The ongoing race between ad blockers and ad tech: Who’s winning?

30-second summary:

• During the past seven years, ad blocking increased from 15,7% to 26,4% and this rate continues to grow.
• APAC countries block the most – 50% of ads, second-leading is MEA region with 49%.
• The greatest share of ad blockers is seen on desktops.
• Google starts its own ad-blocking initiatives to restrict annoying ads.
• In-game, native ad formats coupled with personalization may be potentially useful for the ad block problem resolution.

Online advertising brings profits to a large number of digital businesses, but it also supports informational resources, sponsoring them, and enabling users to access media content for free. At the same time, users are not always satisfied with a web experience continuously interrupted by ads. Today, in the U.S ad blocking penetration rate has grown from 15,7% to 26,4% over the past seven years.

“Ad blocking is killing advertising”, that is the first thought that may pop into your mind now. Indeed, everything is a bit more complicated, and the rise of ad blocking appears to be quite a fair response to a poorly thought out brand-user communication. So, how do advertisers and publishers come to terms with ad-blocking? Most importantly, what conclusions should they drive from this confrontation in order to safeguard revenues and ensure that their audiences stay happy?

Three main reasons why users embrace ad blocking

According to a study held by GlobalWebIndex in 2019, there are three main reasons why users block ads:

•     They are overwhelming (48%)
•     They are annoying (47%)
•     They are intrusive (44%)

The worst situation unfolds in APAC, where the percentage of users who use ad blockers accounts for 50%. MEA region follows with 49%, North America accounts for 45% of blockages and Latin America for 44%. The smallest percentage of ad blockings is in Europe, where it steadily accounts for 40%.

Device sharing among ad blockers shows that 60% of ad blocking happens on PCs and laptops (desktop environment), while only 43% happens on mobile (due to specifics of an in-app environment, which is not based on apps but instead on browsers). When it comes to content, APAC is a region that purchased 77% in 2019, followed by NORTHAM 65%, LATAM 63%, MEA 55%, and EUROPE 55%. Music streaming services and movie/TV streaming services represented the top two mediums where digital content was purchased most often. 

Such data makes one thing obvious: ad blockers have not emerged out of the blue. The demand for them is formed by users who do not want to interact with annoying ad messages. Meanwhile, media giants like Google invent their own ways of managing intrusive ads.

How Google joins ad blocking movement

Recently, Google has introduced its own methodology that will prevent the annoying ad formats from appearing on web pages. As well, Google started cooperation with the Coalition for Better Ads that developed best advertising standards based on user experience research spanning 45 000 people from eight different countries.

Starting from August 5, 2020, Google will start blocking ads that aren’t compliant to standards created by the Coalition for Better Ads. In total, the document includes 12 types of ads that users find annoying. Thus, publishers are encouraged to stop serving them on web sources before the standards are officially enacted.

Pro tips for advertisers: Think about your target audiences

Before launching an ad campaign, ask yourself whether the creative can engage your potential customers. When crafting an advertising message, consider every detail that can add information to the target audience portrait: media channels, age, and geolocation – then use this information to choose the right format.

Use likable, unintrusive or interactive formats

1. Try before you buy: Playable format

According to the data aggregated by SmartyAds, playable videos can generate ~10,5% CTR and ~9,600 installs per month. The playable ad is a short version of a mobile game that simulates the gameplay of an advertised app. After interaction with such ads, users are accustomed to advertising products (the game); thus, they are highly engaged and motivated for installation. 

2. In-game bonuses with rewarded videos

The rewarded ad is also a highly-engaging, in-game format that helps users to earn in-game bonuses in exchange for watching ad commercials. It can work virtually for any type of app, not only games: apps of different categories can offer users freebies, like closed content, free music listening, profile customization, etc. This is one of the most engaging formats that is characterized by the eCPM of $13.75 — $12.01 and CTR of five to 10%.

3. Go native for loyalty

Native ad formats, like in-feed ads, mobile web native ads, content recommendation widgets, and custom-designed units generate 40% higher CTR in comparison to other formats. Ingeneral, native ads are actively reposted and shared, since they contain useful information. These ads look like a part of the web content and normally generate higher loyalty since they combine advertising materials with valuable information: recommendations, topic-related advice, and more.

4. Personalize based on data

According to the stats, 83% of users have nothing against acceptable forms of advertising. Furthermore, many ad blockers do not ban ad content that meets the criteria of acceptable ads. Personalization based on user data, coupled with the right ad formats, creates something that’s called “acceptable advertising.” The user data (geo, location, behavior data, gadget, etc) is a key component that enacts targeting on a programmatic, demand-side platform. It helps advertisers reach target audiences at the right time, screen, and with a suitable message.

Although according to some reports, many people are worried about their data safety, most still favor an individual approach to advertising (72%). Some advertisers who want to save media costs, enter the market with their own white-label DSP solution. Others, meanwhile, create their own platforms in order to eliminate data risks and substantially extend targeting possibilities.

Pro tips for publishers: Keep track of your website performance

Sure, publishers are also concerned about the growth of ad blockers as they pose a threat to their content monetization. As a publisher, you can make sure that ads on your website correspond to the advertising standards and don’t annoy users. Try to stay balanced – don’t overstuff web pages with ads sacrificing user experience for higher yields. If you place inventory for per-impression monetization on supply-side-platform, use publisher controls to choose what kinds of ad formats, sizes, and ad resolutions you allow to display on your website.

Define formats that work for you

Carefully monitor the effectiveness of monetization on your website if you serve different kinds of ad formats at the same time. This will help you to learn which ad formats generate the greatest profits and user engagement.

Use Google advertising quality report

If you have doubts regarding the quality of advertising you are currently serving, Google recommends checking ads with an advertising quality report. This tool automatically detects whether your site contains ads that violate standards.

Launch content subscription

Subscribers actively purchase music, movies, and premium content. Apply the “no-ads” subscription model for visitors who buy a paid subscription and show ads to those visitors who use your service for free.

Takeaway

It’s understandable why people use ad blockers – they want to protect themselves from annoying advertising that interferes with site browsing, app gameplay, or content consumption. Sure, the industry is concerned about the rise of ad blocking, but the neglected user experience is a root of the problem, as practice shows. Use personalization, unintrusive formats, and meaningful, high-quality messages and your advertising will be effective and invincible to ad blockers.

Ivan Guzenko is CEO of SmartyAds. He can be found on Twitter @ivanguzenko.

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