Why the advertising industry needs to embrace AdBlock

I am now part of the problem. The advertising industry is wringing its hands and shaking its fist at the use and growth of ad-block technology, but I am not above temptation. I simply installed it. And much like the many million people who have done so already, I love it and probably won’t ever fully abandon it.

So instead of excoriating people for using them, it’s time we reflect on how we got here, what its inevitability means for our future and whether this might even be a trend worth embracing.

The most commonly cited statistic on ad blocking reports that roughly 200 million people worldwide installed ad blocking on their computers as of August 2015. That group is rapidly growing:

• Mary Meeker’s 2016 Internet Trends Report shows an upward accelerating trend in ad-block adoption across desktop and mobile worldwide.
• HubSpot’s Global Interruptive Ads Survey (Q4 2015 to Q1 2016) found 50 percent of respondents already had installed AdBlock, and more than 60 percent of adults 18-35 expect to by Q3 2016, with respondents 35+ not that far behind.
• PageFair and Adobe report a growth of almost 50 percent in the usage of ad blockers in the U.S. from Q2 2014-Q2 2015.
• The recent IAB report on ad blocking found 26 percent of desktop users block ads online.

Cumulatively, these reports indicate that the number of individuals using ad blockers will have doubled many more times over within the coming year or two. And their impact is real. Ovum and The Wall Street Journal report that in 2015 alone, publishers lost $24 billion dollars in ad revenue because of ad blockers.

Ad-block technology stops almost all ads a person might otherwise see. Search ads, banner ads, remarketing, pre-roll, YouTube ads, social posts and even some “native” ads are all covered. When loading a page, AdBlock looks at from where content is being called and uses that information to infer what is or is not an ad. On computers, AdBlock typically comes as a plugin to install in a browser. On mobile, it takes the form of browsers or browser settings that do the same. It’s easy and relatively tinker-proof. With one or two clicks, an ad-free internet is at the fingertips of anyone.

In response, some websites now have AdBlock walls. Upon arrival, AdBlock users are requested to enable ads by putting the site on a whitelist. Users are often amenable; the Times reported that more than 40 percent of users agreed to whitelist the site when provided with a message about the need to pay for high-quality content.

However, the bulk of internet publishers, along with the bulk of online ad inventory they represent, have not pursued similar measures: perhaps because they (rightly) assume that click-bait headlines and repurposed content aren’t reason enough to get users to turn off their ad blockers. Their objective is traffic, and lots of it. Meanwhile, premier content publishers are beginning to understand how much their core audience dislike their many ads and now even offer products that obviate the need for AdBlock in the first place. Publishers like the NYT and even YouTube now hawk ad-free supra-subscriptions for their most dedicated and ad-weary audience members.

Fundamentally though, everyone understands that a world with no ads online is an untenable one. AdBlock Plus found that 75 percent of their users supported sites having ads, so long as they weren’t too many and weren’t aggressively disruptive. In response, AdBlock Plus developed the Acceptable Ads Manifesto, outlining a series of rules for ads on sites, most all of which follow common sense. If a site agrees to meet these standards, AdBlock Plus will not block their ads.

Moreover, much like the Times’ experiment, the latest IAB/YouGov study on ad blocking in the U.K. finds half of all users willing to disable blockers in exchange for content. The IAB U.S. survey found that most users are blocking ads for specific reasons — reasons that can be addressed. People understand the value of ads in supporting content; it’s just that now they are demanding better accountability from the system.

For publishers who sign on and are part of this advertising future, it means significantly fewer digital ads. It means higher premiums on banner ads, pre-roll ads and the like, and, quite possibly, an end to the cost savings previous models of digital advertising offered. It will mean that running a series of banner ads will not a campaign make. Challenged by the fact that the cheap replication of a print-style advertising model no longer is profitable, more publishers will have to look to more innovative ways to incorporate their commerce with their content.

This is a position that the entire advertising industry needs to move to embrace. The honest truth is that the prevailing model of digital advertising, of ubiquitous cheap ads, is a broken one. The incentives in this model have encouraged the worst behavior: publishers squeezing more and more ads into a cluttered space and marketers pointing to these masses of impressions and clicks as the sign of a job well done. Ads that aren’t viewable, bot-generated clicks, phantom ads across the internet, video ads that aren’t seen or heard or both: These are all symptoms of a business model that rewards quantity over quality.

Worse yet, the common model of digital attribution compounds the same tension. Standard practice attributes on-site success to the final ad clicked or final ad seen, rewarding mass amounts of bottom-of-the-funnel advertising. Whoever is responsible for that last ad takes full credit for that consumer’s decision to convert. Again, incentives in this model encourage the worst behavior: publishers flooding consumers with cheap ads to claim credit and marketers pointing to the cost-efficiencies of the same ads as the sign of a job well done.

Successful marketing is nothing if not pragmatic. So long as this is the nature of success, it’s unsurprising that all parties pursue the same end game. Admittedly, some of this is beyond the industry’s control; unlike other mediums, there’s no body that can similarly regulate the nature of all digital ads and their quantities.

So long as the model of digital advertising is about quantity, impression counts and video views, and so long as the medium of digital advertising involves barraging users with thousands upon thousands of ads per day, it is the correct and right strategy to get as many ads out as possible to get the most chances of success. When these are the rules, the winning strategy will be a simple numbers game.

However, widespread adoption of ad-blocking technology upends this model and gives everyone a chance to slay digital advertising’s Ouroboros. Publishers either must have such high-quality content that users will agree to let them show their ads, or, if their content is not sufficiently compelling, have to abide by a model that puts a real cap on the number of ads they can deliver. Fail to do either, and none of the ads are seen.

This immediately helps combat a number of the inventory issues digital advertising faces. Phantom ads and viewability are less likely to be concerns when the ad ecosystem supports a much smaller set of permissible ads. The better the publisher, the larger the premium offered by digital advertising for their content. And with fewer chances to show an ad, the quality of those ads must go up. Advertisers will need to develop higher-quality ads and will have the budget to support it given the cost of the medium. And consumers get higher-quality ads while also avoiding the barrage of bargain-quality banners they hate so much.

This demands more of our industry, not the simple escalation of an arms race. Any advance in our technology to force ads upon users will be met with an equal development to block them. At this point it’s wholly Newtonian. Facebook’s recent announcement, followed by the immediate update to AdBlock Plus, is instructive. The sad truth is that Facebook’s own announcement acknowledged that the issue consumers had was not with all ads, but with how many currently live in our marketplace.

Instead of language chastising consumers for their selfishness, instead of spurious accusations of secret profit behind ad-block technologies, the advertising industry needs to recognize that it has built no good will, that its failure to stop and active decision to escalate this problem is the direct cause of consumers’ actions.

Far too often the incentives of digital advertising allow the industry to revert to a simple formula, and the consequence has been more ads, more often, to more irritated consumers. Yet we didn’t change course. People want services and people understand the importance of ad support. They just want better ads. Now people have a tool powerful enough to hold the industry accountable, and their voices are finally being heard.

The shame is that for an industry that prides itself on understanding consumers, it has taken us this long to listen to them.