, I believe most would feel compelled to NOT use blockers. As with many issues, education is the best first step toward the solution.
Ad Blocking And Attributed Measurement
Ad blocking affects more than just consumers. It’s also sparked concern among marketers regarding their ability to accurately measure display advertising performance. Is a particular online buy not working because the creative isn’t resonating with consumers? Or simply because that site has a high percentage of users blocking those ads? Ad verification can determine if an ad was actually served, but it doesn’t speak to the value of the ads that were actually seen.
Attribution management solutions solve the measurement challenge posed by ad blockers by giving partial credit to each ad within the sales funnel based on the detectable degree of influence it has on a consumer’s decision. Therefore, if an ad is blocked, it obviously has no influence on the user, and will not receive any credit for producing a sale or conversion. Conversely, if an ad wasn’t blocked (and was even seen in the visible space on the page for over a minute), its influence can also be calculated by attribution. So for those marketers leveraging an attribution solution, life goes on as normal.
Ultimately, I would like ad-blocking proponents to weigh in on the problem they’re really trying to solve. Maybe they’re concerned about issues related to online privacy and think ad blocking might help. From my experience, I can tell you that 99% of marketers want to target ads better (e.g., showing running shoe ads to users who have been reading articles on running), but they’re also consumers and don’t want to interfere with anyone’s privacy either.
If it’s really just about not seeing distracting ads, then where is the ethical line drawn with regard to bypassing the fair value exchange of free content to advertising exposure? Why is it okay to “not pay” for the videos they’re watching, the articles they’re reading, or the social networks they’re using? Even user-generated content sites like YouTube have millions of dollars in annual expenses to keep their domains running.
If ad blocking isn’t stealing, then what is it?