Ad Blocking: What is it? What’s Happening and What Do We Do Now?

To distill the topic of ad blocking, below is a primer on the subject and how it may affect advertisers, publishers and tech companies.

Ad blocking is the removal of advertising content on websites via the user’s browser. It is facilitated mostly by installing a third party browser extension (most of this type of software is free). When a page is loaded on a browser (on desktop and mobile), the software determines what part of the page is content and what parts are ads – the ads are blocked by preventing the creative from being served.

Why people block ads

The most common reasons for ad blocking revolve around three aspects for Internet users.

Performance – loading ads on pages requires processing of data. With many ad units on the page (and possibility dynamic creative such as video, animation, etc.), more data is required to load the ad. This potentially creates a bottleneck that could slow the time it takes for content to load on a page.

Privacy – preventing ads to load also prevents ad serving systems from gathering more data on users about behavior. It’s as if that user loading a page didn’t exist because the ad serving system won’t be able to place a cookie on the user, nor determine if the user is someone the ad serving company has seen before.

Security – Ads can be manipulated by bad actors as a gateway to install viruses and malware on browsers. Ad serving companies proactively vet their advertising customers to weed out bad actors, but some make it through the review process and load malicious ads.

Ad blocking stats

Here are the facts according to the yearly PageFair (analytics tech firm) and Adobe annual ad blocking report:

• Globally, the number of people using ad blocking software grew by 41% from 2014 to 2015.
• In the U.S., ad blocking usage grew 48% -- which is 45 million monthly active users in Q2 2015.
• In the U.S., 16% of online population blocked ads in Q2 2015. State by state, Oregon’s online population had the highest blocking rate at 16.4%, with Washington, Vermont and Nevada not too far behind in percentage.
• Blocking behavior is a function of audience demographics and the most active blockers are likely to be young, tech-savvy men.
• Ad blocking on Chrome has increased at a higher rate than on competing browsers.

Mobile

While mobile web browsing activity is increasing (it was 38% of all web browsing in Q2 2015), a very low percentage of ad blocking happened on mobile (roughly 2%) – but that’s mainly a function of availability of blocking software. The recently released iOS 9 could increase mobile ad blocking because it supports ad blocking apps – Mobile Safari represents 52% of mobile browsing.

For users, the nuances of the mobile experience can make it more compelling for users to proactively block content. Less content to load means less use of data (which is finite for most users). Unlike desktop browsing, where the data pipes are wider and device computing power can load sites in a couple of seconds, the experience on mobile is more easily bogged down because of data being processed to load sites.

What happens when ads are blocked
Ad blocking software uses filter lists which can contain numerous page elements including ad serving domains that are commonly associated with companies that place ads (think ad exchanges or ad networks). The software identifies domains to block the ads coming through on sites. This includes ads served on display, video and sponsored content widgets.

Why you should care

If you are a publisher, you lose revenue opportunity – especially if you cater to the demo that has a high propensity of using ad blockers. The revenue impact from mobile users may be minimal right now because the bulk of overall revenue for most publishers come from desktop ads and because mobile ad blocking is still new.

If you are an agency or advertiser, you wouldn’t pay for an ad that was blocked. It’s as if the opportunity to serve an ad was never there. But if your service or product is designed for that demo that tends to block ads, your campaigns may experience lower scale. Because of this, you may need to devise other ways to reach and engage your target audience aside from paid media channels.

What we can do

Tactically, for advertisers, one approach is to determine if ad blocking may impact your media plan. If your core target is young men, you may want to consider ad formats or ad channels that cannot be blocked (page skins, sponsored content, SEM). Make sure you understand your alternative ad options.

Publishers are taking various approaches. Some are re-designing their sites to have less units that are susceptible to ad blocking. Some re-designs are focused on better/faster experiences for users to make sure they don’t even think about installing ad blockers. Other publishers are blocking content from users that have blockers installed. Some have proactively served messages to those users pointing out how ad revenue enables them to provide content for free.

Ad blocking is growing because users are dissatisfied with their Internet experience. They feel that ads clutter the content they want to consume, slows their productivity and exposes them to unforeseen dangers. Publishers can fix this by taking a hard look at their pages and determining if the backend technology and layout is fully optimized to give users a great experience. From the advertiser perspective, tech companies that facilitate serving ads (DSPs, exchanges, ad networks) need to be diligent about the quality (of the creative and the advertiser itself) that goes through their pipes. This is a shared problem in the industry and it is adding up because companies are serving tons and tons of ads -- to the point that users get fed up with our marketing messages. Let’s stop the ad blocking trickle before it becomes a deluge.