Culture Secretary wades into ad-blocking debate – but what about the customers?OliverLuft 9th March 2016
Barely a month seems to go by without us writing about ad-blocking – if we’re not discussing its rising popularity, or increased use on mobile phones, we’re examining the fear it engenders in digital publishers.
In fact, ad-blocking has been such a prevalent topic, I think Martin’s pretty bored of it! And I was prepared to leave the subject well alone, but then the issue was ratcheted up several notches last week when John Whittingdale, the Culture Secretary, used his speech at the Oxford Media Convention to wade into the debate.
Taking a very pro-publisher stance, Whittingdale told delegates that ad-blocking software was seen by digital platform owners as being like ‘modern day protection racket’ that was depriving websites of ‘legitimate income’ and could lead to the demise, or diminishing, of content production.
“Some of the ad-blocking companies are drawing up their own rules of acceptable advertising or offering to white list providers in return for payment,” he said.
“Many see such practices as akin to a modern day protection racket.”
Naturally, the story was jumped all over by those very newspaper websites that rely on advertising income to fund the production and publication of their free content, but rather than calling for an outright ban Whittingdale said he wanted consultation. He vowed to set up meetings involving major publishers, social platforms, and ad-blocking companies in the coming weeks.
So, what could this achieve?
Despite positive murmurings and a move by some ad-blocking firms to work more constructively with publishers to allows ads, at first look there doesn’t seem much common ground.
Of course, ad-blocking is scary for many publishers because they’re reliant on drawing revenue from ads. Perhaps too reliant. Many publishers, it seems, just can’t let go of the old print way of drawing revenue from display. Many have even been rendered immobile by a refusal to examine new ways of possible income generation (my colleague Matt makes that very point in a recent post).
On the other side of the argument are firm like Three, which is planning to rollout network-level ad-blocking, starting with trials in the UK, claiming the cost of all that extra mobile data needed to supply ads is being unfairly forced onto the customer.
Then add to that ad-blocking firms themselves, many of which make a strong consumer case for their continued use. And it’s this case, in particular, that the Culture Secretary didn’t really address.
Ad Blocker Plus, which has more than 60 million active global users, is right when it made the claim to Marketing Week that ad-blocking is a ‘consumer reaction expressing unambiguous disapproval of online advertising’.
The latest figures from the Internet Advertising Bureau, the UK trade association for online and mobile advertising, suggests that around 22% of British adults online now use some form of ad-block software, up from 18% in October. The Guardian estimates this new figure represents about 9.2 million of the 41.8 million UK adults who regularly use the internet.
That’s a huge number of people who aren’t interested in seeing the ads that publishers try to force on them. Consumers regard online ads as intrusive, they resent how ads can slow the load times of web pages, and they aren’t interested, as mentioned earlier, in paying for all the additional data-capacity they’re required to have for ads to load.
Whittingdale was right to highlight the big problem content-producers were having as a result of ad-blocking technologies, but his message didn’t fully address the issue of an industry that hasn’t fully taken the customer into account when it comes to viewing ads.
But perhaps there might, finally, be some movement there…
Scott Cunningham, senior VP-technology and ad operations at the Interactive Advertising Bureau, the group that develops standards for the online advertising industry, was frank on this issue recently. Cunningham is reported saying they had ‘messed up’ and ‘lost track of the user experience’.
“As technologists, tasked with delivering content and services to users, we lost track of the user experience,” said a statement, written by Cunningham, that accompanied the IAB’s planned overhaul of its advertising principles.
“We build advertising technology to optimize publishers’ yield of marketing budgets that had eroded after the last recession,” Cunningham was quoted saying by Ad Age. “Looking back now, our scraping of dimes may have cost us dollars in consumer loyalty.”
That final sentence, about consumer loyalty, is what seems to be lacking from the Culture Secretary’s speech and the publisher-sided discussion that has followed.
Until publishers look to innovate the manner in which they turn content into revenue – or at least start to pay significant attention to consumer attitudes – then the number of people wanting to block ads will continue to grow. Either that or publishers more attuned to the needs and desires of the digital public will start to experiment – and find an audience – with revenue models that others aren’t prepared to risk.