Mobile Trends

Acceptable Ads in a Post Ad Blocking World

For a long time now, advertising has been accepted as the inevitable cost of accessing content. Whether it be the 30 second TV slot or the ubiquitous banner on a website, consumers have had no choice but to accept the status quo – until now.  What happens when the balance of power starts to shift ?  If consumers were suddenly placed in a position of power, would they continue to accept advertising, even if it meant their favourite publishers would go out of business?  The ad industry is about to find out, as an increasingly disillusioned audience embraces ad blocking technology. We explore the impact of ad blocking on mobile devices, and consider how advertisers should respond in light of this unprecedented shift in the balance of power.

Australian audiences find advertising more intrusive than their global counterparts and would be willing to pay to eliminate advertising, according to a survey from Accenture.  In light of the growing dissatisfaction with advertising, it’s not surprising that more than half of global respondents to a HubSpot survey have installed an ad blocker or plan to install one within 6 months.  Millenials are adopting ad blocking faster than any other demographic, and the most popular ad blocker app, Adblocker Plus, has reached 300 million downloads worldwide.  Audiences in Australia, NZ and the APAC region are slightly behind the rest of the world, with lower install rates and overall awareness of ad-blocking methods than the global average, but the shift towards greater consumer control of advertising is inevitable, and it’s happening fast.

APAC Audiences have High Expectations of Advertisers

Although local audiences are less aware of ad blocking techniques, that doesn’t mean they are more tolerant of advertising than global consumers.  In fact, a report by Unruly which polled 3,200 consumers worldwide, found that Southeast Asian (SEA) consumers are less tolerant than the broader market. In the SEA market, 77% said they would mute video ads and 45% expressed negative emotions towards brands that forced them to watch pre-roll video ads.  This is even higher in Australia where 65% feel negatively towards pre-roll video and 68% expressed the desire to control video ads themselves.  When Unruly asked online audiences across the APAC region if they would consider using ad blockers, 90% said yes.  It won’t be long before the trend has well & truly landed here.

86% of consumers find advertising too frequent and 76% said it doesn’t match their personal interests.

It’s no surprise that consumers are not enamoured with advertising, but until now there has been a level of acceptance of ads; they were considered the inevitable cost of access to content.  So what has pushed consumers over the edge?  According to the Accenture Survey, 86% of dissatisfied consumers find advertising too frequent and 76% said it doesn’t match their personal interests. Advertisers are talking to a new generation of empowered and demanding consumers with high expectations of relevance from their digital platforms.  The HubSpot survey found that 80% of SEA consumers are leaving websites because of interruptive online ads and Unruly found that 85% of SEA consumers would lose trust in brands that produced ads that didn’t feel genuine. Consumers no longer see ads as a necessary evil.  An untargeted, irrelevant ad is seen as a wasted opportunity.  Consumers have higher expectations of authenticity and relevance than ever before, and they’re willing to block anything that doesn’t meet their expectations.

Ad Blocker Installs

 

What is Ad Blocking and How Does it Work on Mobile?

Although Ad Blocking on mobile is currently limited to ads served in a mobile web browser, this can’t be taken as a given for the long term. Ad blockers use software to automatically remove or change advertising content. When a consumer downloads an Ad Blocker app, it works by identifying ad content being served into the mobile web browser and replacing it with something else, like white space or pictures of puppies. One of the main reasons mobile Ad Blocking has only just become a big story is that, until recently, it wasn’t possible to block ads at all on Apple devices. However late last year Apple updated their Operating System to allow ads to be blocked in both its Safari browser and within apps. This was big news, particularly for the mobile advertising industry, but shortly afterwards Apple reversed part of this decision, removing apps that block ads in other apps from the app store, citing a privacy risk.  That means –  at least for the time being – neither Apple nor Google allow apps in their stores that interfere with other apps’ functionality.

At least for the time being – neither Apple nor Google allow apps in their stores that interfere with other apps’ functionality.

On mobile devices, ad blockers tend to focus on display ads such as basic banners, popups, pop unders and anything that actively interrupts the mobile browsing experience.  Usually ad blockers will remove any ad that requires the user to click a tiny, hard to find X to close it down. Ad Blockers don’t target native ads in social media, pre-roll video ads or sponsored content.  They don’t target ads in mobile apps or advertising that is not considered disruptive.

We’re At The Beginning of an Unprecedented Shift

Unruly APAC boss Phil Townend thinks we’re hurtling towards an ‘ad-pocalypse’.  His response, and that of many others, is that brands need to create more engaging, targeted, relevant and personalised advertising so that customers won’t want to block ads. But is it too late? Have we gone too far down the path of disruptive, interruptive, annoying and irrelevant ad content? Are consumers really going to give ads a second chance?

Consumers have higher expectations of authenticity and relevance than ever before, and they’re willing to block anything that doesn’t meet their expectations.

The Telco Response

Some of the industry’s biggest players are working to take this decision out of the hands of consumers. Around the world, mobile telcos are negotiating to install ad blocking software at the network level. In theory, this means the entire customer base of a Telco could have ads blocked from any mobile web browser. Three in the UK and Italy have signed on with ad blocker Shine and the UK business is planning a trial in June 2016 in which they’ll deploy network level ad blocking for a test group of customers for 24 hours. Globally telco customers have embraced these trials, while locally, Australian telcos are adopting a ‘wait and see’ approach. Telcos in the broader APAC region have also held back from engaging in these discussions, but local brands and advertisers need to be prepared.  MediaMath CMO Joanna O’Connell warns that consumers will catch up faster than marketers. Certainly consumers are attracted to models where Telcos remove data charges for advertising or in some way incentivise them to accept the advertising that currently churns through their data limits.

Ad Blocker and Advertiser Negotiations

The world’s biggest publishers and digital media players are scrambling to stake their claim, even negotiating with a small number of aggressive Ad Blocker startups, who have emerged as unexpected power-brokers.Some of these larger Ad Blockers have been able engage the biggest digital players in negotiations, resulting in an unprecedented shift in the balance of power.   Already Microsoft, Amazon, Google and around 70 large advertising companies have paid the most popular Ad Blockers to whitelist their own ads. There are even rumours that Google paid an Ad Blocking company $US25 million to ensure their ads were unblocked.  But with ad blocking technology moving quickly, and minimal barriers to enter the market, it doesn’t seem likely that these deals will set the scene for any long term position.

Forbes Ad Blocker

Forbes were early to test asking consumers to turn off ad-blockers.

The Publisher Response

Publishers hold some of the most powerful cards.  It’s their content that draws and attracts customers, and it’s their decision to serve advertising on their platforms  If consumers begin abandoning content because of advertising, publishers will need a different business model.  What will publishers need to do to convince their customers to accept advertising?  Forbes was among one of the earlier publishers to run anti-ad blocking trials online, barring customers from access if they had an ad blocker installed.   A group of French publications also recently ran a series of trials preventing customers from accessing content unless they turned off their ad blocker or whitelisted the site. Some of the publications offered incentives, while others simply blurred out content from customers with ad blockers installed. The publishers saw between 20 – 50% success rates for whitelisting and, although these were just temporary trials, they plan to continue testing these approaches as ad blocker use intensifies. The very foundation of the ad funded content model is under challenge and the answer will come down to what consumers are willing to exchange for content.

The Emergence of Acceptable Ads

So where are we heading in the next few years?  Will the world’s publishers hold their customers to ransom, insisting they accept frequent, annoying, untargeted, messages from advertisers? Will Ad Blockers hold the advertisers to ransom, demanding increasingly larger pay cheques to whitelist their ads?  How long will advertisers be able to keep selling solutions to brands that irritate and annoy the brand’s customers, the customers of the publishers and the customers of the ad blockers?  The answer of course, is not much longer!  While all of these scenarios are being explored as we speak, publishers, advertisers and ad blockers will all lose business unless they can find common ground with consumers. The ultimate solution has to involve the concept of  ”Acceptable Ads”.

Publishers, advertisers and ad blockers will all lose business unless they can find common ground with consumers.

Acceptable Ads will become the bedrock of the advertising industry.  It’s understood that Google is exploring the development of an acceptable ads policy, suggesting they intend to create an industry standard for ad formats. Wherever and however the standard emerges, gradually all of the major players will adopt a variation on an acceptable ads policy.  Publishers will insist on acceptable ads on their platforms.  Ad blockers will offer customers an opt-in for acceptable ads and intuitive whitelisting arrangements in partnership with publishers. Unacceptable ads simply won’t be welcome within these arrangements.  Over the coming months we’re sure to see a hotly contested debate about what constitutes an acceptable ad. We don’t know where this will end up, but one thing is certain – it’s likely to be a positive outcome for consumers.

We already have a pretty good idea of what consumers want; relevant, authentic ads that don’t appear too often or interrupt the content experience.  Mindshare APAC’s chief digital officer, Sanchit Sanga said of mobile video advertising that:

“Relevant, targeted, native and contextual video

which doesn’t disrupt viewing patterns

will be the mainstay for successful video delivery.”

Contextual relevance is increasingly important. Consumers expect content to be appropriate to their immediate context; time of day, day of week, what the weather’s like, where they’re standing and what they’re currently looking at online. Consumers also expect advertisers to know something about their tastes and interests. Something, but not too much. Unruly’s report on SEA Consumers found that 67%  find ads that follow them around the internet creepy. This is higher than the global average of 63%.  Even though consumers have high expectations for ads to be relevant, targeted and appropriate to their context, they are turned off by the creepiness of stalker-like ads. Creepy is not acceptable. They want you to know them and seduce them, but not go so far as to stalk them.  It’s a fine line between appropriate targeting and stalking, and brands need to tread carefully as they explore this space.

The APAC Future Video Manifesto produced by Unruly and Mindshare warns against interruptive ad formats that get in the way of consuming content and annoy customers. Core to the advice is to create mobile advertising that is personal and relatable. Another top tip from the manifesto is the value of introducing shareability to ad content. If mobile videos and other forms of rich mobile ad content are presented in a sharable format, they will be further distributed through personal networks. Once advertisers reach the right subset of targeted consumers with authentic, powerful content – content that creates an emotional connection – consumers reward them by sharing, bypassing ad blockers and distributing ad messages with the added layer of trust inherent in social recommendation.

Future Video Manifesto

The Unruly / Mindshare Future Video Manifesto

 

Where to Next for Brands and Advertisers?

A recent report from eConsultancy found that 72% of Australian Marketers think the rise of ad blockers will render display advertising completely obsolete in the future. Our local marketers think people based advertising is the way forward and that the smart use of data will be key.  According to the report, 2/3 of Australian Brand Managers agree that display will be replaced by relevant, data driven advertising and 61% of brand owners and media buyers are already using first party data to create sharply targeted and personalised ads.  The ground is shifting beneath traditional advertising and brands need to speak the language of data or become irrelevant.  To deliver people based advertising you need to know an awful lot about the people you want to reach.  It’s no longer enough to throw out enough messages in the right general direction and wait for the numbers to add up.  Today it’s consumers who set the bar for acceptable ads.  Advertisers will need to use all the data at their disposal to create relevant, targeted, authentic messages that consumers want to see.  Anything less than that is unacceptable, and unacceptable doesn’t cut it anymore.

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