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Perspectives: Ad-Blocking According to the Pros

Source: artstewart.com

Mobile ad-blocking has been a hot topic in the press over the past month, and members of the digital media industry are approaching it from all sides.

Forbes’ Gianni Mascioli, who covers the media and viral content as it relates to millennials, recently wrote an article in which he wonders if ad-blocking will destroy online publishing or save it. In a column for AdExchanger on the same topic, Alex Magnin, chief revenue officer and partner at The Thought & Expression Co., said that ad-blocking is simply another step in the evolution of the digital publishing industry.

Is ad-blocking a black-and-white issue for digital publishers, or is there some grey area?

The Parse.ly team asked both Mascioli and Magnin some follow-up questions about ad-blocking, and we came up with a few unified responses:

  • Ad-blocking is not the biggest challenge that publishers face today, but it could become a larger problem as the industry continues to evolve.
  • Ad-blocking on mobile would likely have happened regardless of Apple’s recent announcement, and adoption has not been huge.
  • One positive thing that ad-blocking could do for the digital media industry is to encourage the creation and publication of higher quality ads.

Read on for a full transcript of Mascioli and Magnin’s complete responses.

Is ad blocking the biggest challenge that publishers face today? Why or why not?

Gianni MascioliGIANNI MASCIOLI: It’s certainly not the biggest – at least not today. But it has the potential to become a major force to be reckoned with in digital publishing. From the consumer side, the browsing experience is a complete improvement on most websites when you block ads. The page loads faster, the content looks cleaner, and there’s no threat of an interruption to your engagement. Platforms and browsers seem reluctant to stand in the way of it, so unless publishers (or the government) act, there’s little that stops the practice from growing out of control.

Right now, there are other more pressing challenges that most publishers still haven’t completely figured out: changing goal posts on viewability, high page load times, and mobile-first thinking among them.

But ad-blocking intersects almost all of these challenges in one way or another, and if it reaches a critical mass, it could become publishers’ biggest challenge.

Alex MagninALEX MAGNIN: Ad-blocking is another symptom of the challenge facing publishers today, which is essentially a supply-demand challenge. Ad dollars are relatively fixed, while the time we’re spending with media, the low costs of making content, and the freedom of distribution have exploded supply. Ad-blocking is basically a feature of digital media — just as advertisers have an amazing amount of choice for allocating their dollars, consumers have abundant choices for allocating their time. So the “cost” consumers must pay, in terms of their attention to ads, is lowered (for some types of content, perhaps to zero).

All of the sub-challenges associated with this grand challenge, ad-blocking included, have similar solutions: publishers must either reach many more people; or create “must-have” experiences users will pay for (with ads or money); or offer related services to clients (e.g. custom content); or be more efficient than ever; or, most likely, pursue some combination of all of these options.

What’s the best thing that ad-blocking will do for the digital media industry?

Gianni MascioliGIANNI MASCIOLI: I’m reluctant to say there’s anything that ad-blocking will do in the future, because I think there’s many different ways it could unfold. But there’s a lot of things it could do. Some are saying it might force publishers to clean up sites by selling less inventory and advertisers to create “better” ads. Too much inventory is a big reason why CPMs (and engagement even) are so low, so in theory, less and better units could help balance the market toward publishers a little more. But I’m personally skeptical of the argument that ad-blocking will lead to “better” (or even less) ads, and that even if the ads are “better,” consumers won’t still block them.

I think one thing that hasn’t been discussed is the potential for a pushback against third-party data collection, which up until now has only been discussed in smaller circles.

There’s a lot of data out there that suggests millennials aren’t as concerned about it as older people, but a pretty sizeable number of people using ad-blockers now claim they do it to avoid malware and untrustworthy tracking on a page.  

Alex MagninALEX MAGNIN: There’s definitely been a “tragedy of the commons” with advertising technology. It’s hard for creative agencies, under their own time and pricing pressure, to care about optimizing a creative for file size. It’s also natural for clients to push for more impact at the expense of a publisher’s brand, and the publishers, with all their pressures, are likely to give in. The third-party ecosystem is a mess, with too many “features” companies and not enough consolidated solutions. So, the best thing the focus on ad-blocking will do is push some common-sense changes to this arrangement.

Hopefully, we’ll see publishers push for more sustainable creatives, we’ll see improved policing by the ad exchanges, and we’ll see ad-tech consolidation, which is already underway.

Many say that mobile ad-blocking was a game-changer. Do you agree? Why or why not?

Gianni MascioliGIANNI MASCIOLI: I’d dispute that a little. Apple’s decision will probably make ad-block adoption happen faster, but I believe the capability to block within Safari would have eventually developed with or without Apple’s consent.

What it does do is legitimize the technology, and I think that’s what anyone in digital advertising should be worried about. Apple’s decision caught the attention of a lot of writers (myself included), and now a lot more people – mostly older and less tech-savvy people – know that it’s something they can do. Admittedly, there are people who know about the technology and choose not to use it, but again, using an ad-blocker is a Pareto-improvement from a consumer standpoint – a big one at that. There’s more of a motivation to try it out now (and a bigger pool of people that have the knowledge to do that), and once you try it, it’s hard to stop.

Alex MagninALEX MAGNIN: I don’t believe mobile ad-blocking will have large business impacts anytime soon. Adoption will be slow. Content blocking is two-step process which will deter your average user. If you look at the claims of the blocker-developers, it’s likely that first-week downloads were less than 500K globally, and those were the folks who were passionately waiting for it. Plus, it’s unclear when content opened via Facebook and other in-app browsers based on WebKit will be subject to content blocking; they aren’t now.

Longer-term, the same challenges I spoke of earlier very much apply to mobile. I think the most important current game-changer for publishers will be how “controlled distribution” efforts, like Apple News, turn out.

Interested in Gianni Mascioli or Alex Magnin’s writing? You can follow them on Twitter at @g_masc or @alexmagnin, respectively.