In fact, it seems to me that someone could make a killing by developing an app that blocks articles about ad blocking.
So now I’m going to contribute to the glut. But my real point is that ad blocking isn’t, or shouldn’t be, publishers’ highest-priority threat.
I’m not denying that ad blocking is a serious problem. There’s a raft of alarming statistics from which to choose, including the widely covered global Accenture study that found that 61% of consumers are aware of ad blocking options, and 42% say they’d pay to eliminate advertising interruptions.
As MediaPost writer Tobi Elkin recently noted, this would lead one to venture that people should be willing to pay publishers for valued content. She expressed support for a concept advocated by Ben Barokas, CEO of Sourcepoint, which created a platform that gives users a choice of compensation methods, including opting into ads and/or cookies, or paying for content. Human psychology-wise, providing a measure of control does seem to make sense.
Still, in my view, publishers that invest in producing original, quality content and are still letting large numbers of users access all or significant amounts of that content free simply in return for not blocking ads are missing the boat anyway.
If many more legitimate publishers bit the bullet and required some level of (easy-to-transact) consumer payment, they’d undoubtedly lose some traffic and advertising in the short term. But a consistent, widespread paid-content stance would retrain consumers to understand that it costs money to create compelling, trustworthy content – including content for entertainment purposes.
If that reasonable point were driven home and backed by no-nonsense, well-tested pay-to-play models, consumers who seek out that content (as opposed to crap sites) would learn to accept paying some reasonable amount for it. Case in point: People.com is, I’m sure, advertising-driven, but it also puts some content behind a paywall. In addition to all-access digital-plus-print annual subs, the site has a $6.99-per-month offer for either all-access digital or the print magazine only. Time Inc would not have those standing offers on the site if they didn’t work. Meanwhile, The Wall Street Journal not only charges $350 per year for a digital subscription; it also forces paid subscribers to turn off ad blockers to access the content. (Rupert has never been accused of lacking cajones.)
Importantly, now that advertising’s influence on in-store sales can be tracked, not just upscale brands, but even mass CPG brands, are starting to be willing to pay higher rates to reach more targeted audiences that are actually likely to buy their products. In fact, some – like Bonnier’s new programmatic director – believe that programmatic ad buying’s evolving targeting capabilities will turn that technology to the advantage of publishers with engaged communities.
If there’s a potential upside to ad blocking, it’s that it may finally force publishers to rebalance business models to reduce dependence on the advertising stream. That and the possibility that ad-blocking will help speed the demise of click-bait sites that exist on ad dollars won strictly on the basis of huge traffic numbers.
Hit by a juggernaut
Which brings us to the dynamics that pose potentially bigger threats to quality sites, as well as junk sites: the hijacking of audiences and advertising by third-party juggernauts. A recent New York Times article offered an in-depth, eye-opening exploration of the situation, and I would urge you to read that piece.
The crux is this: “Online publishers have faced numerous financial challenges in recent years, including automated advertising and ad-blocking tools. But now, there is a realisation that something more profound has happened: the transition from an internet of websites to an internet of mobile apps and social platforms, and Facebook, in particular, is no longer coming – it is here. It is a systemic change that is leaving many publishers unsure of how they will make money.”
It continues: “Audiences drove the change, preferring to refresh their social feeds and apps instead of visiting website home pages. As social networks grew, visits to websites in some ways became unnecessary detours, leading to the weakened traffic numbers for news sites. Sales staffs at media companies struggled to explain to clients why they should buy ads for a fragmented audience rather than go to robust social networks instead.” And the kicker: “In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook,” said Brian Nowak, a Morgan Stanley analyst.
Publishers who have turned over their content distribution to Facebook Instant Articles and / or Apple News would be well advised to pay close attention to Mark Zuckerberg’s brazenly open goal of doing everything possible to “keep people inside Facebook’s world instead of following links out”. As the article points out, many publishers now get more than 40% of their traffic through Facebook, and many are seeing sudden, large drops in that traffic.
One more quote: “The sheer speed with which Facebook, Twitter, Google and Snapchat have come to dominate the landscape has taken publishers by surprise.”
Another fundamental shift that should make publishers more determined than ever to lessen dependence on print and digital advertising: Last year, those two categories of measured advertising combined garnered 25.2% of total US marketing expenditures. Meanwhile, spending on “brand activation” – which includes relationship, influencer, promotional, content, experiential (events) and retailer marketing – rose 5.5%, to account for $560B, or 59.8%, of overall marketing expenditures, according to an Association of National Advertisers report.
Savvy publishers are already developing or acquiring activation marketing assets and capabilities. Sounds like the faster they do that, the better.
