These days, nothing seems to elicit more angst in the advertising/marketing and publisher communities than ad blocking. In late January, Interactive Advertising Bureau President-CEO Randy Rothenberg called ad blockers “profiteers” and blasted ad blocking as an “old-fashioned extortion racket gussied up in the flowery but false language of contemporary consumerism.” Everyone in the advertising “ecosystem” is trying to figure the ramifications of and potential solutions for ad blocking which consumers appear to have adopted in droves.
Here at the Programmatic Insider Summit in Phoenix, it’s safe to say that ad blocking was one of the most talked-about topics on panels, at meals, during drinks, roundtables and informal conversations. There was no Jerry Spring-style chair-throwing, but it’s safe to say that Mark Addison, dubbed “Minister of Special Affairs” for Adblock Plus, has engaged in his fair share of responses to aggressive questioning.
My colleague Felicia Greiff covered the panel on Tuesday entitled “Blocked!: Is Programmatic The Culprit Or Solution To The Lost Ad Viewer” via live stream from New York.
I sat down to chat with Addison off-panel. Affable and soft-spoken, he explained that Adblock Plus is trying to educate the advertising, marketing and publishing communities.
“We won’t agree with everything [that’s said here], but at least we’re trying to explain things,” Addison told me.
But what I wanted to know is what he’s learned at the Summit so far.
“I’ve learned that ad tech is way more complex that anyone can fathom, it’s evolving very quickly and there are no easy answers.” That sounds plausible, and I agree.
Addison went on to say, “We represent the wishes of the consumers and the consumers pay the freight.”
Our conversation that followed went something like this:
Me: “But Mark, the advertisers and publishers are paying the freight. What do you mean?”
Addison: “How does an advertiser like Unilever have all that money? Consumers bought their products, so Unilever can afford to pay for advertising.
“Philosophically the whole ad industry exists because consumer buy products.”
Me: “I can’t argue with that."
I’d just bought a lip gloss at the airport. And didn’t I just order some stuff from Macy’s? And didn't I just buy an airline ticket to Phoenix? Yeah, I'm a consumer.
Addison: “Let’s do right by the consumer and find a sustainable middle ground. Technology is evolving quickly. Brands want to sell more stuff, and agencies want to be around to take a healthy commission to create those ads, so let’s find a sustainable solution.”
Me: [Can’t we all just get along?] “But Mark, what about publishers? For them it’s about finding alternative revenue sources and retaining reader trust.”
Addison: “There’s no one silver bullet for them. They can identify hybrid business models, new ways to monetize, create better ads in the first place, devise clearly marked native ads and place native properly on the page.”
Me: “Mark, what’s the fundamental problem here? What’s broken?”
Addison: “Publishers are aggregators of content and they get advertisers to advertise. Somewhere along the way, someone got greedy and started to allow ads on the publishers’ pages that weren’t good. The programmatic ad community is pushing inventory into all the available ad slots.”
“The numbers all look good. Everyone’s making money. And then along came an awareness of the ad-blocking tool, and consumers decided advertisers and publishers have ‘gone too far.’
"The rise of ad blocking coincides with the rise of programmatic media, which created a very efficient market to create really bad ads. The CPMs went down, and publishers had to put more ads out.”
Me: [Seems plausible. Note, I do not use an ad blocker yet].
Addison: “Programmatic created a very efficient way to deliver ads with less friction. Sounds great, but now we have a nearly unlimited inventory. CPMs went down, publishers didn’t know what was showing up on their pages and the consumer experience just went into the toilet. Xaxis COO Nicolle Pangis basically implied this in her presentation earlier.”
Me: “Come on, how is it possible that publishers don’t know what’s populating their pages? Are you saying they’re not looking?”
Addison had no real answer for this one.
Me: “What’s going to happen on mobile?”
Addison: “The consumer experience is going to be that much more acute on mobile because of page load issues, carrier costs and small screen size. So everything we see play out on desktop, will play out on mobile and be more acute in terms of consumers having a bad experience.”
In the end, Addison believes it will take all the stakeholders to identify solutions. Being able to reach the ad-block audience, people who are demanding a better ad experience, will be key: “that’s a very valuable audience millennials, gamers and the tech-savvy.” Who doesn’t want those people?
Regarding the 30% fee that Adblock Plus is collecting: Addison explained that it’s calculated not on all traffic, but only on the incremental revenue that a site will recognize by virtue of Adblock Plus’ whitelisting. “We think that’s a pretty fair model. We’re asking the top sites to pay for the good of everyone.”
If the incremental number of impressions recognized after whitelisting exceeds 10 million impressions a month, that is the point where a site is asked to contribute. Adblock Plus has some 40 publishers that have whitelisted; Addison declined to name them, as the companies have NDAs with Adblock Plus.
Addison maintains the ad industry killed off "Do not track" three years ago. The Electronic Frontier Foundation may have lobbied for it, but the ad industry walked away from it and refused to honor it, he says.
Addison’s bottom line is that by having the kinds of conversations he’s having at MediaPost’s Programmatic Insider Summit, along with other gatherings and speaking engagements, he believes that Adblock Plus is “narrowing the gap between advertisers’ and consumers’ understanding.”
“This is a solvable problem. We can come up with a sustainable revenue model for the Web.”
Me: “Who’s going to lead the way to the solution(s)?"
Adddison: “Everyone. All stakeholders. …I had no idea how awash in cash this industry is. A lot of people are making a lot of money."
Yes, a lot of people are making a lot of money.