Don’t forget about ad blocking: Lost revenue to UK publishers rises to £630,000 a year

The General Data Protection Regulation may have usurped the threat of ad blocking in alarming media headlines lately, but U.K. publisher data shows the dent on revenue due to ad blocking is growing.

While the rate of ad blocking has remained nearly flat on desktop, with a small increase in mobile, the revenue loss has grown partly due to publishers growing their audiences and adding more ad inventory.

U.K. publisher trade body the Association for Online Publishers, which counts members including Condé Nast, ESI Media, Global, the Guardian and The Telegraph, aggregated data from 14 of its members and found that at the end of 2017, 29.9 percent of ad impressions on desktop were blocked compared to 31.7 percent at its height in mid-2016. For mobile, 1.3 percent of impressions were blocked at the end of 2017 compared to 0.7 percent in mid-2016.

But the good news stops there. Across 14 members, the AOP calculated nearly £14 million ($18.6 million) in revenue was lost due to blocked ad impressions in 12 months. In 2016 this was £10.8 million ($14.4 million). The trade body estimated that the average publisher loses roughly £630,000 ($837,000) in annual revenue.

“Ad blocking hasn’t vanished. It’s still a threat that can’t be forgotten. Publishers still need to find a route forward,” said Nick Flood, deputy managing director of digital at Dennis Publishing. “GDPR has taken over, but publishers still need to understand how to message and then monetize users.”

Across Dennis Publishing’s portfolio, the ad-blocking rate has remained consistent at around 23 percent. On mobile, though, ad-block rates have increased from 2 percent to 4 percent over the last 12 months, which is worrying as the majority of traffic comes from mobile, so the fear is this rate could increase. Mobile ad-blocking rates have grown slower than expected, despite numerous ways of blocking ads on mobile. The number of blocked impressions is lower proportionally on the smaller screen because there are far fewer than on desktop. As desktop fetches higher ad rates for now, publishers are focusing on reducing this number.

On Dennis’ technology site, Alphr, Dennis has reduced ad-block rates from 30 percent to 19 percent by blocking content to ad-block users, then asking them to whitelist the site. Previously, ad-block users could continue to access the site. Beyond just being able to monetize this audience, publishers can gather analytics to understand and retarget users.

Despite publishers’ best efforts over the last 24 months to curb ad-block rates, publishers working out their messaging to audiences for gaining consent under GDPR can also educate them about the value exchange in blocking ads.

“We should remind ourselves this is a further opportunity to explain that in the most extreme cases, ad blocking undermines the ability to create content that’s available for free,” said Richard Reeves, managing director at the AOP. “The situation is not improving. We’ve spent two years messaging people, and it hasn’t made them change their mind.”

In the coming weeks, Dennis is rolling out its own consent management platform, which will integrate ad-block messaging, allowing it to identify audiences and show them different messages. The publisher will A/B test wording and a series of messages to see how audiences respond. “It will tie up the user journey in a coherent message,” Flood said.

Dennis is working with Sourcepoint for the ad-block integration in its CMP. “It is a user’s choice as to whether to decline consent to share their data with a publisher’s partner,” said Brian Kane, co-founder and COO at Sourcepoint, “but there can still be a transparent value exchange that takes place between a publisher and its audience to ensure some form of alternate compensation is provided.”

Flood said publishers are seeing positive results anecdotally from people opting in to share their data since GDPR took effect on May 25, although it’s still early days, and testing is ongoing.

There’s a possibility that certain ad-block software could begin blocking consent messages, said Flood, meaning publishers won’t have access to this segment of users to gain consent. “It would be an existing problem that will still continue,” Flood said. “Ad-block users weren’t having cookies dropped on them anyway. The devil will be in the detail of how publisher react.”

“Users of ad-block software don’t always have the choice on what they can and can’t see,” he added. “With CMP, users do have that choice. That’s what GDPR is about: giving users more choice.”

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