Ad blockers will destroy the advertising industry. Ad blockers will not destroy the advertising industry. Researchers and industry experts are unable to agree on the impact of ad-blocking software on the digital ad ecosystem. What's clear is that the ad industry must provide better consumer experiences or risk becoming irrelevant.Advertisers and publishers have a lot to worry about these days. From ad fraud to viewability standards, determining whether an ad reached its target audience is already tough. Consumers installing ad blockers on their mobile devices and desktop computers is the ad industry's latest headache.
Ad-blocking software applications have been around for several years but were not widely installed. Ad blockers gained new momentum, however, with the release of Apple's iOS 9 which supports ad-blocking technology, and the launch of the AdBlock browser on Android earlier this year. Both make it easier for consumers to install ad-blocking software on potentially billions of mobile devices.
While most ad-blocking technology applies to Web browsers, native app ads aren't safe, either. A new app called Been Choice recently appeared in the iTunes App Store. Its creators claim Been Choice can block ads on native apps, including Facebook's app and Apple's News app, as well as sponsored posts and pre-roll videos like those in news apps.
Estimates of how much ad-blocking software will cost the ad industry in lost revenue widely vary. In August, Adobe and PageFair released a report that said the use of ad-blocking software would cost advertisers and publishers more than $20 billion this year and could reach $40 billion by 2016. UBS Securities conducted its own research and said the cost of ad-blocking software is closer to $1 billion.
Regardless of which report is right, the ad industry can't afford to ignore the fact that it must do a better job of engaging consumers. Advertisers shouldn't be surprised that there's a growing demand for ad blockers, noted IAB President and CEO Randall Rothenberg at the IAB's Mixx conference last week. "Consumers are tired of pages loading slowly with badly designed ads," he said. "Consumers are installing ad blockers to simplify the clutter and speed up the Web."
Rothenberg called on advertisers, publishers, and vendors to give consumers a reason not to block their ads. "Consumers deserve great content and great advertising," he added.
It's unclear whether ad blockers will lead to a substantial amount of lost revenue, but rather than wait to find out, brands should take the initiative and deliver better experiences. Far too many mobile ads for example, are intrusive banner ads or pop-up ads that make consumers feel like it's still 1994.
In the age of empowered consumers, keeping the customer experience in mind is critical, agreed Jeff Marcoux, CMO lead for worldwide enterprise marketing at Microsoft. "We're seeing this shift in advertising where companies are finally paying attention to the customer experience," he said. "If they don't, they're going to get disrupted as we've already seen with other industries."