Why All Your Display Advertising Metrics Are Probably Going To Zero – The Rise of Ad Blocking Technology

The Display Advertising Market

Spending on US political online display advertising[i] is estimated to top $1 billion in 2016.[ii] It’s a number so large, and growing so quickly, that comparisons with previous campaign cycles are almost meaningless.

But despite this growth there are enormous challenges in targeting, viewability and effectiveness.

A sample of the problems as of late 2014[iii]

  • 56% of ads counted as served were not actually seen by humans.
  • 19% of retargeted ads are chasing bots.
  • Digital advertisers will take in $6.3 billion for serving up ads to fraudulent sources

On the bright side, advertisers are claiming a host of new technologies will solve these problems and provide the Holy Grail of modern voter contact programs – a unified view of the voter’s online and offline behavior.

The Existential Threat

But a new wave of technologies, devoted to blocking display advertising from ever appearing in the browser, may drive display advertising effectiveness to near zero.

The basics of ad blocking software is simple enough. Usually, a 3rd party extension is loaded into a desktop or mobile browser. When a webpage’s HTML is received from the server, links to known ad servers are essentially striped out. The ad impression is never recorded as it is never requested. The user is offered the content without the ads – a true win-lose proposition.

Ad Blocking On The Desktop And Mobile

All major desktop operating systems / browsers (Windows / Mac / Linux), (Chrome / Internet Explorer / Safari) have free extensions to effectively block display advertising. The most popular are AdBlock and AdBlock Plus (products from different companies). It’s important to note that these are not complicated products. Building a new ad blocker can take as little as an hour of development time.[iv]

On the mobile front the launch of iOS 9 (September 9th 2015) allows developers to write ad blockers for iPhone and iPad for the first time. As we will see later, it’s a feature that users are deploying widely.

In fact, the only major platform that has no real ad blocking technology are Android mobile devices. Ad blockers were largely banned from the Google Play store March 13, 2013.[v] This comes as no surprise as nearly 90% of Google’s revenue comes from online advertising of one form or another.

The Trends and Numbers

PageFair estimates that 16% (45 million) of the US online population are blocking ads as of Q2 2015 – that’s a growth of 48% in just 12 months. Interestingly, it also claims the DC metro area has the lowest instance of ad blocking at just 8%.[vi]

Comscore, using a slightly different metric comes close to confirming those numbers. Its study claims that 12% of pages in the US are being modified with ad blockers.[vii]

Keep in mind these numbers are before ad blockers became available for iOS. As of October 4th 2015, Purify, an ad blocker, is the number three paid app in the iOS store. This is especially important since mobile advertising is growing rapidly while desktop advertising is stagnant at best.

Industry Response

To date there has been no concrete response by advertisers. The Internet Advertising Bureau [IAB – an industry trade group] convened three meetings in May, July & August 2015. Participant quotes identified two possible strategies – [viii]

  • “I advocated for the top 100 websites to, beginning on the same day, not let anybody with ad blockers turned on [to view their content],”
  • Ad blockers “are interfering with websites’ ability to display all the pixels that are part of that website, arguably there’s some sort of law that prohibits that”

A final 2015 meeting is scheduled for October 22nd.[ix]

Technology Responses

There are a small number of companies that are developing anti ad blocking technologies. They include PageFair, Secret Media, Sourcepoint and Yavli. Although their methods are not public, some seem to revolve around obscuring the ad links in the HTML code. This sort of approach is interesting but will no doubt generate a response from the ad blockers. Expect a cat a mouse game between the technologies for some time.

But in the end the standard image size of display ads are probably their Achilles heel. The ad blockers can always strip out images of those sizes regardless of server dealing a final and fatal blow to display advertising.

There’s also the option to develop ad blocking technology at the OS level where it would be invisible to the advertiser’s technologies. Some ISP’s as also experimenting with offering ad blocking.[x]

Adapting To A World Without Display Advertising

A declining reach for display advertising has some real, and profound, implications for campaigns and advocacy groups including –

  • New groups attempting to use the Internet to attract attention and begin building a house file.
  • Existing groups wanting to use the Internet to extend their house file.
  • All groups attempting to execute rapid response strategies.
  • All groups trying to target specific Internet users or users that fall into a specific psychographic class.

There will likely be no technical solution to overcome the loss of display advertising. Instead, these groups will need to both adopt new strategies and dust off some old ones including –

  • Creating earned media opportunities to get the word out on new groups and issues. This will mean more appearances on TV / cable / radio / newspapers / established websites sites and blogs with large followings.
  • Media training for the groups’ public faces as well as a concerted effort to court these outlets to gain coveted bookings.
  • Formal partnerships with these outlets which may have a cost to the groups. This can take many forms including native advertising that is barely discernable from the outlet’s own content.
  • Leveraging the social networks of existing supporters to spread the word virally. Remember that display advertising on social networks such as Facebook and Twitter are at as much risk from ad blocking technologies as mainstream display advertising.
  • The return of search engine optimization for all internet properties.

But all groups should understand that

  • As real voters opt out of receiving display advertising the percentage of ads being viewed by bots will increase.
  • Not just display ads will be blocked. Cookies and tracking scripts will also be blocked destroying the goal of a 360 view of the activist.
  • Cultural acceptance of ad blocking is only a matter of time. Just as anti-virus protection hit critical mass in the ‘90’s it will soon become ‘uncool’ to have ads loading on your device.
  • Smaller political and issues sites that rely on display advertising will go under or curtail operations unless they can tap other revenue sources.
  • As ad spending shrinks the vendors providing advertising services will contract. It will actually be easier to purchase display ads through a single vendor as the ads become less and less effective.
  • Other advanced advertising technologies that rely on display advertising such as geo fencing or retargeting will wither as well.
  • As more reliance is placed on non-internet publicity it will be increasingly difficult to source code voter’s actions on your internet properties. Clever use of branded URL shortners will be an important tool for maintaining what source coding can be done.

Resources

Who to follow

Internet Advertising Bureau – @IAB

PageFair – @PageFair

SourcePoint – @SourcePoint

#AdBlocking

What to Read

http://venturebeat.com/2015/09/17/the-writing-is-on-the-wall-for-the-ad-supported-web-its-over/

http://www.mondaynote.com/2015/08/31/life-after-content-blocking/

http://www.theverge.com/2015/9/17/9338963/welcome-to-hell-apple-vs-google-vs-facebook-and-the-slow-death-of-the-web

http://www.buzzfeed.com/alexkantrowitz/the-technology-solution-to-ad-blocking-nobodys-talking-about?utm_content=buffer9ff68&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#.thYpNKpJp

http://adage.com/article/digital/digicel-s-ad-blocking-move-means-adland/300739/

Notes

[i] The definition of display advertising varies somewhat between the different reports noted in this paper but generally includes banner ads and video display advertisements­.

[ii] http://www.wired.com/2015/08/digital-politcal-ads-2016/

[iii] http://www.adweek.com/news/technology/7-things-you-need-know-about-bots-are-threatening-ad-industry-161849

[iv] http://www.iprospect.com/en/us/insights/povs/content-blocking-functionality-ios9-pov/#download

[v] http://techcrunch.com/2013/03/13/google-pulls-ad-blocking-apps-from-play-store-for-violating-developer-distribution-agreement/

[vi] http://downloads.pagefair.com/reports/2015_report-the_cost_of_ad_blocking.pdf

[vii] http://sourcepoint.com/comscore-and-sourcepoint-the-state-of-ad-blocking/

[viii] http://adage.com/article/digital/iab-surveys-options-fight-ad-blockers-including-lawsuits/300228/

[ix] http://members.iab.net/eweb/DynamicPage.aspx?site=iab&WebCode=EvtProfile&Evt_key=32bf6ef3-745c-4599-bb77-6a40389318b3

[x] http://www.jamaicaobserver.com/business/Digicel-deploys-mobile-ad-blocking-technology-against-Google–Facebook_19231657