Commentary

Consumers Unaware How Much Pubs Rely On Online Ads

by Erik Sass , Staff Writer, September 4, 2015

Most consumers don’t understand the business models which support their favorite publications. Specifically, the role played by advertising, now threatened by the growing use of ad blockers.

That’s according to a new survey of 2,008 British adults by Teads. Assuming that our cousins across the pond aren’t markedly more obtuse than Americans for some reason, I’m guessing the same is true here.

Overall, 62% of the British adults surveyed by Teads either didn’t know that roughly half of newspaper revenues come from advertising in the UK, or greatly underestimated the proportion of total revenues contributed by advertising.

Perceptions were even more out of line with reality for online publications, where 75% of revenues come from ads.

Also, 65% of the respondents said they think society would be harmed by the absence of free or relatively inexpensive news publications, including newspapers, magazines and online publishers. But in a classic case of having one’s cake and eating it too, 15% of consumers surveyed said they are already using an ad blocker -- and this group was actually 12% more likely to value free or low-cost news.

Recently, a separate study from PageFair predicted ad blockers could cost publishers around $22 billion in lost advertising revenues globally this year, and the figure is set to go up as adoption of ad blockers becomes more widespread.

According to the PageFair study, the number of consumers using ad-blocking technology around the world soared from 21 million in 2009 to 198 million by the middle of this year.

There are 45 million people using ad blockers in the U.S. alone, up 48% from last year. PageFair estimates that ad blocking cost U.S. publishers $5.8 billion in lost revenues in 2014, and that figure is set to rise to $10.7 billion this year.

advertising, newspapers, online publishing

3 comments about "Consumers Unaware How Much Pubs Rely On Online Ads".

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Kirk Cheyfitz from Kirk Cheyfitz Consulting, September 4, 2015 at 6:19 p.m.
For better or worse, I believe that most consumers would not truly care if they knew. Writing about ad-blocking recently, I have mentioned the notion in the publishing industry that ad-blocking is "unethical" because readers have an unwritten contract that requires them to look at ads in exchange for getting free content. One reader of my post wrote on Facebook: "What about the ethics of abusing users with shitty ads.?" This response was fairly typical. There is a lot of anger out there at advertising that is irrelevant, time-wasting and interruptive.
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Paula Lynn from Who Else Unlimited, September 4, 2015 at 7:31 p.m.

Back to: Nobody want to pay because they are entitled. The big clash between the greed of the cacaphony of ads (vs some) and the selfishie positions (not new, but more upfront). Does this portend an explosion of a one controlling all media where selfishie positions are totally irrelevant ?

Dan Hall from Digital Marketing Professional, September 5, 2015 at 1:24 p.m.

Kirk- I would also add privacy concerns to consumer frustration. Data is currency in the digital landscape. In additon to being served ads considered "irrelevant, time-wasting and interruptive" consumers are having their data tracked and sold to help those same advertisers increase ROI. One could argue that consumers are paying twice; once when they are exposed to the ad, the second time when their info is packaged and sold in an audience segment.

After all the privacy abuse the industry has commited I don't think we are in a place to argue what is ethical. One only needs to recall the ethics of instances like Turn's "ghost cookie" to get an idea of how this trust has been abused. I would argue there is a good reason why the adoption and implementation of ad blocking tools is growing. Rather than responding to the dilemma by biting the hand that feeds and blaming the "entitled" attitude of users, the industry should listen. Whether or not users understand the pay structure for their content is irrelevant at this point, the movement has started and digging in now won't solve anything.