Will Ad Blocking Be The New Napster?
Apple has basically failed at the ad business and they are trying to ruin it for everybody else.
Google owns the web. Facebook owns the social. Apple owns the phone. That has been the technology world order for a while.
Now that order is about to shake.
The discussion about ad-blocking has been a hot topic, because the new iOS 9 has ad-blocking features for Safari mobile browser. The strategy for Apple is simple. This is full-frontal attack towards Google. Google hosts majority of the ads in “the normal web” with other Apple rivals like Facebook and Microsoft. Apple does not play the browser ads game. However they are serving ads in iOS applications that they not “surprisingly” block. Also conspicuously Apple launched their news service at the same day as it allowed ad-blocking.
It remains to be seen how things escalate, but the following three things are certain:
1. Widespread ad-blocking will kill publishers
The casualties of war between Apple and Google will be the content publishers. They are already losing $22 billion of revenue this year because of blocking of the ads. If content publishers are not serving the ads for the content you are consuming, they are not getting paid. If you are not getting paid eventually you go bankrupt. As the piracy shows people do not really want to pay for content, so advertising has been the only way to bankroll the content production. Only 11% in US and 6% in UK have paid for online content. So subscription model online does not really work, although people are advocating for it. Even creator of popular ad-blocker Peace, pulled the ad-blocker from App store because he had regrets:
Achieving this much success with Peace just doesn’t feel good, which I didn’t anticipate, but probably should have. Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit.
Not all of the creators of ad-blockers have surely similar regrets. Even without Peace, ad-blockers have been the most popular paid apps in the new iOS 9.
2. Generally online ads have been of bad quality
Ad-blocking is already more prevalent than ad-skipping on television. Ad industry should take some responsibility of the horrible, low quality and invasive display advertising as well. Advertising in web is democratic, which is great to certain extent but also has been the core problem. When amateurs do, it is quite often amateur quality. In TV there has at least been some quality (of varying degree and based on channel).
As people have not noticed online ads, they have become more and more invasive and making the user experience worse. Even people from the industry are skipping the ads. Therefore I actually believe more in longevity of pre-roll advertising format than the banner on the long run (although I still think there is much room for creativity when doing banners). Nevertheless, both of these can be blocked so you don´t need to necessarily endure either.
3.Traditional online ad industry will face the same future as music industry
If ad-blocking will become the norm that will essentially kill the display advertising, as we know it. We can debate whether it was good or bad, but essentially Napster and then after the legal counterpart iTunes and Apple Music killed the music industry, as we knew it. Today´s music business is much more nimble and record labels are playing lesser role than before. Music has not disappeared anywhere though.
Killing the category is only lucrative for the killer. Apple has been the giant killer many times (helps when you are giant yourself), so I doubt that they are hesitating in trying to bring competitors (namely Google) down by any means necessary. For the consumer the fall of online ad industry does not really sound too bad. Generally all of the people (hell, even publishers) find ads annoying. Expect that those annoying ads pay for the content production online like mentioned above (and print media is almost dead already). In every change there is opportunity for innovation. Pagefair is actually serving “non-intrusive ads just for your ad-blockers”. Talk about contradiction in terms.
Modern digital marketer has to follow closely how the situation with the ad-blockers will evolve and act accordingly with your media mix. Native advertising will seem likely winner in this new era. Will that result in better content or just more bad editorials? My fear is the latter.
By the way, I don´t block ads. Maybe just to show solidarity to publishers and to be true to my profession. On the other hand I don´t tolerate sloppy and invasive ads either. We need to improve so that people would not want to block those ads on so alarming pace.
Originally published at standupstrategy.org on September 23, 2015.