Ad Blocking Wars

Philip Gamble discusses the rise of user ad blocking.

Despite years of inflation-beating growth in UK digital ad spend, which now sits at £7.2bn after another impressive jump up from £6.3bn the previous year, our industry is under attack from a very real and growing threat.

The threat, which many see as a result of our own complacency and disregard for the very consumers we’re all trying to target, is the rise in users blocking ads. Now a major debate at many leading digital conferences, the rise of more savvy surfers has led to an ever-growing increase in the number of web users wishing to avoid advertisements online through user browser plugins specifically designed to filter out advertisements from consumed content.

With latest news also indicating that the increasing use of ad blocking could cost as much as $12bn in digital advertising revenue in the US alone by 2020, and the threat becomes even more real.

How widespread is the use of ad blockers?

The actual number of users who are choosing to opt out varies and, interestingly, the proliferation of ad blockers among internet users also varies considerably by sector. Yet publishers, networks and industry bodies all appear to agree that usage is increasing – and rapidly. In the UK, the IAB’s latest research shows that 22% of British adults currently use an ad-blocking solution, up from 18% just four months earlier.

However, according to PageFair, one of the growing number of platforms that provide a way for publishers to fight back, the number looks far worse. The ad network believes UK ad blocking grew 82% to reach 12 million active users in the year to June 2015.

Mobile hope?

With mobile now accounting for more than 50% of all online activity, any publisher hopes of this continuing shift offering a way to recoup revenue from users with desktop blockers are now fast evaporating.

Ad blocking on mobile grew significantly when, in September last year, Apple released iOS 9 which for the first time enabled Safari content blocking apps to enter its App Store. In less than one day, ad blocking apps had shot up the app charts and penetration rates are approaching those on desktop.

If that wasn’t enough, things could be getting worse following mobile network Three’s announcement in February that it planned to roll out a solution that could block 95% of banner and pop-up ads served to its 8.8million subscribers. Citing concerns over consumer experience, privacy and increased data charges, the announcement caused a wave of unease across the whole ad space.

Here to stay?

Perhaps even more alarming for those relying on an ad-funded model are that the numbers suggest rates of ad blocking are biggest among the young and those in emerging markets; providing us with the foundations for a whole new generation of internet users who expect the web to be ad free!

Looking overseas, you can already see the likely impact. In Asia alone, UC Browser, the number one browser in most Asian markets and owned by ecommerce giant Alibaba, has a 51% market share in India, ads are blocked as standard.

Why are users blocking ads?

Blocking ads is not new. Users have opted to improve their browsing experience by restricting the intrusion of online advertisements for years with pop-ups and pop-unders being one of the bug-bears of the internet in the late 1990s. By the early 2000s, the most popular browsers even came with built-in pop-up blocking as standard and the medium virtually died out.

However, over the years that followed, the rise of ads running alongside content and even pre-roll video ads on sites such as YouTube have proved disruptive to users’ online experience. So much so that the IAB report also cites an interrupted experience as the top reason people chose to block ads.

As a result, and as now discovered by the millions ‘switching off’, it’s much easier to install an ad-blocking plugin and leave the default settings rather than configure the options to block just the most irritating ads. Sadly, the smaller publishers who rely on less-intrusive banners are the ones being caught out in the crossfire here the most.

How are publishers dealing with the threat?

Apart from the two most obvious approaches of “they aren’t” and making their ads “acceptable”, publishers are busy trying to find different methods to combat ad blocking users.

Adblock blockers

Business news stalwart Forbes says 13% of its visitors have installed an ad blocking solution. Since mid-December 2015, the site has blocked “a small percentage of those with ad blockers” from accessing its content. A nag screen on its experience-interrupting splash screen demands that users switch off their ad blocker to access the site in exchange for 30 days of “less intrusive” advertising.

As a result, 42% of users did disable when asked, enabling Forbes to serve an additional 15million impressions that would otherwise have been blocked.

Likewise, Channel 4’s live streaming and video on demand services make use of pre- and in-video advertisements as well as surrounding banners and block users of adblock software from playing videos. In fact, the number of sites employing similar solutions has increased significantly since late 2015 with news publisher sites such as CityAM also employing such measures. Whatever your thoughts on ad blocking, this surely counts as cloaking whereby different content or URLs is presented to human users and search engines and should be penalised?

Circumnavigating the ad blocking filters

With consumer use of Adblock followed by publisher use of Adblock Blocker technology, it was surely only a matter of time before an anti-Adblock killer inevitably appeared on the scene and this cat and mouse game is perhaps best seen with the EasyList community which provides a list of ad-blocking filters which users can subscribe to ensuring they block the most recent ads.

See you in court

German publisher Axel Springer took the makers of Adblock Plus, Eyeo, to court claiming that the software “breached laws on competition, copyright or market dominance”. They lost.

Nudging user behaviour

Others take a more softly-softly approach with messages informing users that their use of ad-blocking technology is preventing the site from monetising its content. The Guardian suggests “perhaps you’ll support us another way?” to browsers who aren’t seeing ads, pushing their paid-for supporter membership.

New products

Although the Android and iOS app stores allow apps that enable in-browser ad blocking, both are anti those that target in-app ads, citing privacy concerns. So, for now at least, pushing users towards apps may offer a temporary reprieve at least.

The Paywall model is equally notoriously hard to work for general publishers when equivalent content is available elsewhere for free. However, some publishers have begun to offer an ad-free subscription model. For example, Google has launched YouTube Red. Currently only available in the US, this offers ad-free browsing of videos plus some additional features for $10 a month.

What’s the likely fall-out?

In line with a major move across the entire industry to provide more meaningful and targeted brand interaction, we’re already seeing advertisers and publishers responding with new formats that provide the personalised experiences users are increasingly craving.

However, as consumers continue to ‘switch off’ what they see as intrusive advertising, publishers will continue to lose out and we’ll see more and more journalism and content going behind the pay-wall. The only long-term winners in all this, it appears, are the publishers of ad blocking software.