News: Press Clippings

Looming mobile ad-blocking crisis favors native ad growth

With the use of ad-blocking software spreading to mobile and likely to gain steam as it becomes more widely available, marketers should start paying closer attention to sponsored content and native ads on mobile.

A new report from PageFair and Adobe found a 41 percent increase in the use of ad-blocking software, with use spreading to mobile in Asia. The trend is likely to accelerate in September when the ability to block ads is introduced to iOS.

“The big news for marketers is that iOS 9 and Ad Block for Android have the potential to be extremely disruptive,” said Campbell Foster, director of product marketing at Adobe Primetime. “Historically ad blocking has been limited to desktop, but advancements in ad blocking technology have the potential to drastically limit marketers’ ability to reach consumers on devices.

“We were surprised to learn that the UC Browser, which has ad blocking built in, has gotten such huge traction in India and China,” he said. “Those are massive markets. If UC takes off in the U.S., the potential for disruption is extraordinary.

“Brands need to understand consumers more deeply, and use technology wisely so they can reach their target audience with the right message at the right time — without the annoyances and intrusiveness that encumber desktop ad practices.”

Blocking mobile ads

Currently, the ad blocking that is taking place on mobile is mostly happening on Firefox and Android, which have a 93 percent share of mobile ad blocking, according to PageFair and Adobe.

Several developments so far in 2015 point to ad blocking becoming a bigger problem for marketers on mobile going forward.

Apple said recently that it will introduce an ad-blocking feature to the Safari mobile browser for iOS 9. Since Apple’s iAds appear in iOS apps, they will not be impacted, but a potential significant number of mobile Web ads – most of which come from Google – could be blocked if users turn on the extension.

In May, Adblock Plus, which makes the most downloaded ad-blocking browser extension, launched a mobile browser in beta for Android devices. An iOS option is expected to become available as well.

Ad blocking on mobile could also come from carriers, with several mobile carriers in Europe earlier this year reported to be considering blocking display advertising to their subscribers as tension grows between the telecommunications sector and ad technology companies such as Google (see story).

“In the context of mobile, I think [ad blocking is] actually just going to push publishers faster towards embracing sponsored content and native advertising, the likes of which Facebook has already mastered,” said David McIninch, chief revenue officer at Acquisio.

“Ad blocking software has a tough time distinguishing paid from unpaid native ads, and sponsored content is simply just content, so it’s almost impossible to block,” he said. “It also usually escapes the blockers to put recommendation boxes at the bottom and alongside of articles – like what Outbrain has figured out.”

Creative tactics

The growing use of ad blocking on mobile underscores the need for marketers to have strong content strategies in place.

“Brands need to come up with good, engaging content in whatever format they choose, especially video, and get a native ad strategy working that enables them to push the boundaries of ad blockers – and some would suggest journalistic ethics,” Mr. McIninch said. “People always complain they hate ‘ads’ until they see one they like or for that matter, watch the Super Bowl.

“What Spotify and others have also proven, is that people actually accept advertising readily if it’s layered into a freemium model for services they like,” he said.

“So, in as much as blockers change how advertisers and the brands they represent serve up ads, it doesn’t change the need for the ads to pay for the content, and they have to continue to be creative about ‘submersive’ – i.e. subversive – tactics to get that engagement from their audiences.”

The cost

These developments come as ad blocking continues to gain steam on desktop.

The PageFair report reveals that the number of people using ad-blocking software grew by 41 percent year-over-year by the end of the second quarter for a total of198 million monthly active users).

Ad blocking usage in the United States grew 48 percent for a total of 45 million monthly active users. As much as 16 percent of the U.S. online population blocked ads during the second quarter. Oregon has the highest ad-blocking rate at 16.4 percent while the Washington has the lowest at 8.2 percent.

In Europe, ad block usage grew by 35 percent for a total of 77 million monthly active users.

The estimated loss of global revenue due to blocked advertising during 2015 is $21.8 billion.

By 2016, the global cost of ad blocking is expected to be $41.4 billion.

As many as 26.5 percent of visitors to gaming Web sites block ads, compared with 5.4 percent of visitors to health sites, 4.9 percent of visitors to charity sites and 2.5 percent of visitors to government and legal sites.

“It’s not surprising to see that an increasing number of consumers across the globe are turning to ad blockers to tune out irrelevant and intrusive ads,” said Jordan Cohen, chief marketing officer at Fluent. “This is even more relevant in an era when north of 60 percent of time spent online is on mobile devices: there are far too many instances of accidental clicks on ads on smartphones and tablets, which both frustrates users and also results in advertisers paying for clicks that they shouldn’t have to pay for.

“Here at Fluent, we prioritize ensuring that ads are transparent, easily skippable if a consumer doesn’t want to take action in response to the ad, and also performance-based, so advertisers only pay when a consumer takes a meaningful action like signing up for a free trial or an email list — never for impressions or erroneous clicks that go nowhere,” he said.

“We feel that’s the best way to operate commercially today and will only become more important in the months and years ahead. Consumers want control of their ad experiences and smart marketers will give it to them.”

Fluent
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