Without a doubt, the use of ad blocking software has transformed the digital media landscape and impacted publishers’ digital ad revenue. According to Business Insider, the industry has encountered a 30% increase in ad blocking usage from 2016 to 2017. PageFair reports that over 615 million devices and 11% of all internet users are using ad blockers to avoid digital advertising. And perhaps most staggering of all, the industry has seen a loss of over $15.8B in revenue in 2017 as a result (Media Post.).
What is ad blocking?
Ad blocking is technology that consumers use to prevent or block the display of digital advertising. This technology suppresses ads – think pop-ups, intrusive banner ads, and other forms of online advertising – and allows a user to visit websites without interruptions. The most common forms of ad blockers are browser extensions from the likes of Chrome, Safari, Firefox, and Internet Explorer.
Why are people against ads?
Over the past couple years, online advertising has exploded. Today’s digital ecosystem is full of ads, many of which interrupt the user experience, cause frustration, and slow down user devices. Not surprisingly, consumers have taken note of the shift – according to Vieo Design, 91% of people say ads are more intrusive today than 2–3 years ago, and 87% say there are more ads in general than 2–3 years ago. But there’s a critical distinction to be made here: not all ads are disliked. According to the same study, 83% of people agree with the statement “not all ads are bad, but I want to filter out the really obnoxious ones.”
Who primarily uses ad blockers?
Ad blocking is most common among millennials: two-thirds have installed an ad blocker on either their mobile or desktop device (eMarketer). It’s no coincidence that this same generation grew up with instant internet access and the expectation that they can use it to answer any question in their exact moment of need. This also means they expect quality content, and they expect to be able to access it immediately, effortlessly, and for free. But, because their media consumption habits are so different than those of previous generations, they are likely unaware of the longstanding mutual agreement between publishers and consumers – for consumers to receive content, someone has to pay for it. And that means publishers need to run ads. So, when they encounter an ad that interrupts their online experience, they are quick to remove that experience and install blockers.
Ad blocking is not a new trend.
The advertising industry has been experiencing this threat for many years; however, until now, usage has never been high enough to influence advertisers’ strategy. Time will tell whether this trend leaves a lasting effect on the industry: will ad blocking become the norm for millennials? Will other generations adopt the same behavior? Or will it all just blow over? Still, these questions have publishers taking notice, adjusting their strategies to address ad blockers and planning for an alternative future.
new innovative ways publishers are generating ad revenue
1. Start Creating and Promoting Products
Instead of selling ad space to advertisers to push their products, publishers become their own advertiser, creating and selling products on their own sites. Few publishers have been willing to take this leap, but it can be extremely lucrative and open up another large revenue stream by blending media and commerce. A great example of this is Thrillist. Knowing a large portion of its audience is millennial men, Thrillist developed its own men’s clothing line, Jack Threads. Following success with this model, they launched their own hot sauce – 1032 K.
2. Productizing Original Video Content
Publishers of all sizes create and deploy massive amounts of video content that is currently packaged as pre-roll, mid-roll, and post-roll. Even though users are familiar with this tactic, it still interrupts their experience. Productizing video allows a publisher to engage with a user in a new and innovative way – by giving users the ability to interact with the video, they can choose which products he or she may like and save them in a cart to reference at a later time. This model would be sold on a cost-per-product choosing model, or as a sponsorship if the video is only showcasing one brand or product. Below is an example of how this can be done.
3. Using Affiliate Marketing
Affiliate marketing is another option for publishers trying to increase their revenue without covering their website with ads. Affiliate marketing allows publishers to reach consumers easily and in a non-intrusive way by showcasing a product link within their website. When a consumer clicks through on the product link and makes a purchase, the publisher gets a commission. This works best for established publishers who have already built audience loyalty and search engine credibility. It’s also really effective when they have a lot of content around categories that generate engagement and influence purchases such as sports/fitness, fashion, furniture, and health.
Wirecutter.com is a great example of this approach – the site does not run any traditional ads and was acquired by the New York Times for $30B.
Ad blockers will fundamentally change the way readers and publishers approach digital advertising. Based on the increase in both usage and continued millennial adoption, we expect to see a rise in the use of ad blockers in the near future.
For publishers this means it’s time to decide how they want to combat these issues, but there’s no one-size-fits-all approach. They can try circumventing ad blocking by offering their readers a better ad experience, or by adopting new and innovative strategies. No matter which option they chose, one thing remains certain: if publishers want to be successful in 2020 and beyond, they will have to strategically think through how they monetize their site and interact with their audiences, and continue to look for ways to adapt their strategies.
For marketers, this means the amount of digital advertising options will continue to grow, giving us more options to choose from when trying to find the right solution to drive the best performance. This also means that traditional approaches that once provided strong performance may no longer work. So, like publishers, marketers must continue to look to new and innovative ways to drive success.
PHOTO SOURCE: Pexels, Brand Channel