Lead Times and Price Increases

It is worth noting that often ad blocking software prevents the user’s browser from actually requesting the ad, so if an ad is blocked, it won’t normally cost the advertiser valuable impressions. This provides some relief for those worried about the effect that ad blocking is having on ROI. The bad news, however, is that if ad impressions are becoming harder to generate, campaigns will likely take longer to fulfil. Combine this with the inevitable cost increase, as saleable inventory levels drop, we are likely to see an overall price increase.

Publishers will look for new strategies

For many publishers, advertising is their primary source of revenue. If they are getting a smaller number of saleable impressions and clicks from their adverts, they will be forced to make changes. As advertising becomes less lucrative, publishers are starting to utilise paywalls on their content. Currently, there appears to be a lack of interest in paying for news content among internet users, as the Reuters Institute Digital News Report claims that only 6% of its UK respondents say that they pay for online news. This could change if more publishers begin to offer subscriptions without advertisements or general availability of news (or other content) is reduced.

In an attempt to convince users to turn off their ad blockers, some publishers such as the Guardian will serve friendly messages reminding them that advertising revenue pays for the content they are accessing. Other publishers, such as Forbes and Condé Nast, have resorted to preventing website users from viewing any content if they detect that ad blocking software is being used. This is potentially a risky move, which could result in smaller audiences, but the reality is that publishers need to be able to monetise their content - through ads or subs.

For smaller publishers, finding the resources to compete with ad blockers may be impossible. If a significant number of small publishers can no longer live off their advertising revenue, we could begin to see consolidation across the publishing and media industry. If the digital advertising market becomes dominated by fewer, larger media owners, it could lead to price rises due to lack of competition.

Of course, whatever the culprit, if display advertising becomes more expensive, other forms of marketing gain market share - one trend in digital marketing that has appeared to coincide with the growth of ad blocking is native content. For the uninitiated, an example of this is Buzzfeed’s sponsored articles - content which is created by, or in partnership with, the publisher’s team which appear amongst regular videos and articles. This type of content is much harder to block as it is simply another page on the website - done well, it can be as entertaining or educational as the standard content.

Ads will need to change

Many factors have contributed to the growth of ad blockers, but it’s fair to say that intrusive creative and data-sucking ads that eat mobile data plans are chief among them. If ads are to survive, there needs to be a sea change. Advertisers need to show more respect for consumers, target carefully and create compelling, contextual content.

Of course, the interests of the advertisers and the media owners align in this respect. It’s in both of their interests for advertising to perform well. To address this, a Goldman Sachs report suggests that Google could soon start to force advertisers to up their game:

Google operates the largest ad exchange and ad server, and could become significantly more selective not only on ad types, but formats permitted, eliminating those with large file sizes, even publisher standards on page load times. This could be a catalyst for publishers to streamline the number of third party scripts and tags embedded in the site and accelerate the shift to higher quality ad formats.

By forcing advertisers to improve their creative, consumers are less likely to block ads, which in turn, will protect Google’s core business.

In summary

Ad blocking technology is still serving as a catalyst for change in advertising and media. The landscape will continue to evolve and changes will continue to affect advertisers and media owners alike. Even if the growth of ad blocking has passed it’s peak, successful marketers will be prepared to adapt their campaigns, improve their creative and diversify their digital marketing.