Social Media & Content Specialist.
Some see them as essential to using the Internet, others consider them an existential threat: It may not sound like it, but we're talking about software that blocks advertising online. While consumers of Web content can now scarcely find what they're looking for without blocking out all those annoying ads, publishers are constantly having to increase their advertising in order to recoup the costs of content generation. As this self-reinforcing cycle continues to escalate, many are searching urgently for a way to break it.
These days, anyone who visits the websites of media companies or other major publishers is more or less bombarded with online ads. There are static and animated banners, rich media banners, live banners, and streaming banners with size descriptions like medium rectangle, square pop-up, full banner, skyscraper, and leaderboard. As you can see, the options available are many, and plenty of publishers make liberal use of them. On some sites, visitors are forced to find the content they actually want among a clamor of commercial messaging. And let's not forget how long it takes to load websites with all those GIFs, JPGs, and Flash elements jostling for their turn: This can quickly become a nuisance – particularly in light of increasing mobile use, but also in desktop environments.
This is precisely where ad blockers promise relief. Easy to install as browser plug-ins without any in-depth technical expertise, they enable users to call up websites without the aggravation of advertising. Ad blockers thus offer a simple solution to a current problem, which is why their rapid rise in popularity comes as little surprise. Various studies on ad blockers have reported a usage rate between 20 and 25%. According to the Online-Vermarkterkreis (OVK, part of the German Association for the Digital Economy BVDW), for example, 21.49% of its members were using ad blockers as of July 2015. That figure is only expected to increase.
For publishers, this trend is not only troubling, but a threat to their long-term survival, as well. After all, the bulk of their business is financed by the ads blockers are meant to thwart. Several media companies, including Germany's Axel Springer SE at Bild.de and the Gruner + Jahr publishing group at Geo.de, have already begun to block ad blockers in response. From a publisher's perspective, this is an understandable reaction: The content they release on their platforms costs money and therefore requires some form of return. As long as users in Germany remain highly reluctant to pay for content, there’s virtually no alternative to the widespread advertising-based model. Meanwhile, Geo.de is attempting a rather intriguing approach: Any visitor with an active ad blocker will run into the site's paywall. These users can then obtain a day pass to an ad-free version of the site for €0.49, or week-long access for €2.99. According to Gruner + Jahr, its initial experience with this method has been positive. „We're very pleased with the results of this experiment thus far and are considering expanding it to further offerings,“ the group stated.
While it remains to be seen whether or not other websites can adopt the Geo.de model, one thing is clear: Exclusive content designed to be highly relevant for specific target groups is more compatible with alternative methods of monetization. This is more difficult with the vast majority of content, as it would require all publishers to get on the same page. Whenever readers can get what they want for free from another source, they prefer simply changing sites to pulling out their credit cards.
Right now, publishers would be best served by properly analyzing the issue at hand. Focusing their efforts on combating ad blockers may seem like the only logical step, but the reason why their ad-driven business model is on the decline lies elsewhere. The acceptance of advertising correlates strongly with the quality and quantity thereof, and both have been at odds with users' expectations for some time. Apart from the rare cases in which they are interesting, useful, or entertaining, online ads are designed solely to draw attention and clicks. Their substandard quality, however, has made them less and less effective in this regard, which publishers have sought to offset – by using more ads. Instead of really investing in solid, relevant online advertising and employing it in a highly targeted fashion, they have adopted a blanket approach to marketing. This has resulted in the self-reinforcing cycle mentioned above.
Having borne the brunt of such campaigns, many readers now view ad blockers as a refuge from banners, pop-ups, pop-unders, and all the other forms of in-your-face advertising. Modern targeting models have not done much to change this situation; indeed, they mainly serve the objectives of publishers and the advertisers themselves while neglecting the needs of the groups they are trying to reach. Meanwhile, it's never been as easy to fulfill readers' expectations than it is today thanks to big data. Media companies, however, are either failing to fully commit to using the abundance of information available or interpreting it from the wrong point of view. Online ads have to align with the needs and expectations of consumers – not those of the businesses doing the advertising.
So, what's the answer? Are business models based on ad revenues now a thing of the past for publishers? Do advertisers need to find alternative forms of marketing? And do consumers need to be prepared to bid farewell to the free Web?
The characteristics of good and relevant advertising are defined not by marketing specialists and media agencies, but by consumers themselves. When we find an ad annoying because it pops up at random – much like an unsolicited telemarketer – we do our best to avoid it. An ad is relevant, on the other hand, when it has some significance for the target customer in question. This might include a tangible benefit based on that person's current situation.
If publishers and advertisers start remembering to focus on the quality of their advertising and the interests, expectations, and needs of consumers, they stand a good chance of regaining people's attention and making ads attractive again by offering real utility. Online advertising needs to improve such that consumers actually want to see it. If and when it does, click rates will start rising again, publishers will be able to reduce the number of ads they place – and consumers will no longer feel compelled to use ad blockers.
At that point, relevant advertising will benefit everyone involved: Advertisers will draw interest and attention, publishers will be able to concentrate on their content again while retaining their established business models, and consumers will enjoy a diverse online landscape in which free content is financed by ads that are interesting and useful to them.