Nobody wins with adblocking

Trent Lloyd, Eyeota co-founder
By Trent Lloyd, Eyeota co-founder | 5 February 2016
Eyeota co-founder and GM publisher developer Trent Lloyd

Surprise, surprise. The advertising industry thinks ad-blocking is a bad idea. But many web users – more than one million Australians – claim it provides a better online experience. Pagefair estimates that as many as 200 million web users globally might be using ad-blocking software. For them, it seems, the concept of a website funded by advertising is too intrusive to contemplate. Yet they are happy to consume the content. They like the idea of a free lunch. Yet they have cost publishers US$22 billion in 2014.

Randall Rothenberg, President of the Interactive Advertising Bureau in the US, describes ad blocking as robbery, plain and simple. He says it is “an extortionist scheme that exploits consumer disaffection and risks distorting the economics of democratic capitalism”.

Sadly, the response from those installing the software is likely to be, “well, he would say that wouldn’t he?”

It is a battle in which nobody wins. Or publishers will simply deny access to content if they sense an ad blocker is being used. That is an approach tried by Wired, the Washington Post and New Yorker. Others can be expected to follow suit, but with the subsequent loss of readership it doesn’t really fix the problem.

Without advertising, sites will disappear and thousands of people working for publishers or content companies could potentially lose their jobs.

So, how does the industry fix the problem, short of abandoning the concept of advertising and pursuing a subscriber only business model. That is not going to work, of course, particularly when it comes to news sites.

In the US The Media Insight Project showed that only 40% of millennials pay for news content and many see it as a basic right as a citizen to “know the news”. For the internet to survive, advertising has to survive.

For advertising to survive it needs to be presented in a way that won’t encourage increasing numbers of web users to switch it off. For years there is no doubt the online user experience has deteriorated due to a number of factors, such as poorly targeted ads, highly intrusive ad formats that take over the content and we have all heard people complain about being retargeted time and again after visiting certain sites.

Now is the time for publishers and advertisers to look closely as the relationship between the customer and the brand. People are less likely to object to advertising if it is relevant to them. They might even embrace it, if it provides useful information they were not previously aware of.

Stand in the foyer of an Ikea warehouse, for example, and watch how many people pick up a catalogue. That is advertising, but people want it because they like Ikea and they want to buy. The catalogue is relevant and informative.

The same can happen online, helped by richer sets of data that make targeting more effective. We know about user behaviour and, combined with demographics, there is no reason why advertising is not served to tight groups of users who will be most receptive to the message. And the message is just as important as the media planning. If you are focusing on a specific group, you need to ensure the creative approach is just as focused on that audience.

Relevancy is not the only issue. Ads are often criticised for slowing downloads and consuming more of a user’s precious data allowances. The IAB in the US is trying to tackle those issues with a L-E-A-N philosophy; encouraging advertisers to develop content that is Light, Encrypted, Ad-Choice supported and Non-invasive.

There is an analogy with the content piracy debate. Hollywood studios have repeatedly pointed to Australia as a country where illegal downloading of copyright material is rife. They have pushed for legislative change to make it easier for them to fine the offenders. The argument given by those fighting the legislation is that people download illegal content because it is not widely available in this country, distributed much later than in other markets, or it is not available in a digital format that consumers require.

People turned to piracy because the entertainment industry was not making it easy for them to see what they wanted, when they wanted it. In other words, the consumer experience had room for improvement. You have to wonder if the rise in ad-blocking is a reflection of the same issue? Does the consumer experience suck? In which case, the answer is to fix the root problem, not go hard on the perpetrators. It is clearly not their fault.

By Trent Lloyd co-founder and GM publisher development at Eyeota.

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