POV

Who’s afraid of the Ad Blocker?

We talked to Haroon Syed, Director of Digital Data Solutions at Annalect MENA (Omnicom Media Group’s analytics arm), about whether online ad blocking is a threat to the digital advertising industry. 

Background:

One of the many challenges marketers face today is answering the question, “Are consumers seeing my ads?”. Measuring the viewability of offline media has always been a challenge, though the advent of digital advertising has effectively solved the measurement conundrum for online media. The sophistication of data collection that comes with digital allows us to collect, analyze, deploy and measure the success of advertising online with ease. However, with the increasing advancements of ad blocking software, measurement of online media could now be at risk.  To size up the threat, just one of the software developers, AdBlock Plus, claims to have averaged 2.3 million downloads a week since 2013.

How it works:

Ad blocking refers to various techniques that prevent the display of advertising on webpages. Most ad blocking is performed by plugins, which can be added to web browsers (Firefox and Chrome being the most popular). As it stands, studies show that ad blockers are installed by 5% of the global Internet population, with variations seen across countries, age groups and consumer types. Approximately 54% of tech savvy millennials in the USA have installed ad blockers, while only 24% of those aged 30+ in Europe have them installed.

From an advertiser’s perspective, this is bad news as they pose the threat of cutting off our access to our target audiences. However, because the ad never appears to the consumer, the advertiser doesn’t actually lose any money. This is more of an issue for publishers, since serving ads is their primary source of income. For a website that serves a million page views per day, with three ads per page sold at a rate of $5 CPM (Cost Per Thousand), ad blocking could translate to a potential loss of $15,000 a day.

POV:

Today, we increasingly see people wanting to take control over what they are served online (take Facebook’s recent algorithm update for example, which allows users to control exactly what they see on their newsfeed). Simply put, most people do find ads annoying, irrelevant and obtrusive within the content they are looking at. So how can marketers offset this problem? It really just boils down to context.

Rather than advertising to the masses, marketers can take advantage of programmatic media buying to show the right ad to the right person, at the right time. This medium allows marketers to advertise online efficiently and with minimal wastage, since it mitigates the risk of showing irrelevant content to uninterested consumers. Publishers, on the other hand, can adopt a more “native” approach where content is sponsored rather than advertised. Even though native advertising is still a controversial issue, it may be one of the only ways in which a publisher can overcome the threat posed by ad blockers at present.

Having said that, we are still quite far away from the tipping point of ad blockers disrupting the advertising industry, especially here in the MENA region. Ads and publishing have historically gone hand-in-hand and the advent of ad blockers is not going to drastically change that. Even developments in the mobile space won’t throw a wrench into this. While Apple’s most recent iOS update allows mobile ad blocking to become a reality, there is still little cause for concern as these developments will only push advertisers to become even smarter with their use of mobile.

Although the use of ad blockers is increasing, the overall proportion of users is still far too low to have a negative effect on the advertising industry. However, this doesn’t mean that advertisers and publishers should ignore this issue altogether. They must join forces to overcome the challenges they face in an innovative way.