December 11, 2014
It’s been a tough time for advertising execs as the industry fights on several fronts; with first the news that half of media spends on display ads via Google may have been wasted on “non-viewable” impressions, to the year-long exhaustive struggles with Wall Street investors in explaining what the ad-tech sector is actually doing. Now, the ad-tech and online publishing industries are facing another challenge; empowered consumer apathy.
Our second blog post regarding the fate and state of the online advertising industry as we move into the New Year involves the dramatic rise of ad blocking technology, and in what ways 2015 is already setting the stage for a clash between web users and content creators, with ad-tech and publisher caught in the centre of a clearly oncoming crisis.
PageFair, an agency which has adapted to specifically address the problem of lost revenue through adblocking, released its report on the rise of adblock technology, and what the implications mean for publisher and advertisers.
The figures are alarming. An estimated 5% of internet users are now using adblocking software, following a spike in uptake of nearly 70% between June 2013-2014. This growth has been driven by several successes in the open source field of adblock tech development which has been (until recently) hosted by the Google Chrome’s dev community. Google Chrome has witnessed a doubling of adblock penetration because of this, prompting the Play Store to delete all Adblock apps.
With the release of successive Adblock platforms, uptake has risen primarily through word of mouth. With an estimated 26% usage in the UK to a massive 50% usage in Germany, Adblock tech use varies by country; with the strongest worldwide concentration being European. With adblock use driven by young internet users, continuing trends project that adblock tech usage may only increase with an increasingly young and digitally literate population. With 41% of 18-29 years old using adblocking technology this is a major issue that advertisers and publishers need to address.
The rise of the open source development has given end web-users a say in how the advertising ecosystem effects them. The “Deal” that once existed between ad firms and publisher did not factor in the end-user, which is now changing. Reports suggest that if the web-user does not have some level of control over the ads they view, then they’re more likely to opt out of the ad ecosystem altogether. According to the findings by PageFair, most correspondents were willing to “renegotiate” their relationship with ads, given that there were provision for doing so. A smaller percentage refused to view any ads whatsoever.
These stats become this; 150 million internet users are using some kind of adblocking technology, which is a huge growth of 70% from last year. This number is set to increase as each generation of web-user becomes more digitally literate than the last. The questions raised by this new change in advertising-user relations involves the entire internet-media ecosystem, which since the late 1990s has been built almost fully on advertising revenue. As internet penetration reaches new heights year on year through mobile and tablet uptake, even with an expanding population to whom to market to, the future is not entirely bright for advertising (despite it arguably remaining the internet’s most dynamic industry.)
These results suggest that unless the industry acts fast to begin to include the web-user’s wants and need in the advertising-ecosystem, we may be seeing potentially damaging amounts of users quit the system altogether.
To view PageFair’s reserch on the rise of Adblokcing technology; “Adblocking Becomes Mainstream”; read the report here.
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