Forget about GDPR for a second. Ad-blockers are still a threat. - Reuters News Agency

Forget about GDPR for a second. Ad-blockers are still a threat.

REUTERS/Carlos Garcia Rawlins
By  Chaymae Samir | Jun 25, 2019

With Google Chrome’s built-in ad-blocker spreading globally in July, it’s important to analyze the current state of ad-blocking worldwide, then understand how to message users and monetize.

The hysteria around ad-blockers seems to have settled this past year. GDPR has been the beast to tame, but as we journey into the third quarter of the year, we must address ad-blocking as it’s deemed a substantial threat to both publishers’ and advertisers’ revenues. 

Ad-blocking is when internet users install software on their computers and smartphones to prevent ads, which many readers find annoying, from displaying.

The Association for Online Publishers (AOA), a UK publisher trade body, aggregated data from 40 of its members including the Guardian, The Telegraph, Dennis and Condé Nast and found that the average publisher loses approximately £630,000 in annual revenue.

In fact and according to Informa Group, publishers worldwide stand to lose $35b by 2020 if the risks from the blocked web aren’t mitigated.

Ad blocking hasn’t vanished. It’s still a threat that can’t be forgotten. Publishers still need to find a route forward,”

says Nick Flood, deputy managing director of digital at Dennis Publishing. 

The current and predicted losses are a reminder that, while ad-blocking has dropped down on the list of urgent matters, the issue should still be top of mind.

Ad-blockers are more popular in emerging markets where internet access is more expensive and much slower

The Middle East, Africa and Asia Pacific are the regions where ad-blocking is the most prevalent.

More than half of the internet population in MEA uses ad-blockers, up from 47% in Q2 2017. The UAE alone has seen its ad-blocking adoption skyrocket to 54% in Q4 2018, an increase of 30%.

In these fast-growth markets, data infrastructures are often less developed which means that ads hinder page-load times and waste costly data allowance. 

Moreover, in emerging markets, mobile is favored over desktop to access the internet:

  • Around 80% of internet visits by Indians happen via mobile
  • Around two-thirds of Indonesian and South African internet visits will come via mobile
  • Over 50% of Chinese internet visits come from mobile.

For publishers and advertisers, this means that their ads cause annoyance as they take up a higher proportion of screen space and are more likely to be invasive for users in emerging markets.

In Europe, ad-blocking rates are falling, but publishers’ losses jump to £18m

While it is positive to see ad-blocking rates fall, the effects on publisher revenues continue to cause concern. Online advertising continues to be a primary driver of premium publisher revenues, with display formats up 8.5% in 2018 compared to 2017.’’

says Richard Reeves, managing director at the AOP 

In the last three months of 2018, the average number of blocked ad impressions decreased slightly to 10.2%, from 12.8% in 2016, the highest these rates have been.

Blocked impressions on desktop have fallen slightly to 21.6% but mobile is still growing with 2.4% impressions being blocked, compared to 0.4% in 2016.

Despite this, the amount of lost revenue is increasing, as the number of total impressions publishers serve has risen.

The AOP estimates that the median annual publisher loss is nearly £950,000 ($1.2 million) in revenue due to blocked ad impressions. Across all 11 members audited, this totals nearly £18.4 million ($23.9 million), up from £10.9 million ($14.2 million) in 2016.

According to Richard Reeves, managing director at the AOP, this increase was expected when considering the overall context of publisher growing revenues: “The threat of ad blocking is being contained and understood rather than solved, and you need information to do that,” said Reeves.

Ben Williams, director of advocacy at Adblock Plus, said the findings point to a trend that more people than ever before are filtering ads online, rather than completely blocking them.

“It’s not a surprise that ad-blocking rates on desktop have decelerated slightly here. This is something many have predicted for a while in markets like the UK, where desktop ad-blocking boomed for a few years. On the other hand, the increase in ad-blocking on mobile devices should continue, as more browser makers respond to users’ growing demand for increased privacy protection and control – just two benefits that content-filtering software provides.”

The issue is more prevalent with 18-24-year-olds but they’re willing to negotiate

This is a generation in-tune with invasive advertising and are wary about the types of ads they expect to see in the future. But equally, this is also a generation provided with the means to better control their online experience with tools like content-filtering, ad-tracking and ad-blocking technologies.”

Ben Williams, Director of advocacy, eyeo

New research from eyeo, the makers of Adblock Plus, found that 18-24-year-olds represent the biggest ad-blocking user demographic, with 66% having some form of an ad-blocker installed on their devices.

In this regard, many publishers, understandably, have attempted to find solutions. These solutions include paywalls, anti-adblock walls, premium content, and limits on how many free articles can be read before paying. They also have been experimenting with circumvention. 

This workaround refers to an attempt to reinject ads into sites viewed by an ad-blocking user, effectively circumventing the ad blocker. And the report warns publishers who engage in circumvention technologies risk further alienating users.

Because if an overwhelming majority of 18-24-year-olds in the UK (90%) say they understand the importance of advertising to sustaining the future of publishing, the study revealed that 91% would be ‘annoyed’ if a website disabled their ad-blocker without their permission. 70% also stated they would be unlikely to return to a website which disabled their ad-blocker without their permission.

Ben Williams, director of advocacy at Eyeo warns: “Online users are happy to receive adverts so long as they remain in control but become agitated when that control is wrestled from them.”

With the 18-24-year-olds, the shift has been from ad-blocking to ad-filtering. This generation of online users is prepares to enter into an improved value exchange as long as they remain in control of what and how much content they see.

Entertaining and personalized ads are the way forward

There are so many opportunities for our industry to keep these numbers from increasing. The data shows it’s not that consumers don’t like ads, it’s the content and delivery that is directly affecting their decision to turn on ad-blocking,”

says Greg Mason, Effective Measure’s Sub Saharan Africa Managing Director

Despite an overwhelming global consensus that ads are too interruptive, 31% of ad-blockers find out about new brands via online ads. This signals that relevant and unobtrusive ads can appeal to adblock users.

When targeting the right audience with the right ads, on the right channels, publishers can yield rewards for their advertisers. 

In fact, personalized ads have the greatest traction amongst the 16-24-year-olds, putting it at about the same level as an update on a brand’s social network page, and, in emerging markets such as Indonesia, where ad-blocking is at its peak.

In Latin America

Speaking to Reuters Community about the use of ad-blocking technology in Latin America, CEO of Rede Gazeta and VP of ANJ, Café Linderberg said:

‘’we believe the most effective approach is to eliminate the ad formats that are annoying and contribute to a poor user experience.
In our new site design, we aim at integrating content and ads in a way that the ads actually contribute to an overall positive user experience. In particular, the capability of delivering personalized content to our users, should mean that the advertising is, in many cases, as relevant as the editorial content.’’

It is clear that users are increasingly looking for meaning behind the content they consume, ads included. Branded content should be personalized, relevant and entertaining to bring ad-blockers onto the brands’ side.

The ad-blocking conversation seems to be absorbed into the largest consent discussion, where publishers are required to be more explicit with data gathering and the delivery and purpose of ads they serve. Consumers hold experience above anything else and as a result, post-GDPR publishers and marketers need to focus on experience optimization to offset people blocking ads.