Last month’s INMA World Congress in London hit the spot on many fronts. On a personal level, it was great to meet some of my fellow Mobile Strategies bloggers for the first time and swap stories on what’s happening on mobile in our various parts of the world.
There were also many excellent sessions showing how rapidly the publishing world is changing. It was fascinating, for example, to hear Sebastian Tomich from The New York Times and Anna Watkins from The Guardian talking about their branded content offerings for advertisers.
Representatives from two prestigious publications, famed for their in-depth news reporting and analysis, talking candidly about these whole new divisions they have each created to satisfy the changing demands of “advertisers.”
Brands that want ads that don’t look like ads and that now expect the media owner to work with them to produce beautifully crafted content that has the potential to engage readers far more deeply than any ad.
But it was the session immediately after this one that I was most interested in. It was on adblocking. Because, for all the interest and growth in branded content, the vast majority of branded activity on published media, offline or on, still takes the form of advertising, and adblocking threatens the very nature of the ad-funded business model that so many publishers rely on.
The session saw some consensus, with Johnny Ryan, head of ecosystem at PageFair, and Piers North, strategy director at Trinity Mirror, in broad agreement that the adblocking problem has been blown out of proportion.
They disagreed, though, on how to fix it. Ryan argued that the trend among publishers of blocking the adblockers is, at best, a short-term solution, telling delegates: “You hear that the messages asking people to turn off their adblockers are seeing success rates of 10% to 40%, and that sounds good, but it means that publishers are turning away 60% to 90% of those people.”
For Ryan, the answer lies in showing fewer, better, more contextually relevant ads that people will actually want to see. North had his own views on this. “I don’t believe you can ‘good ad’ your way out of this situation,” he said, adding later, “It’s not about good ads. If Picasso were alive today, he could create great ads, and they would still get blocked.”
In North’s view, publishers have every right to block the adblockers in an attempt to make them appreciate the value of the (ad-supported) content they are used to consuming for free.
“If consumers are not willing to pay, there has to be a way to fund the content and consumers have to understand that fact,” he said. “There is no consequence to adblocking right now so we need to create some and explain the value exchange.”
One thing that’s clear from sitting in on this session and many others at various events, is that the industry knows it only has itself to blame for the current predicament.
Unlike television, there are no quotas in digital advertising. For years, publishers have been free to load up their sites with as many ads as they could sell, whatever the impact on load times and, ultimately, the user experience.
The rise of adblocking is nothing more than this approach coming home to roost.
I would not set too much store either by the idea that the adblocking problem has been blown out of proportion. Ryan was keen to point out that, while adblocking is growing, the growth is linear, rather than exponential; steady, incremental growth, rather than anything explosive. In which case, publishers across the world must surely hope that the exponential phase is not just around the corner.
And even at current rates, the numbers should be enough to cause concern for anyone who makes money and pays its employees by putting ads on their site. According to a recent report issued by PageFair, 419 million people — 22% of the world’s 1.9 billion smartphone users — are already blocking ads on the mobile Web. For a medium that many people tell you so often is relatively unaffected by adblocking, that’s a worryingly high percentage.
The PageFair report also noted that downloads of mobile browsers that block ads by default grew 90% during 2015, which may not be exponential yet, but, again, it’s a large number that anyone in the mobile ad industry must hope will not have increased when we look back at what happened in 2016.
Another report, also released last week, this one from the analyst Ovum, is perhaps more worrying still, as it puts some monetary value to the rise of adblocking, looking at how much the industry stands to lose over the next few years.
The Ovum report forecasts that if publishers do not adequately respond to the threat posed by adblocking software, it could cost them up to US$78.2 billion — or 26% of total Internet advertising — by 2020. Ovum believes, however, that publishers and advertisers will respond and stem the losses. At a mere US$35.3 billion.
Even if publishers really stepped up to the plate and did everything within their power to combat adblocking, they still stand to lose US$16 billion over the next four years.
Make no mistake, the adblocking threat is real and it’s growing much too fast for most people’s liking. Whether the solution lies in blocking content to those who block ads, or enticing them back with better, more targeted ads — like North, I have my doubts on this one — a solution is needed before the adblocking phenomenon starts to claim its first casualties.