Ad Blockers and the Evolution of Paid Media

The rise of ad blockers will transform the landscape of digital advertising, says Walter Delph, Partner and Managing Director at BCG Digital Ventures Manhattan Beach.

The days of indiscriminate, unavailing digital advertising are drawing to a close, ushered away by ad blockers and a new era of high-quality, targeted advertisements built on a foundation of consumer trust.

To fully understand the impact of this shift on the publishing world and the broader media industry, I should first explain the quagmire that has become digital advertising. In some ways, paid media was the media industry’s answer to dwindling readership and the knowledge and information offshoot of the digital economy. What was expected to challenge the high cost of print advertisements, increase ad exposure to a widening audience of Internet users and improve tracking has quickly soured in the face of reality.

It’s also harmed the relationship between the media industry and consumers, who are tired of sorting through a barrage of irrelevant digital ads on their favorite websites (not to mention the fact that all those ads increase our data usage and potentially impact the speed and cost of our mobile connectivity). In the case of the mobile phone, the most personalized consumer device ever, consumers’ expectations for better ad units have been underwhelming. What’s more, thanks in part to the ad-spam culture, a huge portion of online advertisements are completely overlooked.

Consumer annoyance is one thing, but ad functionality, visibility and fraud are something else entirely. There is a sinister presence in the digital advertising space, and it has set the stage for the transformation to valuable and creative paid content. A host of companies have already recognized this sprawling consumer dissatisfaction and the deep flaws within the digital advertising industry and responded with effective, impactful ad blockers.

There’s Adblock Plus out of Germany, who (despite several lawsuits from German publishers) continues to empower users to block ads from websites unless they have the service’s permission. Apple has also joined the ad blocking movement with the Safari 6 AdBlock extension that banishes advertisements from web pages, and it is just a matter of time until we see ad blocking extend across all Internet browsers.

If you’re in the media industry, you’ll understand the panic about ad blockers. A loss of advertising potential has significant financial implications on the entire paid media system. At first, consumers will likely find themselves banishing most advertisements and reveling in a junk-free information zone. As a result, the digital advertising industry will need to reinvent itself, and fast.

This evolution in paid media will be a cornerstone event for digital advertising in 2016, and media organizations and advertisers should recognize the opportunity for creativity and exploration offered by this shift. It’s not a doomsday scenario. In truth, the commercial advertising sector faced the same situation with the advent of the DVR. New technologies and services will continue to force inefficient and complacent systems to adapt, and it’s time to bring next-wave content to digital advertising. Unsuccessful companies who ignore the swift technical realities will continue to put their heads in the sand and focus on short-term aid like cost cutting.

The successful media organizations will work to reestablish trust with consumers, who will then willingly turn off their ad blockers in order to view rich content in exchange for limited, targeted advertisements. Adblock Plus has already moved in this direction by allowing users to “white list” ads that follow a set list of guidelines, including a lack of animations, sounds and pop-ups that cover content, and this process will be commonplace in future generations of ad blockers.

By the end of 2016, high-quality and trustworthy content will gain space in the digital advertising market, and it’s about time. After all, consumers don’t mind advertising; they never have. They mind bad advertising that isn’t targeted to their needs and preferences, and I, for one, welcome the transformation sure to come in the landscape of paid digital media over the next year.

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