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By: SteelHouse

We’ve all heard the term, “quality over quantity.” It’s a simple concept taught to us in our formative years and can be applied to many things – the food we eat, the company we keep – and we all wish it could apply to Facebook comments. In a world where quality is constantly under attack, many have learned to not only embrace this concept but to actively defend it.

This same topic is under debate right now in the online advertising industry due to the rise of ad blocking technologies and the pressing issue of viewability. And it has gained momentum to the point that publishers and advertisers agree it needs to be addressed.

ad-blockers-adoption-growth-chart

Let’s start with the reason viewability and ad blocking exist to begin with: content. The amount of content on the internet is mindboggling. Between the beginning of the Internet (1984) and 2003, five exabytes of content was created. Fast forward to 2013 where five exabytes of content was being created every day – that’s a huge increase in what is out there for people to view. This translated into almost unlimited opportunity for online advertisers to reach their audiences. And they have been taking full advantage of that opportunity every chance they get, creating what is now an ad-filled user experience.

Surprising to no one, people to want to access content as quickly and easily as possible. Cue the craving to watch the latest “Icelandic Craft Beers” episode or cat video on YouTube without having to wait for an ad to be served – and there you have it: Ad blocking is born.

Ad blocking technology has been around for over a decade, but the number of ad blocking users is on a major upswing. According to an August 2015 report from PageFair and Adobe, the number of ad block users has risen to 198 million globally, which equates to 6% of all internet users. Of that, the U.S. accounts for 45 million – 16% of all U.S. internet users.

Now let’s answer the question we know you want to ask: What is this costing advertisers and publishers? According to eMarketer, the U.S. saw an estimated $5.8 billion of blocked revenue in 2014, with a projected $10.7 billion in 2015, and $20.3 billion in 2016.  So will advertisers continue to pay so much for advertising space, knowing that it has the potential to be blocked? Combine that with advertisers’ already existing concerns on viewability, and the answer could very well be no.

Viewability refers to ads that are seen by a site visitor – and not hidden by ad blockers, below the fold, or not given the time to load. In order for a display ad to be considered viewable, over 50% of the ad needs to be in viewable space for at least one second. For video, 50% of it needs to be in view for a minimum of two seconds. Right now, ads are sold and charged to advertisers when they are delivered, not necessarily if they are seen. This is what we all know as the CPM model, where advertisers pay for every one thousand impressions. But as competition for space and cost of ads increase, some advertisers have had enough and want publishers to guarantee that 100% of the ads they sell are being seen.

economic cost of blocking adsIn reaction to the demand for viewability, top online advertising trade organizations decided to make “viewable” ads the standard. To enforce this, the Media Rating Council accredited 15 third-party vendors to measure and track viewability. However, this carries its own set of problems. The first is that it is very difficult to determine whether a human actually saw an ad or not – the ad may have been on screen, but the user may not have looked at it. Or it could be the impression was actually served to a bot crawling the page. The other problem comes with the discrepancy in metrics. If a website publisher employs one vendor and the advertising company another, you have findings from two sources with no common ground.

So in an ironic twist, we are somewhat blind when it comes to reports on viewability. The tracking companies are only able to analyze up to 80% of an ad’s inventory, with most between 60% and 80%. In other words, when an advertiser sees their viewability report, chances are it’s missing up to 40% of the original ads to analyze. The reason viewability is hard to track is because no surefire technology exists to do so. The technologies and techniques that exist now are inferior to what the market demands, and carry a number of issues — it could be (but is not limited to) a measurement vendor’s technology being set up in a way that does not recognize all ad layouts, different browsers loading content differently, or sites changing their ad placement layouts which affects historical data.

That’s not to say the industry hasn’t made attempts to make up for the lack of clarity when trying to optimize for viewability – unfortunately, these carry their own issues. Pre-bid optimization for example, where inventory is typically marked as viewable or non-viewable, is supposed to give advertisers a sense of how viewable their ads will be. The problem with this is not all inventory gets flagged, which leaves a lot of viable inventory off the table and impacts reach since non-flagged inventory goes unused.  Data has shown that in some instances reach can drop more than 30%, resulting in a similar drop in conversions.  Until pre-bid technology is able to mark more, or ideally all inventory, it is not an effective way of optimizing for performance.

But is all of this really addressing the right issue? Should we be discussing ways around ad blocking, or should we be more focused on why this technology is being used in the first place? Chris Innes, SteelHouse’s Chief  Monetization Officer, recently addressed the issue by stating, “The industry is having the wrong conversation. Instead of focusing on different ways to combat blocking technologies and optimize toward viewability, the conversation needs to be focused around creating a better user experience. People are blocking ads as a result of too much interference with free content. Publishers are over monetizing their content to make more money, but advertisers only want to pay for ads actually seen. Advertisers aren’t as committed as they should be to serving relevant content. As a result, the entire industry is beginning to lose money.”

So what’s the solution? The answer follows the age-old rule we began with: quality over quantity. Publishers and advertisers need to join forces to build an ecosystem that generates revenue while giving the end user the best possible experience.

Innes agrees, “Eventually this is going to happen – it’s just a question of when. It can either happen now or after the industry takes some massive hits to the wallet. If this industry can build technologies that use artificial intelligence to power campaigns, why can’t this same space redefine advertising?”

So heed the call, advertisers of the world! There will always be new ways for users to avoid ads; we need to make it so that users don’t need to block ads to enjoy their content. Don’t just fight to work around ad blocking or demand viewability for your ads. Reach out to your web publisher and figure out how to create a user experience where these issues no longer matter.