Germany is an important market for ad blocking because their use of the technology is believed to be relatively high. Many online publishers and marketing executives look at Germany as an indicator of how ad blocking adoption could spread in the U.S.
According to PageFair, which sells technology to help publishers combat the effects of ad blocking, 25% of internet users in Germany used ad blockers in 2015, compared with 15% of users in the U.S.
The declines could also suggest that publishers’ anti-ad-blocking initiatives are having an impact. Multiple publishers in Germany and around the world have begun asking users to disable ad blockers when visiting their sites, and some websites have even refused access to users who have ad blockers switched on.
The guidelines do not restrict consumers independently choosing to download ad-blocking apps from the App Store, but carriers themselves will not be able to introduce network-level ad blocking.
We interviewed Jasper Snyder, EVP, Research & Innovation: Cross-Platform, from The ARF who provided his perspective on Ad Blocking/Fraud and the key takeaways from 8 of those AM sessions with industry leaders.
What were some of the highlights for you of all of the discussions and presentations on these areas?
There were lots! Ted McConnell (Rocket Fuel) was fascinating in how he talked about recognition of the problems here. He’d figured out that ad fraud, in terms of size, is basically the equivalent of there being 5,000 bank robberies per day. Ted also spoke about our mindset regarding fraud, making the point that we have to focus less on combating fraud per se than about combating its effects, namely by developing an immune system. “I don’t care how many fraudsters are out there, because if I can see them, discount them, and not pay them, they don’t matter,” Ted said. This is particularly important given how quickly the “bad guys” can react – if there were a solution outlined on the stage at AM, by the very next day the fraudsters would have figured out how to defeat it.
A compelling ad experience could stop users adopting ad blockers; however, users have many more reasons for screening out ads. Mostly users find ads intrusive, and since the launch of ad blocking software on mobile devices, they are able to spend more of their online time in an ad-free environment.
As more users are adopting adblockers every year, the industry has been slow to react. Subscription services like YouTube Red, and premium/freemium models like Spotify, highlight the drive to respond to user demands for an ad-free experience. The issue with these services is that paying for them has to deliver a better UX than ad blockers, which are most often free. This is perhaps the most significant challenge marketers have to face this year: convincing users to pay to avoid ads.
Ad fraud on mobile devices has been less frequent than on desktop PCs, mainly because there is less money invested into mobile ads at this time, i.e. of the $60 billion spent on internet ads in the US in 2015, only $21 billion was spent on mobile, according to PwC. This lower levels of mobile ad spending translates into slimmer revenue opportunities for mobile ad fraudsters.
However, this will change in the coming years, as more money piles into mobile ads.
A corollary effect of malware and ad fraud is that it also encourages ad blocking adoption. Over 40% of consumers stated that they use ad blockers to protect themselves against malware and viruses, according to a recent survey by Optimal.com and Wells Fargo. Mobile ad-blocking usage is high and growing fast: over 419 million people worldwide according to a study by PageFair.
Consumer use of online ad-blocking tools continues to grow. As a result, publishers and media companies have “lost” literally billions of potential dollars.
Now, media sellers are experimenting with ways to limit the impact of ad-blocking on their businesses. Technology companies have been creating new software designed to counteract the effects of ad-blocking.
Some products help websites show ads to users with ad-blockers in ways that are undetectable to most ad-blocking software. This tactic is referred to as “ad reinsertion,” because it helps reinsert ads into web pages that otherwise would not have been displayed.
For Forbes Media CRO ad blocking is more than a nuisance. It is an “industry-wide issue” that represents an “existential threat” to publishers — and calls for drastic action. “We as an industry have to get our heads around the advertising experience and concerns over privacy that have led the early-adopters to deploy ad blockers.”
But just cutting back on intrusive ads isn’t possible. He added, “We know that in order to connect to that audience we need to create unique experiences.”
Publishers are losing out on ad revenue due to the rise in ad blocking. According to comScore, 16.5 percent of users aged 18 to 24 are employing an ad blocker. Other studies found that 26 percent of time spent watching video on desktops in the U.S. was not monetized due to ad blockers.
GroupM, the media-buying giant, is closing off a growing alternative for publishers beset by ad blocking, called “ad reinsertion.” That method enables publishers to deliver ads to users who have ad blockers installed.
But GroupM isn’t buying it. “It’s addressing the symptom, not the cause,” said Chairman Montgomery. “Let’s fix the user experience first and then we can engage with consumers and tell them that … we made the experience as light as possible…”