The fourth quarter is always the most exciting (read: stressful) time of year for the advertising industry. Planning for the following year has to be finalized, leftover budgets have to be spent and, of course, products have to move.
But this year, a shadow precedes the holiday season: Blocktober.
Ad blocking was the talk of Ad Week. It was brought up at panels on everything from native advertising to creativity, and IAB senior vice-president Scott Cunningham called it “highway robbery” at the organization’s annual Mixx conference. In Canada, a recent study found that over 20% of Internet users use ad blocking technology, a higher per capita rate than in the U.S.
For those who are unfamiliar, ad blocking collectively refers to software users can use to prevent digital display and video ads from appearing on their computers and mobile devices.
Why does this matter? That same report estimated that, globally, ad blocking would cost publishers some $22 billion in revenue. Numbers of that magnitude caused an understandable stir. It was compounded further with Apple’s announcement that they would allow ad blockers on the iOS 9 operating system.
But we’re not sure the hysteria is warranted. It seems very unlikely that the entire internet ecosystem – which is predicated on ads enabling free content – will allow a practice that threatens their existence to proliferate into a meaningful antagonist. Billions of dollars are at stake and publishers will not stand idly by as budgets fall by the wayside.
Already, many premium broadcast-quality publishers proactively detect the presence of ad blockers and require viewers to disable them in order to view content. Most ad blocking technologies have a “whitelist” of publishers that have created ad experiences that don’t detract from user experience. (One popular ad blocker, Adblock Plus, says it’s putting together an advisory board of consumers, advertisers and publishers to help it determine which ads are “acceptable” and which aren’t.) And as advanced advertising techniques improve ad relevance and drive increased engagement, ad blockers’ popularity and prevalence should stabilize.
But what about Apple? Well, while Apple’s move might have some impact on ads served within mobile web browsers such as Safari, the vast majority of mobile ads should remain unaffected because 88% of time spent by smartphone users occurs in mobile apps. Ad blocking technology will not work within app environments, so the bulk of mobile ads should not be impacted.
From a more practical standpoint, there is more than enough inventory available to offset an uptick in ad blocking adoption. Global growth in ad blocking grew an estimated 41% last year. However, total number of available impressions in our platform grew by 350% over that same time.
As issues such as suspicious traffic and viewability continue to motivate increased interest in ensuring overall media quality, the portion of ad spend directed to inventory from premium, top-tier publishers will only escalate. The rise of programmatic TV, connected TV, and other non-traditional formats (which accounted for about 20% of spend through our platform in Q2 2015) will further mitigate ad blocking, since those mediums are the least likely to be affected.
Considering these factors, ad blocking seems more like a drop in a bucket than it does a perfect storm. As technology continues to break down barriers, marketers will continue to diversify where their ads are shown and drive business results.
Now we can get back to enjoying Q4.
Kenneth Chow is director of client services at TubeMogul.