Digital Advertising: The Rise of the Adblocker
Continuing our follow up to the webinar we hosted on December 16th, here are the notes from the session. This post focuses on the problems that we see within online advertising, and how they’ve inexplicably create their own barrier – ad blockers.
The problems with the industry.
- Interruptive ad formats – Because of the way that online publishing models have evolved, never before has there been such as race to the bottom in terms of click generation. Online clicks are gold–dust, and they’re the lifeblood of many successful publishers that we’ll talk about later on. This means that in an unregulated environment, unscrupulous media owners and networks can engineer things to ensure that clicks are delivered – at whatever cost to the purchase funnel. There are several formats which force the user to ‘accidentally’ click on (what they weren’t even aware were) ads, just to get to the next page of ‘content’. Some ads take over your homepage, some interrupt as lightboxes without any trigger, and some expand simply because the page loads. We understand that publishers need to fund their sites, but alienating their target audiences isn’t the best way (surely?). And why do agencies allow such unscrupulous tactics? When IASH was replaced by DTSG in 2014 (and why did it take so long for an industry wide regulation to fully come into place?) it continued to merely focus on ad placements and ‘suitability’ of websites. However misleading ad formats continue to be fair game, evidently.
- Broken Ads —This is a server not loading an ad or loading the wrong one by mistake. Reid Tatoris at MediaPost suggests that these mistakes occur roughly 15% of the time.
- Bot Traffic —Whenever hackers write these automated computer programs to visit websites and post spam or create fake accounts, each visit is a pageview that results an an ad impression. According to a December 2013 report in The Atlantic, 60% of Internet traffic consists of bots.
- Click Fraud —In Tatoris' words, "People will hide ads behind other ads, spoof their domain to trick ad networks into serving higher-paying ads on their site, and purposefully send bots to a site to drive up impressions." Noam Schwartz described in TechCrunch two additional methods of alleged fraud: compressing ads into tiny one-by-one pixels that are impossible to see and using malware to send people to websites they never planned to visit and thereby generate ad impressions. AdWeek found in October 2013 that 25% of online ad impressions are allegedly fraudulent.
- Viewability – When Google launched their ad-viewability product this year, they did so by admitting that 56% of ads served were never actually seen. Worse still, those which were ‘seen’ were ruled so by the Media Rating Council rules: “A display ad is considered viewable when 50% of an ad’s pixels are in view on the screen for a minimum of one second” – Imagine if TV ads were 1 second long. Do you think they’d be effective?
Watch our example of poor content experience:
Bob Hoffman, the Ad Contrarian has highlighted this scandal as an industry commentator:
"This is the biggest advertising story of the decade, and it's being buried."
The retired CEO and chairman of Hoffman/Lewis Advertising, spoke in June 2013 of a $7.5 billion scandal that has been developing under the digital radar in the advertising world for the past few years. The three main allegations, according to those who are making them:
- Half or more of the paid online display advertisements that ad networks, media buyers, and ad agencies have knowingly been selling to clients over the years have never appeared in front of live human beings.
- Agencies have been receiving kickbacks and indirect payments from ad networks under the guise of "volume discounts" for serving as the middlemen between the networks and the clients who were knowingly sold the fraudulent ad impressions.
- Ad networks knowingly sell bot traffic to publishers and publishers knowingly buy the bot traffic because the resulting ad impressions earn both of them money—at the expense of the clients who are paying for the impressions.
The Rise of Ad Blocking
All of these issues were always a problem for individual advertisers and agencies, but in many cases they were happy to maintain the facade as long as everyone was getting paid. However, it’s not just affecting a minority of advertisers any more. Ad networks have created ad formats which are so intrusive and horrible, publishers have rebuilt their business models to chase as many clicks and impressions as possible to the detriment of their editorial, and advertisers have continued blindly spending increasing amounts of money because ‘online is where the audience is’. The problem with that, is that they’ve alienated their target audience so much that now 26% of global internet users use a browser based ad blocker [Source: BuzzCity, October 2015], and ad blocking is forecast to cost the Global economy $41bn next year [Source: PageFair, August 2015].
Let’s think about that for a second. Brands have spent cumulative $billions trying to showcase how brilliant and desirable their products are, and how they will benefit their audiences' lives. They’ve instructed the brightest and most creative minds on the planet to come up with compelling, glamorous and funny ads, and they’ve done it so badly, so intrusively, so misguidedly, that a quarter of the global internet population have actively sought out a solution to rid them of this troublesome irritation. In other industries – (Healthcare? Accountancy? Law?) if the expensively acquired service had done the opposite of the desired action and wasted the client’s retainer, big firms that participated in the charade would be losing clients and going bust left, right and centre wouldn’t they? So why does the digital advertising media industry thrive?
We can’t answer that, but what we can do is take a look at some of the ways that brands can create compelling, engaging, digital advertising which works. It means being slightly less reliant on big meaningless numbers, and potentially looking for smaller, but meaningful numbers, and it involves looking at display as part of the wider online and even offline media mix, but there are 5 broad (we could probably turn them into something like ‘46 ways you’ll win at advertising in 2016’ Buzzfeed style blog if anyone’s interested) themes which we think have been forgotten as clients and publishers prostrated themselves on the altar of never ending online ad impressions.
Up Next – How to fix it...