The Bright Side of Ad Blocking
We are slowly being overwhelmed by ads. Blogs, social media, websites, videos, mobile sites, apps and more all have the option to display ads, and most take full advantage of this. The more the Internet and digital products progress, the more ads are being displayed. The advertiser in me thinks that progress wouldn’t be so significant without the income from those ads though!
The new kid on the block: Ad Blockers
Ad Blocking browser add-ons and apps restrict ads from being displayed on your device. Actually, it even takes it a step further by never connecting the dots between the advertiser and the viewer so the ad never even gets the chance to display, so there is not a loss of resources.
Ad Blockers have been around for quite a while but have gained some steam lately in the eyes of the public. This has definitely been helped along by Apple’s decision to allow users to change their ad display settings on their mobile device so that they no longer see these (see more here). The fact that this move came from a major player in the mobile device and operating system industry is definitely causing a stir. When it was limited to smaller companies like Ad Blocker and others it wasn’t nearly as big of a deal.
Advertisers are running frantic now though and trying to get to the bottom of what this means for, well … their bottom line!
In order to better understand this, it is best to breakdown the exchange of ads and viewers.
Let’s use a cost-per-thousand impression (CPM) advertising model to explore this:
Example 1: CPM Value without Ad Blocking:
Advertiser pays a certain dollar amount for one thousand online and mobile impressions. These ads are displayed to everyone they choose in a certain target segment, including 100 impressions to people that find mobile ads intrusive.
What does this company gain?
They’ve got their product out in front of 1,000 people (potentially less based on duplicate views but we won’t get into that in this example).
Of these 1,000 people, they’ve just gained some ill-will from 100 people that can’t stand mobile ads. So not only did they pay 10% of their budget to serve ads into people that don’t want to see them and therefore will probably not even click on them, but they’ve potentially angered potential customers.
This situation shows that there is actually a lot for advertisers to lose.
Example 2: CPM Value WITH Ad Blocking:
Another similar situation, has an advertiser paying the same amount for one thousand online and mobile impressions. These ads are also displayed to everyone in their target market but in this example Ad Blockers exist and active mobile users that are put off by display ads can elect to no longer view them. So, since this advertiser is STILL paying per THOUSAND impressions, they then have the opportunity to show up to 100 more potential customers than in Example 1.
These 100 additional have the potential of reacting more favorably then those 100 that were forced, essentially against their will in the previous example to view an ad.
Now, it is possible that those 100 that were shown ads because others had blocked them from example 2 still may not want to view display ads. With that mentality, the entire 1,000 on the list may not want to; however, they are almost definitely going to react more favorably than the people that have gone out of their way and actively pursued not receiving ads.
Leave those people go and focus on the REST!
Complimenting Mass Data
All of the mass data that these Ad Exchanges have at their disposal is amazing and it really helps advertisers put their ads in front of the right people, in the right place and at the right time. Cookies literally stock people to make sure they get the ideal ads. Online behavior is translated into browsing patterns which are matched with ads. But that data only goes so far.
For example, viewers can click on Google ads to choose to no longer see ads from that particular advertiser anymore. This benefits advertisers in the same way as Ad Blockers. People have already embraced the former, so why not the latter?
Ad Blocking is really not that gloomy of an internet feature plus it is still very small. Potentially, it could be a problem once it grows for those serving ads in the future (hence the potential spiteful introduction of this to iPhone software).
And, if it ever gets to the point that it envelopes the digital plateau entirely then maybe I’ll have to correct this post. But at this time, it is not a problem.
What are your thoughts?