How publishers are turning up the heat in the ad-blocking war
Just for August, a random selection of registered, non-subscribing desktop readers of the FT.com who had downloaded ad blocking software were met with an article missing a third of its words. How frustrating, maddening even … until you realise that a third roughly equates to the proportion of total digital earnings made up by ad revenue at the Financial Times. What an ingenuous way of illustrating the impact of ad blocking software on a publisher’s revenue and, consequently, content. The threat posed to publishers by ad blocking software is forcing many to think in a similarly lateral way.
According to the Interactive Advertising Bureau [IAB] UK’s Ad Blocking Report, published in March, 22% of British adults online were found to be using ad blocking software, a rise from 18% in October 2015. And although publishers will be relieved after the EU said this week that plans by mobile phone operators to block adverts for customers across their networks breached net neutrality legislation, if the use of ad blockers grows the consequences could be dramatic.
Google’s former general manager of marketplace development, Ben Barokas, now CEO of Sourcepoint, which works with publishers to tackle the ad blocking challenge, believes the number of users deploying ad blocking software averages around 15%, but says some publishers are seeing upwards of 40% of their audience using ad blocking tools. “For premium publishers, with large audiences, the revenue risk is significant – an average ad block rate of 20% could result in a loss of several million dollars a month.”
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Between 20 and 22% of the FT.com’s users are blocking advertising, and while Jon Slade, chief commercial officer at the Financial Times says the problem is not yet “material”, he is acutely aware of the future impact. “Our greatest concern is where we go in the next six to 12 months because we still have enough advertising to sell – just about – but if it continues to get a great deal worse and the industry doesn’t address the problems in the way it needs to, we can anticipate some serious problems down the line.”
The Financial Times is currently trialling four approaches aimed at reducing the number of users blocking ads. Arguably its most innovative experiment is to obscure a third of an article. Slade admits that while it is a little cheeky, it is intended to illustrate the necessary value exchange to readers. “This solution came up as one that raised a bit of a smile but also helped people to understand the impact and consequences. It was done in a thoughtful way and in keeping with the Financial Times brand, which can be witty. We think it is quite clever and will give us some good results.”
Another thoughtful approach is being undertaken by Forbes, which in December 2015 started rewarding those who turned off their ad blocking software with an ad-light experience. This sees the removal of certain types of ads, including interstitial, auto-play and in-line video ads, to enhance the reader experience. Mark Howard, chief revenue officer at Forbes says, “It acknowledges that users have a choice and this approach respects that choice and gives them the ability to choose whether they want to support our content with viewing ads.”
Figures from February 2016 revealed that four million desktop visitors to Forbes – 42.3% of those asked – had either disabled their blockers or whitelisted Forbes.com since the trial began. This translated into the delivery of 63 million ad impressions that would have otherwise not been seen. “We started seeing users whitelist us immediately and, as we measured their site visits, we saw that the people participating in our ad light experience were consuming 40%–plus more page views and spending over 100% more time on the site,” says Howard.
Other publishers are acting to reduce their reliance on online advertising. For Car Throttle, billed as the “Lad Bible for petrol heads” – which reaches 100 million car enthusiasts each month – the challenge is acute. Figures from the IAB in November 2015 show that ad blocking is more prevalent among men (23%) than women (13%) and the propensity to block ads decreases with age – from 35% of 18- to 24-year-olds to 13% of people age 55 and over. “Ninety percent of our audience are millennial males so we’ve always known that our users are likely to be heavy users of ad blocking software (around 50% of all desktop users have ad blockers turned on),” says Adnan Ebrahim, chief executive of Car Throttle. “Our commercial strategy was formed with this very much in mind.”
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Car Throttle’s approach has been to embrace branded content campaigns, which now make up 80% of the site’s ad revenue. “It’s an effective way of being able to offer advertisers access to users without being dependent on ‘ad-blockable’ advertising.” It has run recent content campaigns with Nissan and Ford, creating and distributing content to its millennial car enthusiasts. “In the case of Nissan, the video we helped to distribute reached over 15 million people with 5.5m views, because the advertiser message becomes part of the content.”
The International Business Times (IBT) is trialling “polite but firm” messaging such as “By having ads on our site, this ensures we can offer our content to you for free. Please turn off your ad blocker or whitelist us. Thanks in advance, the IBT team” to ad blocking users. But the organisation is also looking to spread its risk by exploring other revenue streams. IBT editor-in-chief John Crowley says the publisher is “devoting increasing focus to platforms like Facebook Live, where we see new revenue opportunities unaffected by ad blocking”. Facebook revealed in August that it was trialling an option for publishers to insert a short ad break in their Facebook Live videos.
Yet those publishers who take arguably the crudest solution to the problem and simply ban some readers from accessing content are also seeing results. In October 2015, 20% of daily financial site City A.M.’s desktop Firefox users were using ad blocking software. The finding prompted City A.M. to implement a ban against such readers – the first UK newspaper to do so – greeting them with blurred content overlaid with a message explaining that it relies on advertising to fund its journalism. It has proved a successful move. “Staggeringly, 65% of desktop users turn off their ad blockers when confronted with our polite message,” says Emma Haslett, digital editor at City A.M. “Objections have been fairly minimal.”
What works in the fight against ad blocking will depend on each publisher and its audience, but finding fitting ways to educate readers about the necessary value exchange is clearly a top priority.
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