Are Websites Killing the Golden Goose?

Consumers’ voices too seldom heard, industry groups confused

A golden goose egg?

Website publishers are fighting against user perception that ads are intrusive, following them around, and too many in number. Many are opting out of the online or mobile ad experience and installing ad blockers. How much of this is the fault of the publisher, the adtech companies advising them how to increase ad revenue, or the demands of publishers? Who is standing up for the user experience? Are there any formal or informal guidelines? How many ads per page are too many? More than that, does adding more ad units to a page increase revenue, since you’re splitting the user’s attention — short-term and long-term?

Most online advertising is direct response

While many advertisers (notably most video advertisers) are paid on a per-impression basis, meaning as long as (someone’s adserving) software says “the ad was served”, a majority of digital advertising (per the IAB) has a performance component to its pricing that directly or indirectly penalizes a website for less performance (clicks, sales, filling out a lead form etc).

Source: IAB.com

A publisher may get an immediate revenue bump from adding another ad unit to a page, but longer-term advertiser performance often suffers when extra ad units are added to a page. I’ve seen this as an advertiser and as a software company powering advertisers. And according to the former CTO of AppNexus:

Back in the Right Media days I did a test with a publisher where we saw that days 1–30 revenue was up, days 31–90 revenue was flat and days 90+ revenue was down when the # of ad units went from 3->5 on a page.

Mike Nolet, “Header Bidding: The publisher revenue optimization dilemma

Few formal guidelines exist. The online advertising trade group, the IAB, said as much in a mea culpa (“We messed up”… twice) October 15, 2015, asking for “leaner” advertising, and that “we must address volume of ads per page as well as continue on the path to viewability”. “Viewability” (advertisers aren’t sure anyone is seeing their ads even though they’re paying for them) seems like one of those problems that only exists because you’re trying to shove lots of ads onto a page, doesn’t it? This “We Messed Up” mixed message was released just before the IAB trumpeted record digital revenues, by the way. Confusion and disarray is shown in passages like this one (my bolding):

L.E.A.N. Ads do not replace the current advertising standards many consumers still enjoy and engage with while consuming content on our sites across all IP enabled devices. Rather, these principles will guide an alternative set of standards that provide choice for marketers, content providers, and consumers.

By the way, something I do enjoy are these ridiculous AdChoices videos, but probably not in ways the the IAB would like. Especially this one, which certainly has the entertainment value to deserve more views than the 4300 it has so far.

Ever seen more than one “large” ad unit on a page?

The biggest ad network around, Google, asks publishers to refrain from having too many ad units per page (although some publishers may have ad units from multiple ad networks/partners that don’t by themselves violate those requirements but together would). Google says: “Publishers may not place more than one “large” ad unit per page.”

Take a look at this recent desktop video scrolling down a page on Forbes.com — they have quite a few large ad units on the page. Could one argue that they’re just keeping an ad unit in view on the page when the user is scrolling down? Perhaps — but you’d obviously (as the advertiser or their agency especially) want to understand how/if they’re charging the advertiser for those views or not.

It is always worth asking the question as to how sales and ad operations people at websites are compensated — to try to figure out if there are incentives that overly bias action towards near-term revenue versus long-term brand/revenue concerns.

Is ad overload driving consumers to adblockers?

It seems that there are many reasons consumers are blocking ads. Most surveys asking about adblocking are not conducted using nationally representative or online-user audience-representative samples, and they have a variety of questions some crafted with language crafted (it seems) to elicit a particular type of response.

For example, a survey by Broadband Genie found that 43% of users find mobile ads more annoying than desktop ones, and 59% thought ads pose a security threat. On the other hand, several analyses have focused on retargeting (now employed by the majority of enterprise marketers) as something that is in effect flaunting the use of consumer data and shoving it the user’s face. Excessive retargeting ads being shown to the user was called out as a concrete example by the IAB in the aforementioned mid-October 2015 release (covered here by Ars Technica).

Industry groups such as the IAB and others have not taken the leadership role they could (and should) have, and continue to deliver mixed messages to the marketplace. Randall Rothenberg, head of the IAB, said on September 22nd:

“As abetted by for-profit technology companies, ad blocking is robbery, plain and simple — an extortionist scheme that exploits consumer disaffection and risks distorting the economics of democratic capitalism. [But] when implemented by consumers, ad blocking is a crucial wakeup call to brands and all that serve them about their abuse of consumers’ good will.”

It’s time to start having an honest conversation about the future of advertising, and most importantly, to let the consumer’s actual voice be heard (and not just inferring their feelings by the increasing use of ad blocking software).