Research by PageFair and Adobe in August found an 82% annual increase in the number of UK internet users adopting ad blockers on a monthly basis. Usage has accelerated in the past couple of years, the report warned, and by next year the global loss of revenue because of ad blocking could reach $41.4bn (£26.8bn).
The storm clouds darkened further last month when Apple sanctioned the use of the software in its latest operating system. If reports are to be believed, ad blocking is bad news.
The Sunday Times suggested ad blocking has already “decimated a number of companies listed in London”. Publishers have begun to hit back, such as American newspaper The Washington Post, which has tested various ways of prompting readers who use ad filters to switch them off before accessing its online content, while Trinity Mirror is “understood to be plotting a similar move” according to The Sunday Times report.
So is ad blocking a real and present danger to brands and if so, what do marketers do about it? Do they fight fire with fire and use technology to sidestep the ad blocking software, penalise those using it as The Washington Post has done, or do they rethink their marketing strategy so that online ads are less irritating and less likely to prompt installations of ad blocking software?
“When you see a consumer-led technology that disrupts a core medium, then you have to sit up and listen,” says the Post Office’s CMO Pete Markey. “Ignoring it is not an option and something will have to change.”
Research from the Internet Advertising Bureau (IAB) shows there are common gripes: people find ads too interruptive (73%), annoying (55%) and irrelevant (46%), while 54% say they slow down the browsing speed. At the same time, the ads eat away at data tariffs and reduce the life of the average smartphone battery. With this in mind, it is hardly surprising to find that one in five UK consumers are already ad blocking on their mobiles and 52% are blocking all ads.
Just how damaging, or costly, this will be is not clear. The billions of dollars quoted by PageFair were tempered recently by Swiss bank UBS. “We believe concerns over iOS ad blockers are overblown,” says the company’s internet and interactive entertainment analyst Eric Sheridan. Even assuming a high penetration rate among Safari users, he projects the effect will be “only $1bn globally”, which equates to around 0.5% of digital advertising industry revenue.
PageFair CEO Sean Blanchfield believes that fighting ad blocking is nigh on impossible: “The ad block community is large, sophisticated and resourceful. Companies that try to play ‘cat and mouse’ against blocked ads quickly lose,” he noted in the company’s August report.
Unsurprisingly, those selling software to counter ad blockers disagree. One of the most high-profile is Sourcepoint. Launched this summer, the company was co-founded by former Google employee Ben Barokas. “Although users have the legal right to strip out the advertising from web pages, publishers also have the right to prevent users from accessing their content if they modify the web page,” he said recently.
Sourcepoint reportedly has 22 publishers on its books already, however marketers fear this ‘technology over technique’ approach could just see them chasing their tails. The Post Office’s Markey says: “It doesn’t feel like a sustainable [option] for the future.”
Given the consumer backlash – evidenced not only in the rise of ad blocking software but in feedback on internet forums – advertisers are faced with the stark realisation that ad blocking is endemic because online advertising has become so invasive that hundreds of millions of people are willing to take matters into their own hands.
Using technology so brands can fire more of the same at them just is not worth it, says Steve Mills, client-side direct marketing manager at PMC Telecom. “If a customer has purposely used an ad blocker and then they still see ads; it will aggravate them not convert them.”
Emily Beach, head of direct acquisition and Europe marketing at Bupa Global, which partners with agency DigitasLBi on its online acquisition strategy, says the industry needs to consider “what consumers are telling us [by ad blocking]”.
“We need to think customer-first. If they’re blocking our ads, they’re telling us something: we’re not getting to them in the right places. Consumers require content that’s of use to them, that tells a story. You’re not going to get to someone who’s blocking ads by overcoming their software – they’ll never click. It’s about telling a story for them in the right space and that may be natively or through content.”
Content marketing replacing ads
This is the more sustainable – and formidable – solution: bringing people ads that they want to see. As such, “this issue goes right to the heart of the relationship between consumers and advertising,” says IAB director of data and industry programmes Steve Chester.
Indeed, there is a fear that the debate is being hijacked and oversimplified in a bid to tar the entire industry, and all ads, with the same brush. The fact that the sector has to evolve is not in doubt, but to say people do not want ads at all is not the case.
Kenyatte Nelson, marketing director at Shop Direct, says: “There’s this idea that people don’t like advertising – and as an American I can tell you that’s not true. [In the States, we have the] Super Bowl, which many people spend three hours watching because they know the commercials will be as entertaining as they are informative. [In the UK], when John Lewis does an amazing Christmas ad everyone knows it’s advertising but they still share it.”
Shop Direct is using insight in an attempt to create entertaining, informative and relevant content for consumers, says Nelson. He cites a link-up between the company’s Very.co.uk site and ITV talent show The X Factor, which allows the brand to serve online ads during the programme showing how viewers can replicate a contestant’s ‘look’ with the retailer’s clothing.
“You need to use the tools to target the right thing at the right person at the right time,” he says. “If advertising is great, then consumers will acknowledge it. If it’s banners, pop ups and you telling me [about promotions], then [shoppers] will hit the ‘x’ button all day long.”
Encouraging the user to resist the temptation to close an advert immediately is one thing, keeping them engaged for an extended period is quite another. English National Opera (ENO) has been working with Silence Media on full-page online advertising – an approach that “has the potential to be intrusive”, according to director of marketing and brand Claire Round. However, “careful targeting” means the ads are served only to those likely to want to engage.
Better targeting and creative
Round explains using the example of a recent web banner ad that ENO ran, which opened into a full-page video trailer when hovered over with a mouse. “When we launched the campaign for our recent production of Bizet’s Carmen we tested various rollover messages to see which generated the highest level of engagement. We discovered culture audiences were more likely to engage with an emotive message promising ‘lust and passion’ than with a descriptive message that detailed the content of the full-page creative,” she explains.
“Users were spending an average of 41.95 seconds on the full-page ad – 10 to 14 seconds above our benchmark – indicating they chose to be there. When advertisers understand what their audiences really want, they can deliver a captivating and engaging experience.”
In light of the ad blocking backlash, keeping up with consumer expectations is clearly something that brands are not yet “super successful at”, says Bupa Global’s Beach. There are fine lines to tread in avoiding disruption and intrusion, she explains.
“Being in the right spot at the right time – I wouldn’t call that intrusion, I would call it good positioning. We’re not intruding because we have listened to what the user is interested in through the data available to us, and tailored our messages accordingly in order to be legitimately part of the conversation. Too intrusive is just going to turn users off and could, ultimately, damage your brand.”
Where the lines are drawn depends on a number of factors, not least how much consumers are willing to accept in order to gain access to free content. Publishers have started to react to the ad blocking brigade, and many others admit that it is high on the priority list.
“It’s a big focus for us,” says Vicky Foster, commercial director for digital at Bauer Media. “Is it a real threat? Yes, it is. But it’s also a threat to consumers. A lot of our audience needs to understand that to [provide] engaging content we need the advertising.”
The problem for publishers
Ad blocking has created more than a headache for the UK’s big media companies and June’s attitudinal survey by the Internet Advertising Bureau (IAB) gives few reasons for cheer: the majority of people surveyed say they are after free content and no ads. Yet research by Teads shows that 65% of adults say society would be ‘worse off’ without free or low-cost, high-quality editorial from newspapers, magazines and websites.
What is more, those who use ad blockers are 12% more likely to value low-cost or free editorial than the general population. This leaves publishers with the unenviable task of educating their customers about their business model. “People are intelligent, but they don’t make the leap between the [paid-for and ad-funded] models,” says IAB director of data and industry programmes Steve Chester.
Some have got used to ‘paying’ for the free model by ‘suffering’ the adverts, but as ad blocking becomes ubiquitous the advertising industry will inevitably have to up its game to build the bridges between consumers and the content.
Bloomberg Media’s commercial director Matt Teeman explains: “If as an industry we’re finding that consumers continue to experience apathy towards online advertising, we need to get to the bottom of why that is, otherwise the model implodes – it’s a simple as that. We need to understand what they like and dislike [not only] editorially but commercially too.”
The IAB found 56% of consumers are not aware that ad blocking can hit website revenues, but once they find out only 10% say they are less likely to block ads as a result. “I think the real question here is what type of advertising they are willing to suffer,” says Emily Beach, head of direct acquisition and Europe marketing for Bupa Global.
“Informative, creative in-page video, for example, might be more acceptable than poorly designed pop-ups that not only interrupt the user’s journey but aren’t relevant and look like something straight out of 1999. As advertisers, we have to move with our audiences and their demands in order to succeed.”
This is not about producing adverts that are merely bearable, it is about producing ads that will resonate with users and inspire them to engage further, she explains. “If those ads don’t meet the users ’high expectations, they become irrelevant – and even worse – annoying.”