Revenue Struggles (And Monetization Solutions) In The Time Of Coronavirus
On April 30th, my company AAX partnered with the folks over at AdMonsters. Our goal? To talk a little bit about the temptation for publishers to fall into old bad habits during the unprecedented time of COVID-19…and, more importantly, to provide a few answers, some optimism for the future, and one sustainable monetization solution.
The result of this conversation, which was interspersed with thought-provoking questions from an audience drawn from all across of the adtech world, was a thorough investigation of what AdMonsters summarized as “re-engaging with the highly active, tech savvy and educated audience using ad blockers, while also examining what we can learn from ad blocking user behavior in building more user-friendly ad products and sustainable monetization strategies for a new digital media age.”
We’re going to recap some key takeaways for those of you who missed it, including some of the questions that came in from our audience. And, if you’re looking for more than the highlight reel, you can view a video of the entire webinar.
Check it out.
Q: Why do you say that publishers are tempted to fall into bad habits during the era of COVID-19?
A: The real issue here isn’t the temptation — brought about because Q2 revenue is down 30–50% and there’s real need for new streams — but why we classify these habits as “bad.”
Inserting more ad slots into webpages in order to compensate for falling CPMs directly affects your user’s experience. In turn, more intrusive ad formats on webpages have a known effect of lowering fill rates and eCPMs even further. This results in a few dire outcomes, with the end result being publishers losing their audiences. When users feel their experience is being cannibalized, they tend to turn their attention elsewhere.
And, if you needed another reason, the resulting supply/demand imbalance is the driver of ad blocking. Which brings us to…
Q: Why are ad blocking users such an interesting demographic for marketers?
A: The ad blocking demographic makes up the most valuable 20% of users. These affluent, well-educated ad blocking users purchase more digital content than their non-ad blocking counterpart.
And that’s just the tip of the iceberg. AAX compiled a study examining ad blocking users’ behavior — including their habits of brand discovery, workplace roles, ambition, and loyalties — available for free here.
What’s more, research shows they don’t hate all ads, only the intrusive ones. That’s why ad blocking users are the cornerstone of the monetization strategy: the Acceptable Ads solution.
Q: What is the Acceptable Ads solution, exactly?
To quote a groundbreaking study from the New Jersey Institute of Technology called “To Be Tough or Soft, Measuring the Impact of Counter- Ad Blocking Strategies on User Engagement,” the Acceptable Ads strategy is one that:
[…] shows users acceptable ads, agreed upon with the ad blocking companies, which appear in the page even when an ad blocker is active. Acceptable ads are generally less annoying ads, such as text ads instead of video ads, and also fewer in number.
The criteria about what makes an ad “less annoying” are set forth by the Acceptable Ads Committee (AAC for short).
Q: What is the AAC, and how does it work?
The independent, third party Acceptable Ads Committee is divided into three “coalitions,” which represent diverse voices ranging from digital rights organizations to researchers, pubs and content creators to users. You can learn more about the details of the AAC here.
Q: How many Acceptable Ads users are there, and what percentage of ad blocking users are opted into the Acceptable Ads program?
AAX accesses about 200 million global ad blocking users through the Acceptable Ads program. This is partially because of a massive sea change: ad blocking has become ad filtering, keeping Acceptable Ads on.
With 90% of ad blocking users agreeing with the statement “I don’t hate all ads,” it’s important to realize that ad blocking users have the controls. When they’re using an ad blocker they have the capability of blocking all ads, but the vast majority (95% of consumers using Adblock Plus, for example) opt not to.
Thanks for watching, and stay safe.