The ad industry is facing a crisis, thanks to the rise of ad blocking.
Ad blocking is as seismic a shift as the rise of streaming video. But from conversations I’ve had with industry players across the region, marketers and advertisers appear not to feel too worried about it for now, even as the number of users who have installed ad blockers is growing rapidly.
Many of us will remember how, not too long ago, the rise of Netflix was not taken too seriously by its competitors. Look at its success today. Similarly, in Southeast Asia, iFlix, a company that positions itself as the “Netflix of Southeast Asia” may well disrupt the industry. Or not. The point is, the ad industry needs to take the ad blocking very seriously and not dismiss it as something that will blow over eventually.
Some go with the thinking that “we shouldn't fix what isn't seriously broken”, since digital content consumption is rapidly shifting over to mobile (and mobile apps in particular), where ad blocking software doesn't work yet. So, publishers will not be affected. I believe this is short-term thinking and the logic is flawed. No one can afford to be complacent given the pace of technological change. Also, something bigger is clearly ruminating too. Users are increasingly looking for a very different experience from the one that publishers are still intent on delivering, to try to monetise ad inventory as much as possible.
I’ve also heard people say that educating consumers/users will alleviate the problem. If users somehow are able to understand the economics of the web and that viewing ads is really a part of a transaction that supports content creation, they would stop installing ad blockers. While it sounds great in theory, in reality it wouldn’t work too well. Many people, including my wife (who’s a regular consumer) already feel like they're paying for web content somehow. It’s also a very tall order to expect users to empathise with publishers, especially when they are frequently served with what they believe are invasive ads.
My view is that ad blocking is here to stay, and we need to manage as best as we can, and hopefully come up on top by delivering better experiences to consumers.
As the ad blocking phenomenon gains even more momentum, there’s bound to be winners and losers. The most vulnerable publishers are those that have commodity content, lacking in a distinctive voice, that's supported by low-quality, contextually irrelevant ads.
Those who will win are going to have to put a lot more focus on the user experience, but that’s not going to be the magic wand that makes the ad blocking problem disappear. Those lucky enough to have content that is so valuable and relevant will have consumers willing to pay for it. We may also start to see an increasing number of the winners putting content behind paywalls. Other less fortunate survivors will feel more pain as they may need to leave some revenue on the table at least in the short to middle term, in order to provide a better user experience.
Roopal Julka, head of Accuen Malaysia, Omnicom’s programmatic division, said recently ad blocking is an opportunity for the market to understand the true value of native advertising. Ultimately, I think ad formats will become less interruptive, and more publishers will adopt native. It’s critical though, that this is done in a contextually relevant way. For example, a piece of content about a mobile device, sponsored by a tech brand and served programmatically, is not likely to create much resonance with an audience that visited a particular site to gather intelligence about vacation options. It sounds obvious, but there’s many examples like on the web currently.
Unfiltered, systematic retargeting is another key reason that some audiences lean towards ad blockers. While “retargeting” to nurture and deliver a sequence of messages makes sense, we really need to think about how to make this more relevant and less repetitive. For example, serving the same content to an audience on an e-commerce platform wherever they go around the web, is in my opinion a suboptimal use of the technology, not to mention annoying.
Somehow, with the rise of ad-tech, the ability to target specific audiences based on their attributes and interests became more important than the context you were reaching them in. We need to correct that. The focus on context, which used to be everything in the advertising business when advertisers were very concerned with the nature of the TV, print and radio content they were paying to insert themselves into, got lost somewhere.
So, while the rise of ad blocking is a very serious threat that warrants a lot of attention by our industry, I think it is also a great opportunity to correct an imbalance. Context and people's mindset when they come to your site matter just as much as who they are. The publishers who get that balance right are going to be wildly successful.
Olivier Legrand is MD of LinkedIn APAC