Ad blocking: The best thing that could have happened?

Alright, that’s an intentionally provocative headline, so let’s get the caveats and disclaimers out of the way, right up front. Revenue loss for any business, whether directly or indirectly from ad blocking is not a jovial topic, Juniper estimates a US$27 billion cost to the industry by 2020[i]—there are real world implications, people and jobs at the receiving end.  

Ad blocking is just one visible accelerant to a greater transformation that is underway; consumers are actively creating and passively shaping their personal [digital] bubbles, in which they engage (or not) with content and interact with like-minded people. Facebook, YouTube, Weibo, Youku, WeChat... all shape these bubbles through each interaction; edging consumers closer to an algorithm-of-one, in which an organisation's value, must literally add up in order to be seen.

For organisations, this is an issue. They are finding it increasingly challenging to drive efficiencies at the top of the funnel, even as they move more and more spend into digital.

Damage control, or wake-up call?

It’s estimated that anywhere between 22 and 36 percent[ii] of consumers in Asia use ad-blockers in some shape or form, if not higher (given the difficulty in measuring inherently stealthy technology). And where I sit, here in Asia, we have two of the world’s largest populations (China and India); so as a quantity, that’s a colossal number of people; 319 million, all in[iii] —an America sized population that have unequivocally said no to ads.

Moreover, Asia leads the rest of the world in mobile ad blocking—both in app and mobile browsing, growing 90percent[iv] in 2015 alone. This is no surprise given 55 percent of the world's smartphone users are here[v]; in those ever-so lucrative gen-z and millennial markets we all chase; the majority of whom use their mobile as their primary device for internet access.

This is no conspiracy—the evidence is clear; empowered, connected consumers have voted ‘no’ with their thumbs. They’re simply not satisfied with the experience.

It certainly sounds like an exaggerated claim, but if you run even the most conservative numbers, it’s a probable reality that the next billion internet users could be invisible to marketers.

How is the landscape transforming?

1. Exploration into unchartered territories

The “squeeze” brought about by consumers has spurred on publishers, platform owners and brands to find new spaces and models to reach the consumer:

Built into products: Amazon Kindle overtly puts price on your attention, giving consumers the choice of an ad-free device at a $20 premium; based on reviews, we suspect most choose the device with ads, largely because they are served unobtrusively.

Ads for paid features: Spotify reduces consumer interruption by running a single immersive video ad (with a feedback option) in return for 30 minutes of uninterrupted listening; a typically paid feature.

Unobtrusive formats:

i. Facebook’s business model is more reliant on advertising revenue than most. It recognised the way ads are served creates lag and increases data use (the latter being a main barrier for consumers in Southeast Asia). In response, Facebook created ‘canvas’, an instantly loading, mobile first, immersive space for advertorial-esque content that overcame these pain points for consumers.

ii. New formats, such as ‘scroller’ ads, have been designed with the IAB with a mandate “that won't push more consumers into the arms of ad blockers”—their words. These are mobile ads that appear as a full-screen window onto a creative execution as consumers scroll down a web page. Because consumers can simply scroll past them, the ads are non-invasive and have high acceptance; 45 percent compared with 32 percent for conventional banners[vi].

2. Redressing the value exchange

Perhaps the most important transformation of all (and the happy ending to this story). Historically, ads have been injected, often invasively, into a consumer’s journey’s, asking much more of the consumer than was given back. Blocking has made marketers redress that value exchange, to level it in the favour of the consumer:

Preference solicitation: Consumer platforms, including YouTube and Facebook are now overtly soliciting for content and advertisement preferences, above and beyond what they organically learn about consumers from behaviour. This is a two-fold strategy. They want consumers to know that they are overtly responding to preferences and putting control of the experience back in the hands of the consumer.

Blockers as guardians: Some brands are working with ad blockers, not fighting them; whitelisting content based on preferences drawn direct from consumers. While some blockers business models rely more on ‘ransom’ than ‘collaboration’, a number are taking the moral high ground and are behaving like consumer guardians.

Block the blocker: Brands are creating subscription-like plans to block consumers from viewing certain content, and reveal more content when ad blockers are disabled, often with an appeal that explains their reliance on an ad business model. Forbes and 4OD TV do this well.  Washington Post has creatively turned this into an opportunity to capture consumer’s data in return for unblocking content.

Pay for ad-free experiences: A build from the above, which a number of brands / platforms are offering, at a low fee (usually, a few dollars). YouTube Red in the US is an example of a new business model to this effect.

Contextual advertising adoption: Part of redressing the value exchange back in the favour of the consumer means placing ads that are sympathetic to their surroundings and within context, ensuring they appear alongside relevant articles, searches or are geo-targeted to be valuable in the customer’s journey.

Native advertising shift: Probably the most important shift of all. What most would traditionally coin as content marketing. As consumers shy away from interruption, they continue to engage with authentic content, be this in the form of editorials that have a product or service woven into the narrative, or even well-created advertorial content. Simply turn to the likes of uncrate.com, highsnobiety and netaporter (and many more), which have refined this content, building large, actively engaged audiences that regularly return for more. In fact consumers engage 25 percent more with this type of content[vii], and this has only led to richer content and brand collaborations that seek to create a new value for the consumer.

3. Technology for good

Early technological advancements in the ad-serving space were initially about programmatically placing ads in as many places as possible to attain the highest reach, at the lowest cost, as efficiently as possible, thus reducing marketing resource burden. However, this has now turned to focus on quality of engagement. Efficacy, and language such as engagement rate and quality of reach have become part of the new lexicon. This is also echoed in the way platforms such as Google have altered and optimised their algorithms for readability, mobile friendliness, page speed (proven to have impact on the bottom line) and most notably ‘usefulness of content relevant to the user's search’.

So, why is this the best thing to happen to advertising?

Ad blocking, for the most part, has become a wake-up call that’s accelerated transformation of advertising in the digital landscape—and it’s awesome; putting the consumer squarely back at the centre of the strategy.

A code arms race to unblock the blockers isn’t the future; intimately understanding the consumer and engaging in a way that delivers value, is. More so, for those who have yet to opt out.  

So, what are the key questions organisations should be asking?

Challenge (frequently), the answers to these questions:

• Do we understand our consumers intimately enough and what will matter most to them in their journey?
• Do we have a clearly defined value exchange that is relevant to our customer?
• Have we developed a customer experience that transcends the full funnel?
• Are we investing proportionately and in the right places to reach and engage?
• Are we building collaborations and partnerships that create new value opportunities?
• Are we creating favourable business outcomes with our marketing spend?

Final advice: Be in the business of creating content that engages humans, not ads that interrupt.

Christopher Brewer is vice president at OgilvyRED Asia Pacific