“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Victor Malachard, CEO at Byyd.
In what many regarded as a litmus test for the advertising industry, a court in Germany ruled last month against two publishers, Die Zeit and Handelsblatt, which claimed Adblock Plus was an illegal and anti-competitive practice. The court found for the rights of consumers to switch ads off if they wanted.
Another German court then found in favor of Adblock Plus, this time against broadcasters RTL and ProSiebenSat.1. The IAB followed with statement warning of the potential to “suck the oxygen out of the marketplace.” In a case that turns on the rights of consumers, advertisers and publishers, it would appear the courts favor the consumers. Meanwhile other commentators, such as Josh Speyer of AerServ, side with the marketers, believing ad blocking is akin to theft.
My belief is that both publishers and advertisers have rights too, and there are steps they can take right now to address ad blocking. Meanwhile this is an industrywide issue, potentially contravening net neutrality principles, which all parties need to start thinking about.
The Right To Monetize
Publishers have direct relationships with consumers, in terms of what they display and what consumers see. Publishers clearly should have the right to show whatever they want on their site, including content, comments and commercials, so long as it’s legal.
But for publications, it’s not so much about their rights as what they absolutely need to survive. Many sites rely on advertising for their primary source of revenue. In mobile, advertising supports the entire app ecosystem. Without it, these millions of apps would simply not exist.
There’s a cultural element that publishers could consider addressing. The value exchange – that is, giving something to receive something in return – is the essence of monetization. Publishers and consumers could strike a deal, where if consumers want to see content, they must also see the ads that support the publishers.
The value exchange is apparent in the mobile world. There is a general acceptance that you can get a free app that is ad-supported or pay for the ad-free version. So mobile publishers have less of a cultural challenge than desktop, where people are used to surfing largely for free, with the exception of some paywall-protected sites, such as The Wall Street Journal, USA Today and The New York Times.
Desktop publishers could address this through education. They could appeal to users not to block ads, making it clear that the ads they see actually help keep the site online. Or, they could promote ad-free membership via subscription.
There’s also a nuclear option open to desktop publications: They could refuse to show content to those who are using an ad blocker. This would make the value exchange more clearly tangible. The message would be loud and clear that if you’re not going to see our ads, we’re not going to show you any content in return.
As well as the cultural awareness around the value exchange, mobile publishers have somewhat less of a technical issue here, too, since ad blockers only work on mobile websites, not apps. This is important because 86% of mobile users’ time is spent in the app environment, according to Flurry. So ad blockers only affect what a typical mobile user sees 14% of the time. Mobile app publishers and developers can breathe easy.
The Right To Advertise
In the same way publishers should have the right to display what they want, especially if it keeps them solvent, then advertisers should have equal right to appear online.
Again, as with publishers, advertisers that go mobile have less of an issue because ad blockers only affect mobile web ad slots, not in-app slots. Ad blockers are not a problem if they specify to their tech partners that they only want to advertise in-app.
Advertisers embarking on desktop-based promotions can get some intelligence as to whether they’re being hit by ad blockers. They can check the demographics of the audiences they’re reaching to see if there is a dip in segment of 18- to 29-year-olds, who are the most likely to use ad blockers. That may provide some evidence that the audiences that visit the publications where they’re advertising are using ad blockers.
If advertisers decide to take action, they need to act fast because the millennials are a huge generation, with influence over other generations and potentially more buying power than any generation in history. This is where ad blocking can really hurt desktop ad campaigns because millennials represent a disproportionately large amount of the revenue.
The Right To Be Recognized
Apart from that, all desktop advertisers can really do is wait and see how the debate pans out. At the heart of their right to be seen online is the net neutrality principle, which recognizes the rights of all participants’ data to be treated equally on the Internet.
This becomes especially relevant when you consider that network operators are considering using ad blockers, which could stop ads from appearing across all inventory, including desktop, mobile web or mobile app. Ads are data. Blocking ads means you are blocking data and breaking the net neutrality principle.
Would consumers prefer ad-free sites, that their favorite ad-supported sites disappear or network operators decide what they will and will not see? I’m fairly certain these are in order of preference, so if we accept that consumers may not like ads, I expect they’ll like a decimated ecosystem or arbitrary censorship even less.
So what will they like? I would suggest an approach that balances the rights of consumers to consume, advertisers to advertise and publishers to publish. This, as the IAB states, will come about through negotiation and partnership.
So let’s talk, not block.