With the adoption of mobile devices growing twice as fast as the global population, 2/3 of the world population will own a mobile device in only 4 years. In 2020, more people will have mobile phones (5.5B) than electricity (5.3B), running water (3.5B), and cars (2.8B) – how crazy! How has this affected advertisers’ ability to market to users in this on-the-go mobile world?
Consumers are savvy
Consumers now have the ability to block advertisers from tracking their online habits and even serving them ads.
TUNE’s mobile economist, John Koetsier, surveyed almost 1,000 smartphone owners in the U.K. He found that ad blocking installs are growing rapidly, with downloads spiking 3x in the last three months of 2015.
What TUNE found was that consumers are happy to spend money on gaming apps they enjoy but they don’t want to spend their hard-earned wages on paid content. Consumers are willing to pay to avoid mobile app ads, but the amount they’re willing to give is significantly less than the revenue publishers make with ads — less than 9%.
Only 21% of consumers would pay to block ads
Worldwide mobile ad blocking installs grew three times in the last quarter of 2015. TUNE research suggests a little chunk of every age group is blocking ads. Teens are least likely to block ads, while women tend to block ads less than men. On average 28.6% of men report having installed more ad blocking apps, compared to 22% of women. In the U.K., 27% of people admitted they’ve installed ad blockers on their smartphones. The typical user to install an ad blocker would be a middle aged male, on their Android in the U.K.
Industry commentary on ad blocking
“Irrelevant and excessive mobile ads annoy customers…” Three U.K.’s CMO Tom Malleschitz told Three.
I agree with Malleschitz and find ad blocking comes about from badly placed or untargeted ads. Others call it laziness, bad sources of traffic, or shoestring budget advertising. The more unengaging, badly-sized, or cheap-looking ads people see, the more tired they become of them. Ad networks, agencies, and traffic partners should be seeing this as opportunities.
I believe investing more time getting direct relationships with advertisers, and less with middlemen, brokering deals from other networks, the more traffic partners can understand their client’s target audience. This will result in ad networks creating more targeted and exciting ad types consumers will engage with. In turn, this will lead to less users installing or using ad blockers. At the end of the day, consumers don’t want to pay for content.
In TechCrunch, AOL CMO Allie Kline expressed that it’s still early for the ad tech industry to grapple with the mobile’s rapid growth.
“ … while I think it’s absolutely an issue we need to address and spend time on, I also think we need to give it the time to do that. We need to be really careful about the thoughtfulness and investment we make to right-size how we fund content,” Kline said.
I’m not sure I agree with Kline here. I think this creates an opportunity for traffic partners (networks, agencies, and publishers), to come up with ways to market content to mobile users in a way that they don’t hate. It’s something advertisers will never have time to address and so traffic partners need to step up and create these solutions.
The price of ads
Are you as a content reader aware that ads fund free content? Less than half of British adults are aware that ads fund free content. Only 44% of British adults online are aware that most websites are free thanks to advertising revenue, according to an IAB report. Men (52%) are more likely to be aware of this than women (36%), and 18-24 year olds (59%) more so than people over 55 (36%). TUNE’s research study found that nearly 80% of UK consumers wouldn’t want to pay for content.
Google’s Benjamin Faes, MD, media & Platforms, argued at MWC that ad blockers risk the free content ecosystem and blocking all ads is “diminishing” the overall experience. He also pointed out that four of the top 10 videos on YouTube in 2005 were ads.
I don’t think there is anything to worry about for European publishers and advertisers about ad blockers, but I do think there need to be advances in ad types and better targeted ads. Traffic partners can put an end to the intrusive unengaging ads. They can do this by creating new ad types, use more sophisticated technologies to track and collect as much data as they can from ad performance to then better target their users, using this big data collected in more real-time, using programmatic solutions with more relevant and delightful creatives.