Ad Blocking: Is It Panic Time In Adland?
- by Steve McClellan @mp_mcclellan, August 22, 2016
With a forecast (from Adobe) that more than $40 billion will be
lost to ad blocking this year, and that over 40% of Millennials use ad blockers, is it panic time in Adland?
That was the question put to a panel at the MediaPost Programmatic Insider Summit on Monday by Moderator Kristen Faust, managing director, Performics, part of Publicis Groupe.
The panel consensus was that it is not time to panic. Much of the discussion that followed was about how creative advertising and content players need to think about how their efforts can better resonate with consumers.
Blocking the blockers certainly isn’t the answer, asserted Craig Key, svp, media Space150. That strategy, he added, “is backward.” Developing a better “connection with audience members is more important.”
Nikin Patel, director, digital, MEC, agreed. The industry needs to “listen to what users are asking for,” he said. There’s been much focus on reaching consumers at the right time with the right message, he added. But there’s often a “right way” that tends to get overlooked. “We need to find a way to re-engage,” he said.
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According to Patel, one in 10 ads in the U.S. is blocked. In other countries consumers are much less tolerant. In Germany, he noted, one in three ads is blocked.
Using data to create meaningful connections is key, said Lindsay Pullins, director programmatic media, Empower MediaMarketing. “We can learn a lot about people by looking at the ads that they watch,” she said. She noted that her agency does a lot of data mining to develop content for brands, and said, “it’s working.”
Content isn’t cheap and monetizing it can be a challenge. Brandon Geary, chief strategy officer Possible, opined that “more emphasis” should be placed on native advertising as a way of integrating marketing messages with content.
Geary cited a recent effort by Starbucks and BuzzFeed that he described as “very clean…it’s hard to tell where Starbucks ends and BuzzFeed begins.”
Perhaps a bigger issue is the lack of communication between creatives and those who plan and buy advertising. Key noted the tendency of planners to “throw a spec sheet over the fence without context,” with a mandate to have creative ready in two weeks.
But the disconnect works both ways, said Geary, who noted that creatives often dismiss programmatic as the “evil machine.”
The advent of programmatic and real-time marketing shouldn’t mean the end of thoughtful strategizing said Patel. “The power to react and turn on a dime doesn’t mean you can’t take a step back and look at it,” he said.
So instead of fixing the problem by revamping the way digital ads are placed, "scheduled" and inserted at the website level and creating sensible rules about interruptions of content usage, ad clutter and other disruptions the "answer" is for advertisers to use targeting to make their ads more appealing to digital audiences. Absolute pie in the sky thinking.
Nikin Patel is right on point—"we need to listen to what others are asking for!"
The most important -- and least discussed -- signal being sent by those who use ad blockers is that they are not finding advertising to be useful or valuable. If they want to know if there's a product that can solve a problem that they have... they can Google that. If they want to know which of those competing products is best... they can Google that, or look at Amazon reviews.
What it means to "be creative" in advertising needs to be entirely rethought. The question the industry should ask is this: how can we make advertising sufficiently useful or valuable that people would feel they are missing something if they block it?
Marketers know why advertising is useful for them. Consumers, currently, do not.
While it's commonplace these days to label digital advertising's problems as problems for the entire ad business, in reality, this is not a problem, but merely an annoyance for "legacy media" which command an overwhelming share of all branding ad dollars. In the case of print media---newspapers and, especially, magazines, there is no revolt against ads. Indeed magazine readers welcome them. Radio, for the most part, limits its dose of ads to around 12 minutes per hour and many stations offer hour-long interludes that carry no ads. No problem there. In the case of TV, the increased ad clutter---a function mainly of rating fragmenataion and the need of many channels to sell more ads to compensate fo declining ratings--- has caused some problems. But these are not of the potentially terminal type that we see developing in digital.
What's the difference?
In the case of digital, it's not just a question of "irrelevant ads"---all media have them----or even too many ads. Rather it's the helter skelter way digital ads appear, disrupting the user's content absorbing experience, disrupting the ability to focus on an item of editorial content, etc. When we watch TV we know that there willl be commercial breaks and we also know that TV's content is formatted to accomodate them. You wont be watching a gripping scene in a crime drama only to have the picture suddenly freeze while a bunch of ads load or a pop-up takes over your screen. If you are watching a your favorite baseball team at bat against an arch rival and one of your guys hits a smash to the outfield, you aren't going to be hit with a dozen ads, one loading after the other, while the play is completed but you can't see it.
It is fruitless to keep exorting advertisers to make more involving digital ads as a "solution" to what is basically digital media's organizational problem--the way it functions with everything done by computer and the resulting chaos. Fix that and, maybe, the ad blocking problem will go away---if it isn't too late.
Those who intend to skip digital ads - probably always will. This is no different than people who 'always' skip TV ads with a DVR. The difference is that most people are still exposed to some amount of live TV. One other important fact - we can mesure TV ad exposure, removing those who skipped the ad (like comScore can do with Rentrak ECR). So why not focus on who you can still reach with digital ads, and focus on ways to reach digital skippers on other media? Is that not the reason campaigns are multi-platform in the first place?
Dead right, Ed. A "contract" among media owners, advertisers and audiences -- essentially an understanding of what each does to benefit itself and the others -- is the key to creating a robust and reliable market for advertising. TV has one, and it's worked for decades. It's the reason TV commercials run every 15 minutes in pods (not in random, intrusive bursts); that programming is developed in ways that attempt to maintain audience interest through the breaks; that competitors can't advertise contiguously; and that viewers get quality programming and quality advertising or stop watching. Digital media urgently need their own contracts, built around their unique qualities as media and their relationships with and the expectations of their audiences. We are witnessing the alternative now, and it doesn't work. Rampant ad blocking is the symptom that reveals the disease.
People install ad blockers because they can. If they could block newspaper ads, they would do that too. It's a classic free-rider problem, the solution to which is a price signal to change behavior. In other words, publishers need to act quickly to erect paywalls for ad blockers or their revenues will erode.
Andrew, newspaper readers as well as magazine readers know that all they have to do is turn to the next page or simply not look at the ads. They also know that without ads they wouldn't have newspapers or mgazines to read. I don't buy the idea that they would install ad blockers for print media if they could. They wouldn't. Why? Because the ads do not interfere with their perusal of editorial content.
IMO it's not a digital problem, it's a problem with advertising itself.
Even if we imagine a perfect solution to ad blocking -- in which no consumer can ever block an ad, ever again for eternity -- the problem of advertising's lack of utility will remain.
Ed's assertion that certain print ads are welcomed is correct, but this is not because they are ads but because they are useful. If you're interested in fashion -- and have sat down to look at pictures oft the latest fashions -- an ad from Burberry is a form of useful content and not an interruption. The fact that fashion ads are visual and require almost zero time and effort to consume is a key part of their strength.
I disagree with Ed's assertion that radio ads are not a problem. In their current state they are not useful. If there was an easy way to block them, people would.
Lastly, Andrew's point about the free-rider problem is accurate. The challenge for publishers is the oversupply of nearly identical content. If site A puts its story about Godzilla rampaging across the Williamsburg Bridge behind a paywall, interested readers will simply shrug and look at site B.
Ed, I disagree. I believe that if a free service existed to wipe ads from newspapers in real-time, people would use it just like Internet ad blockers. The interesting question would be what people's price sensitivity is for ad blocking. Meaning, if ad blockers were not free, what would people be willing to pay? And how would that compare to what readers are willing to pay for content?
Brent, it IS different from those who always skip TV commercials. First off, the amount of overt ad avoidance---tuning out, to another channel or editing out the ad-- --on an average ad exposure basis is quite small---around 8-10%. A far larger form of "zapping" is not paying attention to the ad or engaging in distracting activities----but that applies to all media and certainly to digital. One of the myths fostered by the "TV is dying" folks is that the rise of Netflix and other SVOD services represents a vast cousumer revolt against TV ad clutter. It's nothing of the sort---though there is some truth to the tale. The typical Netflix subscriber watches about 3-4 hours of "linear TV" daily, especially cable but does not take the trouble of using a DVR or some other means to "zap" every commercial break---as is supposed. Some, sure, but not even close to all of them. When Nielsen finally starts reporting on this a lot of digital enthusiasts will have to gather in a secluded spot and chart a new course for their ongoing effort to picture TV as a dead duck. It's still quacking. One suggestion: fix digital before everyone is using ad blockers and advertisers who need reach are forced to go elsewhere.
Fascinating discussion! My reaction is that we're a long way from finding a formula for digital marketing that is as well accepted by both marketers and consumers as that of newspapers, magazines, radio and television. Digital simply has too many sites, all with nearly unlimited real estate, nearly unlimited layout alternatives, and a completely flat topography. As the old real estate saying goes, there are three things that matter: location, location, location. If readers are annoyed by intrusive digital ads and/or overtly sponsored content, they can move on in a nano-second. Once upon a time, consumers had a fairly friendly relationship with quality advertising creative. Not so much anymore, and the younger they are, the more likely they are to reject the value to them of most brand advertising.
I am going to make another point about ad blocking. Besides the people or companies who write the programs and apps, who benefits from ad blocking? This might be understood but number one on the list is Google AdSense and AdWords. Why? Let's say 5 years ago XYZ Corp bought or put a maxium amount of $1,000 a day from Google in ads. Ad blocking wasn't really around then so XYZ Corp ads were nearly all banners and little text link ads.
Fast forward today XYZ makes that same $1,000 a day maximum buy. While banners are still sold by Google's Panda's algorithm now sells a bigger amount of text link ads and a greater amount in Google Search and even YouTube. I been researching this subject and I am correct. Google does lose some from banners but not that much and might be coming out ahead because of text.
So there are more wolves out there than your heard of sheep you can defend. So you can either hire more hunters to go after the pack of wolves or you can expect loses. Your choice.