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Why ad blocking software won't spell the death of online advertising

By Geoff Gower | executive creative director

July 3, 2015 | 5 min read

A recent report from the Internet Advertising Bureau (IAB) revealed that 15 per cent of British adults online are currently using ad blocking software. The study, conducted by YouGov, also showed that the two most likely motivations for blocking ads were because they were “annoying” or “interruptive”.

Geoff Gower

It would appear, then, that people must detest online ads; but should online marketers and publishers be concerned? Now that Apple has given the green light for ad blocking software on its devices, is this a sign that ad blocking software has the potential to kill off the online advertising market?

So long as people get free content, People will tolerate online ads

In all honesty, it would be a gross exaggeration to declare the death of online advertising due to the proliferation of ad blocking software, or people’s annoyance with online banners. Contrary to the IAB report, a study last year from PageFair and Adobe found that the number of users installing ad blocking software equated to only 5 per cent of the internet population. Apple’s announcement might increase those numbers slightly, but the damage to the online advertising sector will most likely be incidental.

Having said that, should brands that rely heavily on the web to advertise be concerned that people are choosing to ignore their ads? The answer is yes and no. It is hard to ignore the fact a good percentage of the click-through rates on banner ads are accidental. Rich media, such as online video ads, can easily be ignored and retargeted ads that follow users across their web journey are grating.

Despite the potential irritability of ads on the web, people are not actually that bothered by them. In my opinion, many users view them as a necessary evil for accessing free content instead of having to fork out money to bypass a pay wall.

Creativity and engagement

People will tolerate an advert interrupting their web experience if it engages them. In the IAB findings, just 52 per cent of those surveyed said their main motivation for using ad blocking software was to block all ads. Some people used the software to block certain types of ads or block ads from appearing on specific websites rather than all ads everywhere.

According to research from coull.com, click-through rates for display ads on mobile was only 0.35 per cent. Although mobile banner ads are performing better than their desktop counterparts, it is not by much. And who really wants to spend their time doing something that works 0.35 per cent of the time?

Notably, the same research claims that the click-through rate for video is actually 11 per cent. Although it is difficult to measure what percentage of mobile users can actually recall the adverts they see without insight from a focus group, it demonstrates that people engage more with richer creative content.

This is an indication that people will not completely ignore a mobile advert if it is visually engaging, but they disregard an ad if it fails to be captivating, useful or entertaining.

The onus then is on mobile marketers to up their game. First and foremost it is not enough for mobile content to simply be platform specific; it has to be the type of content that people want to actually watch. This may seem obvious, but mobile marketers can become so embroiled in the technicalities that the creative becomes an afterthought. It is counterproductive for mobile marketers to haggle for the best banner ad position on a publisher’s website if the creative, in whatever form, is poorly executed.

For publishers, there are other ways to generate revenue

All of this discussion around the uptake of ad blocking software is not only worrying mobile marketers – online publishers will be feeling apprehensive too. As previously mentioned, online publishers rely on advertising for survival but have realised that this is ultimately unsustainable. Instead, some publishers are establishing paywalls as an alternative method of generating revenue, but many publishers will have a hard time convincing people to pay for the actual content that they have always had for free.

So, if ad blocking software is a threat, albeit a small one, and people are less likely to pay for content, then how can publishers generate revenue without relying on online advertising? One popular strategy often used by publishers is reselling customer data to third parties. Affiliate marketing is another strategy that publishers have resorted to.

Ultimately though banner ads are one small and fairly dispiriting option for brands online; the existence of ad blocking software should only help to encourage better, more interesting work that doesn’t have to be squeezed into a paid ad spot. I don’t want to use the C word but you know what I mean.

Geoff Gower is executive creative director at ais London

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