Growing adblocking use challenges $160bn digital ad industry

Arvind Hickman
By Arvind Hickman | 26 April 2016

Adblocking, viewability, fraud and mobilisation are the major challenges for the $160 billion digital advertising industry, a GroupM study has found.

GroupM predicts digital advertising is expected to grow by 14.4% to more than $160 billion this year, which represents 31% of all measured advertising, up from 28% in 2015.

Digital advertising will reach 2.3 billion adults and increasingly be executed programmitically - 37% of display ads in 2015, up from 21% in 2014.

Although digital momentum is strong, there are several challenges affecting its effectiveness, including ad fraud, viewability, measurement and adblocking.

The study compared adblocking data from 19 countries to analyse the scale of the problem. On average, 22% of users have adblocking software installed, although only one country had less than 15% adblocker usage – Turkey with 3%.

The countries with the highest usage were Austria (32%), Poland and France (30%), Italy (27%) and Chile (26%).

“The rise in consumer adoption of adblocking technology violates the inferred consumer contract with content owners which enables advertising investment to support content development. For this reason, and its potential to inhibit brands’ ability to reach their audiences, it merits close study and preventative measures,” says GroupM futures director Adam Smith.

“We will be tracking closely the progress of initiatives like the IAB’s LEAN program in the US which encourages publishers to develop light, encrypted, ad choices-supported, and non-invasive advertising strategies to reduce page latency and other nuisances that may encourage the adoption of blockers.”

Other important issues highlighted in the study include:

Integrity of digital supply: Impression and non-impression-based ad fraud is a risk that varies by market. GroupM recommends working with trusted partners, use of pre-bid controls in unknown markets, development of specific contracts and reliance on verification tools and vendors.

Use of apps: A majority of smartphone users have between 30 to 50 apps, providing a challenge for advertisers to create more interactive, app-native ad formats.

E-commerce: E-commerce is expected to reach $1.81 trillion this year, which is 8% of global retail. E-commerce strategies enabling transactions anywhere and anytime will become the norm.

OTT TV: TV consumption is increasingly non-linear, particularly with younger audiences but investment in. However, correspondents reported comparatively minor shifts in investment and understanding of non-traditional formats. There is also a lack of standardised audience measurement around digital video.

Applying data: The accessibility, collection and application of data from owned and third-party sources remains an imperative and a challenge for many clients.

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