Thursday, November 12, 2015

Ad-block surge challenges digital publishers

The number of consumers actively blocking digital advertising has grown dramatically in the last five years, posing a difficult and daunting challenge to publishers across the web. Now, new developments may accelerate the troublesome trend. 

Between 2010 and the first half of this year, the number of global consumers installing ad-blocking technology on their browsers grew by nearly tenfold to 181 million, according to a survey published recently by Page Fair, a company aiming to help publishers and marketers reverse the tide.  

While active ad-blockers represent only about 7% of the world’s wired population, the practice has been adopted widely in the United States and United Kingdom, according to the Reuters Institute of Journalism at Oxford University. 

“Forty-seven percent of our U.S. sample and 39% in the U.K. don’t always see ads because they use ad-blocking software to screen them out,” said the Reuters Institute in its comprehensive annual survey of the media business. 
Elsewhere in the world, Page Fair found ad blocking ranged as high as 37% and 35%, respectively, in Greece and Poland and as low as 13% and 10%, respectively, in Italy and France.

In addition to those who actively block ads, the Reuters Institute found that 30% of respondents in the U.S. and 39% of respondents in the U.K. ignore ads when perusing the web. Further, the institute discovered that 3 in 10 respondents in the U.S. and U.K. “actively avoid sites where ads interfere with the content.”

Although marketers will be disappointed to learn that so many people tune out their carefully crafted messages, publishers at least get paid for ads that visitors ignore when visiting their sites. 

When blocking technology prevents an ad from being served, however, the publisher doesn’t get paid. And that is turning into a growing problem for everyone from gaming-site operators to the news media.

Page Fair estimates that ad blocking will deprive digital publishers worldwide of $22 billion in sales in 2015 – a sum projected to nearly double to $41 billion in 2016. The company estimates that blocking cost publishers $7 billion in sales in 2013.  

About half of the global revenue loss occurs in the United States, where Page Fair projects that blocking may crimp digital ad expenditures by 22% to deprive publishers of some $20 billion in revenues in 2016. Some analysts argue that the estimate is too high, leaving the magnitude of the potential revenue loss open to debate. But there can be little doubt that ad blocking is gaining steam.    

The reason ad blocking has accelerated in recent years is that the popular web browsers began providing free plug-ins to automatically nuke most ads. In the first six months of this year, the number of users enabling the ad blocker on Google Chrome climbed 51% to 128 million, the number of ad blockers on Mozilla’s Firefox rose 17% to 48 million and the number of blockers on Apple Safari grew 71% to 9 million. 

The majority of the ad zapping to date has occurred on desktop computers, because the penetration of ad blockers is far lower on mobile devices than desktops, according to Page Fair.  But that is about to change, because Apple, which came later to the “block party” than its competitors, is throwing its considerable weight behind improved ad blocking for its widely deployed Safari browser. Here’s why this is a big deal:

Even though Firefox holds only a tiny share of the mobile browser market, its users account for 40% of the ad blocking detected by Page Fair, thanks to the long-standing availability of ad-zapping software on Firefox. 

Safari, which is a far bigger player than Firefox because it enables 52% of mobile browsing activity, heretofore has not had a competitive ad-blocking capability. But that changed with the introduction of the recently released iOS9 operating system. As the new operating system rolls out, Page Fair expects “ad blocking on mobile Safari to trend towards the levels seen in the mobile version of Firefox.”

A number of analysts and commentators share Page Fair’s belief that the widespread adoption of ad blocking on mobile Safari will accelerate the growth of a challenge that publishers and marketers to date have been largely helpless to counteract.

Page Fair, among other companies, encourages publishers and marketers to improve the relevance of their ads while also paying ad-blocking services to let ads from their clients slip through the filters.  In addition to such efforts, some publishers have resorted to warning visitors that their sites could go out of business if too many users block too many ads.   

While there is nothing wrong with any of the above strategies, none to date seems to be slowing down ad zapping. It looks like advertisers and publishers have more work to do. 

© 2015 Editor & Publisher