Is the Digital Ad Industry in Free Fall?
Getting real about the effects of ad blockers
Getting real about the effects of ad blockers
This is Part I of a three- (or maybe four) part series on the evolving digital advertising industry. Warning: This first installment may be disturbing for those who derive some or all of their revenue from internet advertising. But don’t despair, it gets better.
OK, consumers: We digital publishers have heard you. You hate our ads.
You hate them so much that you’ve enabled extortionists to block them and only run them if we publishers pay a “whitelisting fee,” or if ad blockers find our messages worthy of exception.
And many of us publishing execs are on the record saying we deserve this — not the extortion part, but the general disgust with user experience. We’ve saddled you with Popovers, Popunders, Takeovers, Retargeted ads, In-streams, Prerolls, Hovers, and display formats that are intrusive, sometimes creepy, interruptive, and that weigh down a page for so long you could run to the bathroom and come back still waiting for a page to load.
Some of us new content kids on the block have it easier — we are so new and agile and don’t have a massive following yet — we don’t need advertising, or even a business model. We were born viewable, mobile-ready, and don’t yet rely on spammy, fraud-ridden ad tech. We can experiment until our investors insist on a revenue stream or we reach Facebook-2009-levels of user adoption and buy ourselves more time.
But some of us older, legacy brands are kind of screwed. We can’t change our models on a dime, much as the networks are trying to by charging for streaming and on-demand. Some categories, such as online network news, are considered utilities, a fundamental right, like clean water from the tap.
But if the turmoil in Flint, Michigan, taught us anything it’s that nothing really comes for free. Even things you don’t think you pay for, you do. You must. Or you get really bad, stinky, lead-infused content, er, water.
Now, with our display ad revenues down, we are trying a plethora of ways to earn your trust back, to give you what you came for — quick, simple, access to our content. We’re trying to give you expensive, bottled water in the hope that you will stay. But in the end, we’re going to have to come to an understanding: Even free content ain’t free.
Consumers know this and have drawn a line between what they will and won’t pay for. And the folks who are getting paid for content often employ a “charge what you can get away with” strategy. (Witness my recent conversation with my cable company, when I called to reduce my monthly $175 cable bill and learned that I could keep my entire premium package and now pay half that, as well as reduce my bundled home phone line charge from $20 to $3/month — no harm no foul, thanks for calling.)
It’s unclear what the future of the ad blocker business model will be. Since they won’t charge their actual customers, they lean on publishers to pay their bills, and some publishers will pay their toll in order to make good on their ad commitments. Recent attempts by European publisher Axel Springer to shut down a prominent ad blocker were foiled in Germany, where protection of consumer experience is arguably more fierce than in the U.S.
Publishers have been blaming the ad blockers, and by extension ad exchanges and ad tech, for gunking up their pipes, but the more self-reflective ones are looking at themselves and asking the hard questions, like, “Do we want to be the site you go to for groundbreaking news/unique perspective/supreme user experience, or for accidental engagement with native ads that activate on a hover? Do we want to quench some misguided fascination with celebrities who died young, or aged too quickly, or do we want to be a place where users authentically engage with original content?
NEXT TIME: How publishers are reacting to the fallout; what you — the reader — can expect in the short and the long-term.
Originally published at www.linkedin.com.