Advertising Industry Faces Its Napster Moment

Just a few weeks ago the publishing and advertising industries seemed to wake up to find millions had enthusiastically installed ad-blocking software. The tipping point might have been Apple’s iOS9 release, which enables ad-blocking. But we should not be surprised. We already lived through a similar scenario with the digital disruption of the music industry. Those of us who work in the vast marketing ecosystem should take those lessons to heart if we hope to survive the consumer revolution at our gates.

You Cannot Fight Consumer Demand

Remember at the turn of the century when a friend showed you how to burn a CD or install Napster? You felt a little bit evil, but the excitement of converting your music collection to MP3s, or getting that one song you liked without forking over $14.99 for a full album, was too amazing. 



Now flash forward to when the guy across from your desk installed Ad Block Plus on your browser. Within seconds you were surfing the web without annoying banners and slow downloads. Sure, you felt a bit guilty, but also righteous in fighting an advertising industry seemingly engineered to stalk and trick you into clicking.

Back then, the Recording Industry Association of America and a handful of big music labels attempted to fight the tide of consumer demand. They sued downloaders, threatened Internet providers, and created ads to teach us that stealing music is wrong. Today, the Interactive Advertising Bureau is considering lawsuits against ad-blocking software makers. Publishers are trying everything from guilt trips to donation requests to hindering access to visitors with ad-blockers. 

As in music, this is all for naught. We in the marketing and publishing industry have fallen victim to the tragedy of the commons. Like the classic economic story of over-fishing, bad actors and growing pressure to hit our numbers led us to make the Internet worse for the people who buy our stuff—just as the music industry forced everything from Mini-Disc to Mmmbop down our throats.

We will fall faster and farther if we fail to change our ways. Unlike music, people have little respect for advertising, and there are too many industry players and places to get information to afford a coordinated defense. Our consumers are also ~15 years more experienced in digital technology.

Accept the Challenge By Improving

The music industry eventually re-organized itself to survive and improve by embracing consumer demand and creating new products. Advertisers and publishers must ramp up our efforts to do the same. 

I am encouraged by the rise of native advertising, which represents a way for publishers to reap 100 times more revenue per visitor compared to banners. Consumers benefit because the content itself earns their click and adds value to their lives. Through native, marketers can tell stories that are 100 times deeper than a banner ad. BuzzFeed has proven this model can work and scale.

The turning points in music were led by Apple, which unleashed the mass market of piracy with the iPod, then created a new business model with $0.99 downloads. Retired pirates happily forked over money.

In publishing and advertising we might see Apple’s embrace of ad-blocking—a step meant to make life better for users of its $600 devices—unleash the market forces of innovation. With iOS9, Apple included News, a Flipboard-like reading app that allows for higher quality advertising.

Of course our industry fears that the shift to apps made by Apple, Facebook, Google and others will hurt their ability to easily track consumers and do automated ad bidding. But embracing these players—which help control us marketers from our worst habits—might be the best medicine. 

These giants will keep competing with each other to develop better solutions for marketers and consumers. And don’t forget the little guy—as the future Pandora and Spotify of digital marketing are plugging away in a dorm room right now. 

Life went on after the Napster-pocalypse. We have more, better music choices than ever, concert attendance (and prices) at record highs, and somehow the Top 40 remains filled without record stores or Casey Kasem. Web publishing and advertising are at the verge of their moment. Which side of history will your business be on?

2 comments about "Advertising Industry Faces Its Napster Moment".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, September 30, 2015 at 4:18 p.m.

    I know I have been on a one man crusade about the other problems with showing ads and not just ad-blocking.   With that said, I still feel strongly that how ads are distributed and by whom is just as important and maybe more so than the blocking apps. 

    The real problem that caused the blocking apps in the first place is a lack of trust that exist between the publishers, ad networks/distributors and advertisers.  It is presumed that since Google is the biggest distribution of digital ads, they are 100 percent correct and are not challenged on whether their model is best for all.  I am here to say that after 1.5 billion pages views over 11 years, I do not believe Google’s AdSense and AdWords model is working for the best interest of all.  Google has benefited greatly but has the publishers or the advertisers who have submitted the ads?  I know the publishers are losing more so today than 5 years ago and the advertisers are not getting the numbers they desire.

    This problem is about one thing that is control of the digital advertising marketing place. Google controls the flow of revenue, ad placements and the rules for advertising online.  The ad blocking apps came about as much because of the rules controlled by Google as well as the opportunity to make some quick bucks selling the app.  The publishers have no say in the matter.  The advertisers have little also. 

    What is needed is an ad committee made up of all parties to make the ad industry fair to all instead of a very small handful.

  2. Paula Lynn from Who Else Unlimited, October 17, 2015 at 4:09 p.m.

    Craig, your last sentence applies to more than the ad and media conglomerates. 

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