The inexorable march of ad-blocking is set to continue, converting the digital audiences on which publishers are pinning their revenue-generating hopes to followers of the ad-blocking philosophy.
‘Better ads’ is the rallying cry of the companies who provide the software, but ‘no ads’ is the frequent result. That’s bad news for publishers, but worse news is that there is currently no accord on what – if anything – can halt the rise of ad-blocking.
How widespread is it?
Compounding the issue for publishers is that there is no consensus on exactly how widespread the practice and knowledge of ad-blocking actually is. For instance, the Reuters Institute Digital News Report claims that 39 percent of the internet users in the UK and 47 percent in the US are using ad-blocking software.
Meanwhile, only 15 percent of the British public are supposedly using ad-blocking software (although that’s close to one in seven, hardly a small number) according to a recent poll on behalf of YouGov. And a report from PageFair suggests that the global number of active users of ad-blocking software is close to 144 million.
Possibly more concerning for publishers, however, is that the YouGov report suggests of the 44 percent of the population unaware that ads fund the ‘free internet’ to which they’re accustomed, only 10 percent are likely to stop using ad-blockers when informed of that fact. So even when sites that detect users who are employing ad-blocking software display messages imploring their users to turn the software off, it’s no guarantee that they will.
And if Google Trends is anything to go by, the awareness of ad-blocking is only set to increase:
Click here to see the Google Trends report.
That’s backed up by a corresponding report from Pagefair and Adobe that demonstrates the extent to which ad-block adoption among users coincides with the growing awareness:
While you might reasonably expect that interruptive or poor quality ads are the main reason audiences are turning to ad-blocking, there are others. In a recent Monday Note, Frédéric Filoux, the head of digital for Groupe Les Echos, pointed out that as advertising tools and trackers running in the background of publishers’ sites add to the data that has to be loaded on the user end it has a detrimental effect on an audience’s experience:
“Overall, depending on the advertising load of the site’s home page, an ad blocker cuts data transfers by half to three quarters.”
Hitting publishers where it hurts
So how much does that apathy towards the plight of publishers affect their bottom lines? According to The Economist, one publisher has seen a full fifth of its digital revenue lost that way:
“Not many publishers put a figure on their losses from ad-blocking, but ProSiebenSat.1, a German media group, has said that in 2014 the practice cost it €9.2m ($10.4m)—about a fifth of its web revenues.
“Publishers with a male, technophile audience are worst hit, says Sean Blanchfield of PageFair, an Irish startup that helps publishers quantify and manage ad-blocking. At some online video-game sites more than half of ads get blocked.”
At a Kingston University debate about ad-blocking, Dennis Interactive managing director Pete Wooton explained the extent to which his company is dependent on ads:
“At the end of the day, we really only have one revenue stream which is advertising income. At Dennis Publishing the bit of the business that is our websites is about a £15 million turnover business, and we spent about £11 million a year on creating content, building platforms… and building an audience.”
Additionally, in an article for Digiday, Ricardo Bilton has pointed out that there is collateral data from an audience’s use of ad-blocking software: It impairs the publishers’ ability to gather data on those users through tracking cookies. Data is increasingly underpinning publishers’ digital advertising strategies, to the point that a relatively detailed set of data on your users is considered ‘table stakes’ for digital publishers.
From bad to worse
The situation with regards to the uptake and use of ad-blocking isn’t likely to improve any time soon, either. In fact, as two recent related events make plain, it’s likely to get significantly worse for publishers.
Why? Ad-blocking is going mobile, and legal precedent is on its side.
While there have been homebrewed ways to block ads while browsing on mobile devices for years now, the iOS 9 update is to include the option for ad blocking on Safari as standard. As the developer documentation states:
“The new Safari release brings Content Blocking Safari Extensions to iOS. Content Blocking gives your extensions a fast and efficient way to block cookies, images, resources, pop-ups, and other content.”
Since iOS users comprise the vast majority of mobile web browsers – in the US at least – that’s suddenly very bad news for publishers, and even for Google, which reportedly sees 75 percent of its mobile revenue coming from iOS devices. That’s not so bad for Apple, however. In fact, it’s been suggested that Apple’s tacit support for adblocking is a calculated move to hurt Google directly.
And in April, Eyeo launched an open beta for its proprietary ad-blocking browser for Android devices as well. So while at the start of July only 19 percent of those using ad-blocking tools were doing so on mobile, that’s likely to increase as the option becomes more readily available.
Nor is there a particularly rosy outlook for publishers looking to prove the illegality of ad-blocking software. In April the parent company of Adblock Plus (the single most widely used ad-blocking software, with 60+ million active users) won a court battle in Germany that effectively makes use of ad-blocking legal in that territory. Ben Williams, of Adblock Plus’ parent company Eyeo said at the time (emphasis is mine):
“The Hamburg court decision is an important one because it sets a precedent that may help us avoid additional lawsuits and expenses defending what we feel is an obvious consumer right: giving people the ability to control their own screens by letting them block annoying ads and protect their privacy.”
So legal challenges can’t stop it; the migration of audiences to mobile devices is no longer a barrier to it; and as the scant 10 percent who would stop using ad-blocking when informed of its effect on publishers’ revenues demonstrates, the relationship of an audience to a specific publisher is unlikely to change it either.
And while many latched onto the claims of former Google employee Ben Barokas that he was building a solution to ad-blocking that would allow circumvention of the software, Ben Williams has previously told TheMediaBriefing that as an open-source project, ways to get around such efforts are likely to be found by Adblock Plus’ community.
The juggernaut rumbles on
But while at this point there’s little publishers can do to prevent the rise of ad-blocking, there are ways to mitigate that issue.
For one, the move by Apple to support adblocking is likely to increase publishers’ dependence on iOS apps (currently relatively immune to adblocking, though it’s always possible that will change) and the in-app ad opportunities they offer.
As we’ve previously argued, while there are legitimate worries about publishers relinquishing power to the third parties who provide those apps, the publishers stand to benefit financially from such an arrangement. Facebook Instant Articles, for instance, allows publishers access to Facebook’s ad inventory and delivery platform, both of which are hugely successful for the social giant. And as Emily Bell, director of the Tow Centre for Digital Journalism at Columbia Journalism School has said:
“If it is financially advantageous for publishers they will just do it, I have no doubt about that.”
(Unfortunately, while this potentially solves the monetary aspect of ad-blocking, it doesn’t automatically alleviate the reduction in audience data to which publishers have access unless they negotiate better deals with the third parties.)
Additionally, native advertising is a growth industry, with many publishers betting heavily on sponsored content to be an increasing proportion of their digital revenue going forward. This type of advertising has the advantages of being harder for ad-blockers to detect, since it’s effectively part of the regular content on the site.
So while there’s potentially nothing that can halt the inexorable rise of adblocking among publishers’ audiences, it needn’t be quite so bad as all that. Though they’ll take a hit in the short term, publishers should consider it more evidence that the display ad model, ported across from print, was at best a stopgap as they experimented with types of advertising more suitable for the digital environment. The rise of ad-blocking should be a catalyst, not a catastrophe.