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News

‘The stakes are super high’: Publishers at SXSW discuss the linear, creeping threat of ad blocking

Publishers are fearing that ad blocking’s slow but steady growth could eventually pose a real threat if concrete steps aren’t taken to resolve the ongoing issue.

Speaking at SXSW at a panel called ‘Ending the Ad Blocker Wars,’ CEO of premium publisher trade association Digital Content Next (DCN) Jason Kint said that “the stakes are super high” when it comes to the rise of ad blocking.

“80% of our membership’s revenue comes from advertising,” he said. “The challenge this issue presents is that it is a consumer-driven issue. It’s growing linearly and it’s creeping over time. It’s not really hitting the economics in a significant way yet, but it will if we don’t do something about it. And our industry doesn’t deal well with linear problems, frankly.”

David Grant, director of content strategy at The Christian Science Monitor, said during the panel that somewhere around 20% of Americans use an ad blocker on their laptop or desktop computers. At The Christian Science Monitor, he said about 17% of its audience comes to the site using an ad blocker.

“If you think about those numbers in comparison to the total number of Americans that pay for digital news online, that number is nine percent, about 30 million people. So there’s about twice as many folks running ad blockers,” he said.

Ad blocking has become a growing concern in recent years among publishers who depend on digital advertising revenue. People are increasingly downloading the software to avoid things like disruptive auto-play videos, ads that block content and slow loading pages. According to eMarketer, about one-quarter of US internet users were using ad blockers by the end of 2016. The firm predicts that three in 10 will be using blockers by the end of 2018.

However, recent data has shown that the threat of ad blockers may be overblown, or at least not as dire as once predicted. Marketing research firm eMarketer recently scaled back its estimates of ad blocking usage in the US - after stating last year that ad blocking usage could top 86 million in 2017, the company reduced that number to 75 million in February.

“Publishers’ efforts to restrict content to those with ad blockers enabled seems to be working,” eMarketer said in its revised report. “And some publishers have made a conscious effort to switch to less intrusive ad formats.”

Even so, Kint said that the problem “is not in any way solved” and said that he thinks it is “continuing to get worse.” Meredith Kopit Levien, chief revenue officer of the New York Times, said that she thinks the very concept of ad blocking threatens free press.

“Original journalism is hard to make, it is expensive, and requires expertise. I think anything that compromises the funding of that is a problem,” she said, adding that she thinks “the public doesn’t always understand how journalism gets made.” She noted that the New York Times’ recently-launched brand campaign aims to educate the public about the importance of quality journalism.

While consumers may be at fault for downloading ad blockers, Kopit Levien said that the industry’s messy Lumascape is also to blame since many of the players within it don’t have consumers’ best interests at heart.

“In digital advertising, there are too many ads. There are too many bad ads. There are too many players in between the people who make high quality original content and marketers. We need ad tech, but we don't need that many players standing between marketer and publisher,” she said. “The aspiration at the Times is that our user experience and our ad experience, the totality of the the product experience and the ads within that, be at the caliber of our journalism.”

Since the New York Time generates more of its revenue from its subscriptions than advertising, Kopit Levien said that the publisher puts a lot of thought into user experience and how ads are served since many of its readers are paying customers (last year, the New York Times announced its plans to roll out an ad-free digital subscription option for subscribers).

When it comes to dealing with ad blocker users visiting The New York Times’ site, Kopit Levien said the publisher has been experimenting with different methods over the past year.

“If a subscriber wants to use an ad blocker, we might think about that differently than somebody who is not a subscriber,” she said. “We’re in the midst of testing different approaches.” She said that they’ve tested both “soft block” and “hard block” approaches, the former being a plea to turn off ad blockers and the latter being a cutoff of content.

Kint said that eight of DCN’s 80 members are currently employing techniques to try and discourage the use ad blockers on their sites. While these measures are important, he stressed that publishers should first try to understand why consumers are utilizing the technology in the first place and should work to clean up their ad experiences before trying to convince users to turn off ad blockers.

Source: The Drum