(Apsalar) Mobile Ad Blocking And What We Can Do About It

Source: Apsalar

The ad blocking epidemic has reached mobile advertising last year. It has affected advertisers and publishers, leaving many to wonder what can be done to mitigate the risks. To dive deeper into this topic, we've partnered with Apsalar to provide detailed insights about ad blocking growth and what the industry can do about it.

A recent Adobe and PageFair study reported that almost 200 million people are now using desktop ad blockers. Boom. That’s a lot of people. And definitely evidence of a worrying trend reflecting both economic risk and a loss of positive advertiser/customer relationships. Here’s a chart that outlines both the scale and trend in this data.

The study showed that more than 15% of US desktop users were now using ad blockers, up from less than 10% in about a year-and-a-half.

Stepping beyond the fact that it is now harder to delight hundreds of millions of people with your creative genius, the losses in revenue are pretty staggering. The same study showed that the economic costs of ad blocking are quite staggering.

That’s just on the PC side. On the mobile ad blocking side, we’ve all seen the headlines related to Apple’s allowing mobile ad blockers in the App Store. And Android has had mobile ad blockers for some time.

Mobile Ad Blocking and the Social Contract

From where I sit, the rapid growth in PC and mobile ad blocking technology reflects cracks in the social contract between advertisers and consumers. Ads as a broad class of content aren’t the problem here, but rather a small subset of publishers and ad formats that measurably interfere with the quality of the customer’s connected experience, on both mobile devices and PC. Ads always have some impact on device performance. They require CPU and data consumption in order to display. It’s the degree of that performance effect that matters. And arguably, performance effects are even more important in mobile than on PC because we have a more personal relationship with our handheld iOS and Android devices.

But in some cases, the balance has shifted so far to the advertising experience that consumers are naturally frustrated. The same Adobe and PageFair study revealed that in a test of ten news sites, using a mobile ad blocker resulted in a page load time that was four times faster and consumed 50% less data.

When you see data like that, it is perhaps no wonder than mobile ad blocking rocketed into such a popular topic when Apple allowed the advertising blockers in the App Store. And why initial installs of these mobile ad blocker products were so high.

Sridhar Ramaswamy, Google’s SVP of Ads and Commerce, said in a recent Advertising Week presentation, what it will take to address this very real challenge to our industry – and indeed to the free Internet – is an industry-wide effort that puts delivery of a strong consumer experience first among our list of priorities.

This is something we need to address together as an industry. We need standards of good ads that you and I would find acceptable as consumers. Ad blocking presents creative challenges and certainly a business challenge. … A typical television show of 30 minutes has eight minutes of ads, about 25 percent. Over the decades, television networks have figured out how much advertising is tolerable, and they maintain a reasonable limit. As a starting point for designing Web pages, it might be reasonable to limit ads and sponsored content to 25 percent of the page area. Publishers should look at their pages and consider, “Would I pay for my ad to be on this page?”

Our industry has sometimes sustained self-inflicted wounds is by placing so much advertising on pages that the consumption experience isn’t worth the bother. We all know why publishers have increased the average number of ads on pages: money. Publishers have responded to low Display and other CPMs by increasing ads per page. But it’s like when farmers produce more corn when corn prices drop; corn and ad prices drop still further. Unfortunately, that has increased the supply of ads (but not quality ads) even faster than has grown supply. The result is that even though digital spend grows at staggering rates every year, CPMs for advertising remain pretty darned low. This analysis from MonetizePros shows just how low.

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Pause for a moment and think about that dynamic and you begin to get a sense of the supply issue. In the US, for example, demand is increasing at more than 10% a year, but prices are still quite low. Increasing, surely, and particularly in mobile. But still pretty low.

Many think that this “block ads” trend was driven by the advent of ad exchanges, but I’d question that. In fact, many exchanges, including all of the leading exchanges, have standards and guidelines for the number of ads allowed per page. Besides, adding ads is a longstanding trend that long predates the advent of the exchanges. An informal count of ad placements on sites I visit every day (eliminating those with infinite scroll) averaged more than a dozen display and video placements, in addition to a growing number of native content units. And niche website publisher Promise Media did an analysis in which it found two sites with 153 ads per page! Whatever the total web average, it’s clear that a race to the bottom has driven up clutter, and may well be a contributor to some consumers’ desire to block mobile and PC ads.

In addition, the networks and exchanges are actually delivering disincentives to ad unit proliferation. For example, as early as 2012, Google has penalized AdSense pages with excessive numbers of ads. That’s been a big force in improving web experiences in the long tail. Further, they have rewarded pubs that have delivered a limited amount of advertising above the fold, and reduced the value of ad impressions that occur below the fold. Here’s an excerpt from the blog post where Google announced these changes to their AdSense algorithm:

If you click on a website and the part of the website you see first either doesn’t have a lot of visible content above-the-fold or dedicates a large fraction of the site’s initial screen real estate to ads, that’s not a very good user experience. Such sites may not rank as highly going forward. … This algorithmic change does not affect sites who place ads above-the-fold to a normal degree, but affects sites that go much further to load the top of the page with ads to an excessive degree or that make it hard to find the actual original content on the page. This new algorithmic improvement tends to impact sites where there is only a small amount of visible content above-the-fold or relevant content is persistently pushed down by large blocks of ads.

Today, AdSense participants are limited to the following number of ads per page:

• Up to three AdSense for content units
• Up to three link units
• Up to two search boxes

Further, their video training and tutorial programs recommend just three ads per page as the quantity that will maximize revenue.

A 2012 study from Say Media showed that the number of ads on a page affected attention to brand messages in truly profound ways. Their analysis tested pages on four sites, with four different levels of advertising/ad clutter. Not surprisingly, the data showed that noticing values, purchase intent, brand favorability and other measures were better for low clutter environments. Further, quality perceptions of the publisher were much higher when pages were uncluttered.

What iOS and Android App Publishers Can Do to Mitigate Mobile Ad Blocking Risks

Now, this is a blog focused on apps and mobile devices, so it makes sense for us to think of all of this data in the context of what we can do to ensure that we proactively protect the industry. Let’s start with the size and scope of the immediate threat. This Fortune Magazine article explains why they see the threat to mobile advertising as relatively contained.

• First, brokerage firm [UBS] points out that iOS ad-blocking apps only block advertising that comes via Apple’s mobile Safari browser, but the vast majority of mobile users spend most of their time inside apps, which also generate the bulk of advertising revenue.
• Second, since only ads in Safari are blocked by default, it’s worth looking at the browser’s market share, which is relatively small — just 22% of web traffic globally comes via Apple’s browser.
• Third, the brokerage firm points out that while iOS 9 supports ad blocking, users who want to implement it have to do some setup — they have to download an ad blocker and then go into their device’s settings panel to let that app communicate with Safari.
• Finally, ad blocking will probably be curtailed even further by the fact that support for such apps is tied to iOS 9, which only works on Apple’s more recent, 64-bit devices.

In addition, publishers will naturally deploy strategies to combat ad blocking. For example, Germany’s popular Bild newspaper redirects the user to a subscription sign-up page if they arrive on the site with an ad blocker installed and working.

We may very soon have an arms race on our hands:

• Consumer tries to block ads.
• Publisher stops ad blocker.
• Consumer upgrades to a new ad blocker to block ads.
• Etc.

But whatever you think is the level of risk at this point, there are steps that mobile and mobile app marketers should take to help mitigate long-term consumer demand for ad blocking. Consider these six ideas as you plan your marketing programs:

1. Consider Creating an App if You Don’t Have One. Having control of user experience can be very valuable for a brand, and apps give you that control. Not every brand can offer value with an app, but many can. All it takes is a deep knowledge of your customers and a good think about the unique, category-driven value you could provide them.
2. Market In-App: Consumers spend more than 80% of their mobile time in-app, so it makes temporal sense to be there. In addition, ad blockers generally can’t block ads served in-app.
3. Use the Golden Rule When it Comes to Incorporating Advertising into Your Mobile Apps. Do unto the consumer as you would have them do unto you. But ensuring that you focus on delivering an outstanding consumer experience in your app, you reinforce the social contract between publisher and mobile device user. That means keeping the number of ads at a reasonable level, and ensuring that the ad formats you allow are appropriate.
4. Take the Long View on Ad Inventory. Consumers prefer, and brand benefit from, lower clutter environments. The best media properties naturally take steps to ensure that the inventory they sell offers reasonable limits to the number of ads per page. Both the best networks and exchanges have protections in place to ensure a quality consumer experience.
5. Focus on Attracting and Marketing to Quality Users. We truly are in the midst of a sea change as regards how app publishers think about metrics like install counts. While some still like vanity metrics, we are seeing more and more companies focus their resources on users that drive engagement and revenue. A focus on quality users favors acquisition tactics delivered in higher quality ad placements.
6. Solicit, Read and Respond to User Feedback. When customers provide insights to you in ratings, comments and other channels, you have a unique opportunity to learn and dramatically improve user satisfaction. This is just as true of the ways that you deliver ads as it is for product insights.
7. Participate in Efforts to Set and Evangelize Standards for Advertising that Respect the User Experience. Our industry has demonstrated on a variety of occasions that it has the will to voluntarily monitor and control its own behavior, instead of waiting for government actions. That’s something we should be proud of, and encourage to continue.

By behaving as good corporate citizens and thinking about the reasons why some consumers want to block ads, we can address the root causes of this threat while taking short term actions that mitigate immediate risks.

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