Insights from Brendan Lattrell, Co-founder and CEO of Grapevine
According to a recent report from Adobe and PageFair, there are currently 198 million active ad blocker users around the world, and usage of ad blockers has grown by an astonishing 41 percent just in the past 12 months. I, like many others, recently installed an ad blocker because I simply can’t stand what’s happening right now. Ads are disruptive and intrusive to my online experience.
Along with consumer adoption of ad blockers, we’re also starting to see signs of other significant shifts in the market. For instance, mobile operator Digitel is blocking ads on its networks in the Caribbean in order to give “customers the best experience.” And they are not alone. Mobile company Three is introducing ad blocking to its UK and Italy networks in order to “give customers more control, choice and greater transparency over what they receive.” If these emerging models catches on with other mobile operators and spread to other devices, the implications are real – and scary – for digital advertisers.
Yet, the whole industry is grappling with the need to find a way to monetize content in order to survive. By looking back at a similar industry’s previous struggles, we can understand how best to move forward.
What’s Old Is New Again: TV and The Early Stages of Ad Blocking
The television industry quickly learned consumers don’t want to be bombarded with messaging they don’t care about after the introduction of VCRs in the 1970s and then DVRs in 1999. With these recording devices, consumers had the option to easily skip over unwanted commercials to watch the content they’re actually interested in – their favorite television programs. This forced the television industry to rethink their strategies for generating revenue from advertisers, who require effective ways to reach their target customers in order to validate the investment.
To address the changing landscape, new models emerged, from product placements to the disabled fast forward function in on-demand content. These approaches continue to evolve to this day as technology advances and consumer behaviors change in order for all the industry’s players to maintain a steady revenue stream.
Eliminate Interruption: Advertising to Diminish Impact of Ad Blocking
Ad blockers today demonstrate the very real potential for emerging technology to take the fangs out of display advertising, and create new, less disruptive strategies. For instance, the subscription, or pay-to-access, model where consumers must pay to see, hear or read content has become popularized with Netflix, followed by others like Vessel and, most recently, YouTube Red. All of these pay-to-play options give subscribers immediate access to commercial-free digital content. This model is reminiscent of television’s premium cable stations like HBO and Showtime, which cost the consumer extra money, but offers uninterrupted programming free of the standard commercial break system. There’s also the integration model, where brands are paying to integrate their product into the content. You only need to watch one episode of ‘House of Cards’ to see this in action.
Both of these models will only become more prevalent as consumers continue to reject interruption advertising, like pre-roll ads that run before video content starts on YouTube, and seek alternatives that don’t take away from a user’s experience. For instance, native advertising and branded content continue to be successful because the content is the commercial and viewers are genuinely interested in the product. With these new models, consumers are also taking action to see the content – from clicking on a hashtag to searching for a topic on YouTube to purchasing a subscription with Vessel – because it’s of interest to them. Influencer marketing is a particularly poignant example of this, and it’s targeted in the simplest of ways: it requires no advanced algorithms, behavioral analysis or cookies, which makes it a lot more transparent to consumers.
The reality is, interruption advertising isn’t sustainable, because by definition it takes away from the user experience. Advertisers simply need to find new ways to reach consumers. That’s why brands and influencers have been teaming up using the brand integration model (with great success) and are more recently testing the pay-to-play approach with companies like Vessel and YouTube Red. Just as these strategies helped TV survive video recorders, so too will they help the digital world thrive.