by Matt Kapko

Why the ad industry will never win the war on ad blockers

News Analysis
Jan 28, 2016
Consumer ElectronicsInternet

The head of the Interactive Advertising Bureau came out swinging against ad blockers this week. Instead of even attempting to fairly distribute blame for the chaotic state of the ad industry, the executive pointed his finger everywhere else but at IAB members.

interactive advertising bureau iab
Credit: Matt Kapko

PALM DESERT, Calif. — A “flamboyance,” or a large group, of pink flamingos this week greeted guests as they approached the Interactive Advertising Bureau’s (IAB) Annual Leadership Meeting, an industry event for marketers, publishers and ad tech providers. The resort’s bucolic grounds and peaceful surroundings, however, was more like a mirage than an appropriate backdrop for the battle cry the group used to kick off the event.

President and CEO of IAB Randall Rothenberg delivered a fiery opening speech that called ad blockers enemies and demonized companies such as Adblock Plus, which he boldly called an “unethical, immoral, mendacious coven of tech wannabes.” 

For more than a decade, advertisers and publishers have had to contend with different ad-blocking technologies, but recent mobile variations gained new levels of traction when Apple started to allow such apps in its App Store and amidst growing consumer backlash against intrusive or misleading ads

Ad blocking apps and algorithms are “stealing from publishers, subverting freedom of the press, operating a business model predicated on censorship of content, and ultimately forcing consumers to pay more money for less — and less diverse — information,” Rothenberg said. 

Consumer rights groups support ad blockers and user choice

The unfortunate truth for advertisers, brands, publishers and developers that make money off ads is that much of the negativity in the market is directly related to their own missteps, according to privacy experts and consumer advocates interviewed for this story. Bad advertising is as much to blame for the rising threat as anything else, they say, and ad blockers are merely a symptom of a festering ad industry disease. 

“IAB has failed to set reasonable advertising standards, which is precisely why ad blockers have grown in popularity,” says John Simpson, privacy project director of Consumer Watchdog. Simpson supports the use of ad blockers and says many consumers use them because of “privacy concerns, as well as the invasive and obnoxious characteristics of so many ads.” 

Lee Tien, senior staff attorney with the Electronic Frontier Foundation (EFF), a digital consumer advocacy group, doesn’t think advertising is inherently bad and says EFF isn’t opposed to ads. However, the group is very much against many of the data mining techniques in play today. “I really don’t see how ad blockers subvert freedom of speech,” he says. “Is it meaningfully different from skipping commercials, whether by muting and leaving the room, or by using your DVR to fast forward?” 

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Netflix and premium channels should prove to advertisers that people place a high value on the ability to avoid ads, and some are willing to pay extra for the choice, Tien says.

Rothenberg strongly disagreed at the IAB event, saying ad blockers “indiscriminately obstruct” everything from “vital political opinions” to “other intelligence necessary for the functioning of democratic capitalist societies.”

IAB admits it lost track of user experience

On the flip side, the IAB CEO also suggested ad block tech may ultimately help the market. “Ad-block profiteers have done this industry a favor,” he said. “They have forced us to look inward — at our own relentless self-involvement — and outward, to the men, women, and children who are our actual customers.”

Rothenberg referenced a mea culpa issued by IAB’s senior vice president Scott Cunningham last October, in which he admitted advertisers and technology providers had collectively “messed up” and “lost track of the user experience” amidst rapid changes throughout the industry.This crooked path led the digital ad industry down a “headlong rush to subvert industry standards” and eventually “lock out competitors in the $600-billion global ad industry,” according to Rothenberg.

“The result has been breathtaking innovation — but also suffocating chaos,” he said. “Multitudes of could-be formats and wannabe standards crowd screens, interrupt consumers’ activities while impeding the delivery of desired content, create supply chain vulnerabilities, generate privacy concerns, and drive fears about data security.

Rebecca Lieb, an industry analyst and advisor, believes the diminishing efficacy of online display advertising is at the core of this issue. “Consumers aren’t willing to accept the bargain they’ve struck with traditional media: you get content if you consume ads.”

Ad blockers funnel money away from publishers, but people knowingly use the technology because online ads are so disruptive, repetitive and unappealing, Lieb says. For this reason and others, every brand executive Lieb recently interviewed for research on the topic said they plan to cut back on traditional advertising and focus more on content marketing in controlled media channels and on social media.

Stubborn advertisers drag their feet as consumers push back on bad ads

People want experiences, not just poorly targeted ads, according to Lieb, and they don’t want ads to hinder those experiences. “They want to be addressed on their terms, with content they are interested in,” she says

When ads appear on smartphones, for example, they cover large amounts of display space, which means it takes users more time to find the information they want. In situations such as this, advertisers completely ignore the concept of user experience, according to Tien.

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The advertising industry could earn some much-needed goodwill if it just stuck to a “Do-Not-Track” standard, according to Consumer Watchdog’s Simpson. “Simply honoring Do-Not-Track requests, which all browsers can send, would go a long way toward restoring the industry’s credibility,” he said.

However, advertisers don’t want to hear that their current methods aren’t working. “A core message, one that’s politically very, very difficult to deliver to an audience of ad tech companies and publishers — the IAB membership — is, ‘Your baby is ugly,'” Lieb says.