Ad blocking is set to cost advertisers $41bn in paid-for ads that are ultimately never seen by their intended audiences, primarily due to the growing popularity of ad blockers, according to reports.
However, this is primarily the result of advertisers’ bungling attempts to win over audiences especially as user behaviour’s go multi-screen, says Facebook Atlas’ group head, and judge of The Drum’s Digital Trading Awards (DTA) this year Andy Mihalop.
Facebook’s latest quarterly results saw its quarterly revenues leap by over 50 per cent year-on-year, during the quarter, with over 80 per cent of total monies collected during the quarter generated by mobile ads.
Speaking with The Drum, Mihalop maintains the rise in ad blocking is a result of industry practices that have created a poor advertising experience for consumers, particularly the use of retargeting.
However, one method of stemming this tide is to use more data-led methods of targeting, especially on mobile devices, with GlobalWebIndex claiming the final quarter of 2015 saw a drastic surge in mobile ad blocking, and 37 per cent of device users now installing one.
“The rise in ad blocking is a result of industry practices that have created a poor advertising experience for consumers, particularly the use of retargeting,” says Mihalop.
He adds: “Identity will allow advertisers to address the challenges of cross-device measurement and targeting, therefore creating more engaging, timely and relevant advertising for consumers.”
The social network believes that puts it upon a pedestal when it comes to the targeting, execution, and reporting on such campaigns, given its wealth of logged-in user, or first party, user data that allows brands to better target their ads to desired audiences – a method commonly referred to as deterministic targeting.
Additionally, Facebook claims that its popularity on mobile devices, plus its refusal to shoe-horn ads on to mobile screens using outdated software techniques (i.e. cookies) is at the core of its success.
“As the consumer shift to mobile continues, the ability to measure and understand the cross-device consumer journey becomes a critical factor for advertisers and will increasingly influence digital media investment,” says Mihalop.
He adds: “Marketers need the ability to engage consumers with sequential storytelling across multiple devices with accuracy and scale. Media investment will flow to those companies that can provide marketers with scaled cross-device solutions.”
The fact that ad blocking is less acute a problem for advertisers is hardly news to the industry, as oftentimes if an ad is not served, then it is not charged for, making ad blocking a more pressing concern for media owners.
However, the more sagacious media industry observers will also note how the wealth of user data held by social networks such as Facebook, and other online media giants like Google, also places, places traditional media owners under pressure when it comes to their share of advertisers’ budgets.
Speaking at a recent event hosted in London, Mihalop’s colleague Damian Burns, the global head of Facebook’s Atlas, argued that “media owners don’t understand their audience”, adding that his company’s ad tech stack can “shine a light in this fog” through better audience targeting.
Although media owners beg to differ, Atlas employees are adamant that as media trading increasingly becomes driven by programmatic technologies (and fuelled by data) their wealth of data, and tech ecosystems make them the best place for advertisers to drive ROI for their media investment.
As programmatic buying continues to scale, publishers have been challenged with decreasing yields and an advertiser shift to audience based buying, according to Mihalop, asserting that brands are becoming more aware of the effectiveness and efficiency of programmatic advertising and the value of data, particularly first-party data.
He adds: “As programmatic buying continues to scale, publishers have been challenged with decreasing yields and an advertiser shift to audience based buying.”
The Drum's DTAs ceremony will be held on May 4, with the closure for entries scheduled for 12 February
The awards are held in association with The Trade Desk and sponsored by Audience2Media, eXelate, Integral Ad Science, Rubicon Project, Sphere DigitalRecruitment and TubeMogul.