Ad blocking is now a chronic but manageable condition
Ad blocking, which was once treated as a mortal threat to publishers, has now become a chronic condition: They might die with it, but they’re more likely to have been killed by other causes.
The good news: ad blocking rates appear to have flattened — and crucially haven’t yet made the leap to mobile, where most traffic growth is happening. Still, publishers are not exactly in the mood for popping corks of champagne. Besides being beset by a host of challenges– the rise of the Google-Facebook duopoly to an over-dependence on platforms to a depressed digital ad market — ad blocking is still seen as a menace.
“I’d say ad blocking is still in the top three priorities for most publishers,” said John Barnes, chief digital officer at Incisive Media. “Whether they are B2B, paid or open access, everyone needs to have a revenue model that includes some advertising.”
Incisive Media has reduced ad blockers from 25 percent to 9 percent on its tech title, The Inquirer, by restricting content for those with blockers installed. Now the ad blocking rate has leveled off. It’s a similar story for other publishers taking a muscular approach, as they, too, for the most part are no longer seeing a growth in ad blocking. One reason for the dip is that readers are shifting to mobile, where installing ad blockers through web browsers is more complicated. And, importantly, up to 90 percent of time on mobile is spent in apps, where ads can’t easily be blocked yet.
Eighteen months ago, the furor around ad blocking was at its peak, with hyperbolic headlines predicting the ad blockalypse. Much of the drama was made by companies looking to benefit from high ad block rates and perpetuated by publishers and the ad industry responding to aggressive language.
“The industry response was to use words like ‘hijacking’ and ‘ransom,’” said Bethan Crockett, digital risk director at GroupM. “That language has now gone. The reaction was of shock and the industry thinking it’s been on the wrong foot. Now the industry is accepting and reflecting that it needs to change.”
The last two studies from the IAB put the number of people using ad blockers at around 21 percent, and it’s not expecting the latest figures, released in two weeks, to show any significant increase. PageFair, which sells anti-ad blocking solutions to publishers, reported recently the U.K. has a 16 percent ad block penetration.
Even as the threat has decreased, publishers are still wary. A recent study by The Association of Online Publishers, which counts as members Bauer, Condé Nast, Dennis, ESI, The Guardian, Telegraph and Time Inc., reports that 69 percent of publishers said ad blocking was a concern, with 54 percent saying it impacts their business significantly. “Ad blocking is recognized as something that’s not going to go away,” said Richard Reeves, managing director at the AOP, adding that the organization is putting ad blocking, data concerns and viewability at the top of the pile to to tackle this year. “It’s not a short-term concern, it requires long-term, pragmatic solutions.”
One of the main threats is mobile: As consumption shifts to smaller screens, publishers fear more people will install blockers. PageFair’s report found a 30 percent increase in the number of ad blockers globally from 12 months ago, mostly driven by mobile in Asia. Partly this is due to Alibaba’s UC mobile web browser, which has ad block embedded in it. Network-level blocking in Europe is something that net-neutrality regulation should guard against.
“It has become a professional problem. It’s no longer as dramaticized as it has been in the last 18 months,” said Oliver von Wersch, Gruner + Jahr Digital’s managing director of growth projects and strategic partnerships. “Publishers no longer believe what companies like AdBlock Plus are telling them.”
Ad blocking was a top-three priority for von Wersch; now it’s one of 10 things on the list, alongside issues like viewability, ad fraud and transparency. German publishers may have more cause to be confident. Ad block rates are not increasing in Germany; they are stable or slightly decreasing. Mobile is less than 2 percent there and hasn’t increased for six months.
Publishers have been busy coming up with more sophisticated solutions. “Making black-and-white rules about ad blocking is not the best way to take advantage of swing back to trusted content,” said Incisive Media’s John Barnes. It’s the right time for publishers to take advantage of willingness to pay for content. “Across the board, subscriptions are on the rise; there’s lots of conversations about fake news and trusted content. The concept of funding is wide open.”
Elsewhere in Europe, the prospect is less rosy. French news site Le Monde is seeing a gradual increase in the number of pageviews blocked by ads, from 20 percent in September to 26 percent. This is because Le Monde is putting ad blocking on the back seat as resources are being funneled toward covering the French election.
“We don’t have the feeling its decreasing. We’re kind of afraid it will grow on mobile,” said Pierre Buffet, head of digital at Le Monde. “For the moment, we are blind on mobile. I don’t have reliable figures.”
Still, Le Monde’s main consideration is driving subscriptions. It has 200,000 paying readers, (130,000 are digital, a growth of 30 percent in the last 12 months). With subscription revenue catching up with ad revenue — currently it’s half and half — ad blocking and ad revenue have become more of a secondary concern.
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