As Ad Blockers Proliferate, IAB's Rothenberg Tells Local Publishers to Stick to Their Guns | Street Fight

As Ad Blockers Proliferate, IAB’s Rothenberg Tells Local Publishers to Stick to Their Guns

As Ad Blockers Proliferate, IAB’s Rothenberg Tells Local Publishers to Stick to Their Guns

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Ad-blocking software has been around for a while, but you’d be forgiven for not having heard much about it before the media industry’s collective freak-out over the past year. That’s because ad blocking has hit a kind of tipping point, as more consumers are finding out about and downloading these apps, the ad industry has been publicly wringing its hands about what to do about them.

At Borrell Associates’ Local Online Advertising Conference today in New York, IAB president and CEO Randall Rothenberg gave an overview of the threat posed by ad blockers to local media companies, as well as some prescriptions about how these technologies can be combated.

“Ad blocking represents the new normal in the media industry,” said Rothenberg, And if present trends continue, ad blocking could soon “surpass 50% on most sites.” He suggested that the proliferation of ad blocking is a result of an imbalance in power that has developed over time in the online media industry

“Over the 20-plus year history of the open web, in our industry … we’ve just let the balance of how we interact with each other get out of whack relative to what users expect of their own experience,” he told the audience of media executives. “Beginning with marketers, there is an extraordinarily high degree of ignorance of how Internet technologies work,” he said. And so marketers ask their teams to optimize campaigns in ways that have a significant negative impact on the user experience.

“Consumers are acting rationally,” he said, noting that the number one reason they use ad blockers is virus protection. They also believe that ad-loading slows down page loads, and that these slower page loads decrease battery life and increase data usage.  And by and large they are correct, said Rothenberg.

At the moment, ad blocking is largely restricted to mobile and desktop web browsers like Safari and Chrome, but Rothenberg warned that the technology soon could be extended to mobile apps and video as well — especially as more “cord-cutters” move their classic television consumption to IP-based delivery environments.

The real problem, he said, is that ad blocking harms everyone — including publishers, marketers and consumers. Rothenberg listed five reasons why this is the case:

1.  Reduces inventory (and while the impact varies by demographic, it generally skews young and male)
2.  Increases discrepancies being reported by each ad server.
3.  Increases expenses.
4.  Reduces audience value.
5.  Reduces consumer choice and increases consumer costs, threatening media diversity.
He also noted that ad blocking has “gone corporate, with extortion as its business model.” Mobile phone carriers like Digicel are using blockers to try and force big media companies to reach into their pockets and pay up. Ultimately, he said, there are a lot of big technology companies battling over their revenue.    “Publishers and consumers are left with the sword hanging over their heads.”

Rothenberg had a few strategies for how publishers could combat ad blocking, saying it is their “absolute right and obligation as professionals” to do so:

1.   “Pay the ransom” he said facetiously, noting that this was “not a terribly viable strategy.”
2.   Ask users to subscribe if they use an ad blocker.
3.   Deny entry to people who have ad blockers on.
4.   Install ad recovery software to unblock the blocked ads.
5.   More and more “native” content-based advertising.

David Hirschman is a co-founder at Street Fight.