More than 50 percent of millennials use ad-blocking software, according to Oxford University’s Reuter’s Institute. More than 200 million people in the U.S. have internet browser extensions that block the majority of pay-per-click and display advertisements. This is bad news for the online publishing industry, which derives 85 percent of its revenue from advertising. But it’s also worrisome for small business owners, who are now facing the dual challenge of diminished ad reach and higher marketing costs.
Understanding ad blocking’s appeal
Using ad blockers can make surfing the internet a profoundly more satisfying experience, particularly for mobile device users. Forbes magazine reports that with ad blocking enabled, page size drops by 44 percent and load speed doubles. This is very important to customers who keep an eye on data costs. After all, nobody wants to pay money to be shown ads.
Additionally, ad blockers appeal to people who are worried about online security. Ads have often been the delivery mechanism of malware; eliminating the ads means potentially eliminating the risk of infection. Some malware ads contain scripts that have been used to gain access to users’ personal information, putting them at risk for identity theft. Furthermore, the New York Times has reported that using ad blockers extends a mobile device’s battery life.
However, not everyone is using ad blocking. Todd Bairstow of Keywords Connect, a performance marketing company, says that while younger people have embraced the technology, older people have not. “Local advertisers aren’t going to see this as such a large problem because they are looking to reach a much more geographically targeted audience,” he explains, “and that’s most often done through search and SEO.”
Ad blocking technology impacts many types of ads, including pay-per-click and display ads, Facebook newsfeed ads, Google AdWords, Bing advertising, and more. Determining how much money you want to invest in ads that may never be seen is a very real question. Google has addressed this for its AdWords platform by offering a Cost per Viewable Clicks option (vCPC); the costs for keywords can be slightly higher with this option, but advertisers have the assurance of knowing the ads they’ve paid for are actually viewable.
The impact of ad blocking on programmatic advertising, such as remarketing ads that appear on a customer’s search engine results after visiting a retailer’s website, is still being determined. Being white-listed—deemed ‘acceptable advertising’ which is displayed to people who are using ad blocking technology—can come with a cost. The world’s largest brands, including Google, Amazon, and Microsoft, reportedly pay a premium to make it past AdBlock Plus. However, this costly option isn’t available to the typical small business owner, who must find another way to get their message out.
Business owners may have an unexpected ally in their efforts to be heard, according to Bairstow. “I can’t believe that Google isn’t actively seeking to solve the ad blocker problem. When companies weren’t sure their competitors weren’t sitting down and clicking on their Google ads, Google saw that issue and immediately set its brainpower to solving it, and largely did. I’ve got to believe they will do something similar with ad blocking.”
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