Can ad-blocking threaten the $1 billion industry for online political ads?Zach Montellaro

This article is from the archive of our partner National Journal

It seems like a perfect match: Campaigns are desperate for cost-effective ways to get their message to voters; the websites those voters visit are desperate for ad revenue to stay afloat. And it’s a lucrative combination—the 2016 presidential contenders alone are expended to shell out $1 billion.

But that big-money marriage depends on viewers actually seeing the ads that campaigns have purchased, and thanks to ad-blockers—cheap (or even free) software that screen out ads without viewers ever seeing them—that’s no longer a surefire proposition.

For campaigns, the prevalence of this software raises a troubling prospect: What if they’re spending big on Web ads to reach a certain audience, but that audience is automatically tuning them out? And for websites and ad makers looking to cash in on those ad-buys, it creates a challenge: How do they convince buyers to pay for space on their sites knowing that some users will be able to filter it out entirely?

“I think it is something everyone needs to be concerned with,” said Matt DeLuca, vice president of digital strategy at Engage, a digital agency that creates and distributes ads for their clients. “To just write it off, I think, is just negligent to the client.”

The number of users alone makes ad-blocking software difficult to ignore: A report released by Adobe and PageFair, a company that works to replace ads blocked by ad-blockers, found that ad-blocking is being used by 45 million Internet users in the United States alone.

A report from the Reuters Institute for the Study of Journalism, based out of the University of Oxford, paints an even bleaker picture for American advertisers and publishers: 47 percent of American Internet users in their survey reported regularly using ad-blocking software to screen out online ads, and roughly three-in-10 will “actively avoid sites where ads interfere with the content.”

So what are the industries’ players doing to ensure the ads they’re paying for are getting viewed?

For one, the Media Rating Council, a coalition of media organizations, and the Interactive Advertising Bureau, a trade association for online advertising, have set a standard for what exactly a “viewable impression” for an ad on a website is.

The IAB’s website describes a viewable impression for a desktop ad as “50 percent of [the ad’s] pixels are in view for a minimum of one second” while allowing for variations depending on the size of the ad. For desktop video the standard is 50 percent of the ad is viewable for at least two seconds.

From there, first-party verification systems owned by advertising platforms like Google and Facebook and third-party services—like comScore, Nielsen, and Moat—measure what percentage of the ads served are actually viewable impressions.

“Almost every single verification service will run in two ways," said DeLuca. "One is they’ll run with the ad on the computer or mobile device to make sure the page and the ad show up, that there’s nothing in front of it or behind it, that there’s nothing funky going on. The other thing that will happen is they keep a running list ... of publishers, IPs, computers, vendors, networks, and anyone who has had any problems in the past” with viewable ads.

With a combination of the verification running on top of the ad and the whitelist, the services allow advertisers to be able to see what percentage of their ads are actually viewable impressions and which are potentially fraudulent—either blocked by an ad-blocker or avoided in some other way, like malware hijacking ad space. The reports also tell the advertiser how many of their ads were viewable and if people hovered over the ads or clicked through the ads.

These verification services will also turn to the advertising networks, which are either an individual site selling its own ad space or a third-party service like Google’s DoubleClick selling ads on a group of sites to make sure advertisers get the viewable impressions on their ads.

“They’ll be running either in front of the advertisement," said DeLuca. "[Some services offer] pre-bidding, where I can say: ‘Hey, before you go on and buy this bid, make sure it is on a viewable site against a viewable computer. If it is, you can go buy it. If not, don’t buy it.’ Others offer post-bid, which is, after the fact, you’re able to say, ‘Hey, I’m not going to pay for this impression,’ and negotiate with the ad network to give you a comparable impression that is viewable.”

Companies aren’t just tracking the prevalence of ad-blockers, they’re also trying to find ways around them.

To capture that audience that is slipping through the ad-blocker-created cracks, companies are changing their business models to encompass other methods that go past the traditional banner and pop-up ads. Advertisers are increasingly turning to mobile to reach potential voters. And while there is an ability to block some ads on mobile devices, it does present prime real estate for advertisers.

“If you look at mobile devices and the majority of ads served, some of them are browser-based," said Jim Walsh, the CEO of DSPolitical, a progressive ad firm that focuses on voter targeting. "But most of the ads served on mobile devices these days are actually on apps. There’s very few that allow you to block ads within the apps, and otherwise, you have to pay for that app. As long as people are forced to see ads inside their apps, rather than pay for the app itself because it is a free app, I’ll always be able to serve ads there.”

Posting “organic” content on social media is also growing avenue to reach supporters, where people can see content published by a campaign that they follow or see content their friends have shared, which has a more effective reach than traditional paid advertising would.

“Facebook and Twitter are still going to be good channels along with LinkedIn and others,” said DeLuca. He also said that “video has a role to play,” while noting video ads are a place “where people can get pretty annoyed, especially if it is autoplay with sound on. That’s literally the worst experience any human can have.”

DeLuca also pointed to sponsored and native content as other ways to reach online consumers, as long as there is a clear definition between advertorials and editorial content.

“It is the classic ‘If a tree falls in a forest and nobody is around to hear it, does it make a sound?'” said DeLuca. “The simple answer is: I need to make sure it is making a sound.”

Ad-blocking isn’t going anywhere anytime soon. The 2015 PageFair report found that ad-blocking has grown 48 percent in the United States in the last year alone, leaving both publishers and advertisers facing a changing online ad landscape.

Not even mobile phones are entirely insulated from ad-blocking. Android phones have long allowed certain types of ad-blocking, but Apple recently allowed users to download apps that block browser-based banner ads on their iPhones as well.

And certain demographics are more keen to user ad-blockers than others. According to a 2014 Pagefair report, millennials are especially keen to use ad-blockers, with 41 percent saying they used a browser-based ad-blocking software.

But ultimately, consumers avoiding ads isn’t anything new for advertisers. The Reuters Institute report says 30 percent of Americans surveyed just ignore ads. Ad-blocking online may be a growing trend, but avoiding ads isn’t.

“Any advertising platform that you use, the people who don’t want to see the ads are going to find ways to avoid them,” said Anthony Bonna, a senior strategist at the Stoneridge Group, who works with Republican candidates. “With TV, you’ve got TiVo; with print, you have people who just throw the junk mail away. I think there’s now going to be that class on the Internet that tries to avoid ads at all cost.”

This article is from the archive of our partner National Journal.

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