Ad Blocking and Tackling: What 2015’s Ad Blocking Means for 2016’s Marketing

2015 was the year when an unprecedented number of users took action against the ads that slowed web pages and turned the online content experience into a frustrating game of close-that-ad. According to a PageFair and Adobe report, U.S. ad blocking grew 48% in the twelve months leading up to June 2015. That’s 45 million users—16% of the population—who just said no to digital and, in particular, mobile web advertising by downloading ad blocking applications.
With eyeballs and revenue on the line, thought leaders debated whether the ad blocking trend would destroy or save advertising. The Association of National Advertisers (ANA) blamed the digital ecosystem. The Internet Advertising Bureau (IAB) blamed themselves for having “lost track of the user experience.” (They also notably took ad blockers to task for disingenuous practices, most specifically paid “whitelists” for publishers.)
The cost of ad blocking is significant, with an estimated $781 million dollar loss for the industry. But another resonating impact of the Great Ad Rebellion of 2015 will be found in its influence on marketing investments. What will marketers do differently to navigate the digital/mobile landscape in 2016?
Revisiting advertising
Lest there is any question, ad blocking will not prompt an all-out surrender by the ad ecosystem. Some publishers, like GQ, Forbes and more recently Wired, are fighting fire with fire, by blocking users with ad blockers. But the longer term strategy is to address the issues with ad experience. Some of this responsibility falls on publishers, who determine the degree of disruption that must be tolerated to access content, as well as the ad tech landscape, where fierce competition can inspire extreme approaches to ad engagement. (To steer publishers and platforms to a more user-friendly approach, and as part of its mea culpa, the IAB introduced new guidelines that emphasize ‘light, encrypted, ad choice supported, non-invasive ads’.)
But no change can succeed unless marketers direct ad dollars to those that are innovating in favor of an improved experience. This isn’t a simple task, given that site-by-site scrutiny can work against the efficiency gains of programmatic buying, a practice that has itself been blamed for the surge in ad blocking. As such, there will also be other moves to optimize ad impact, including increased investment in emotionally-aware ads, where data is used to extrapolate insights about a user’s psychological state in a given moment. Incorporating a measure of receptivity into ad delivery could prove to be the much-needed difference between engaging a consumer and ticking them off.
Thinking beyond advertising
Ongoing concerns about ad ROI will prompt more marketers to deepen investments in other approaches. Native advertising, the modern day equivalent of the advertorial, offers a worthy complement to traditional ads. Content marketing and branded content will help brands meet the need to feed social channels. Influencer marketing will gain practitioners as marketers struggle to connect with elusive millennial audiences. We’ll also see more brands practicing corporate social responsibility and, of course, promoting those good deeds via social channels.
Each of these tactics offer a subtler alternative to the traditional advertising message. And while this can be a strength in an oversaturated landscape, there is a fine line between subtle marketing and the calculated manipulation of audiences. The FTC tuned into this, releasing guidelines to ensure consumers can distinguish native advertising from content. But marketing’s most powerful critics are the consumers themselves, which leads to the next point…
Embracing feedback—in all forms
In a world of 24/7 marketing, brands are constantly challenged to creatively and authentically engage consumers in “conversation”.  The always-on dialogue represents tremendous opportunity, but it doesn’t come without risk. Today consumers are quick to call brands out when they’ve missed the mark, even when it’s as seemingly innocuous as Red Lobster’s slow response to a shout out from Beyoncé. Success doesn’t grant immunity either, as is evidenced by the less than warm welcome REI received on Reddit following its widely-celebrated #optoutside campaign.
This vulnerability could make one want to crawl back into the safe confines of traditional marketing, but of course that’s not an option. In 2016, more marketers will have strategies in place that allow them to creatively participate in the two-way dialogue while also managing the inherent risk. This means more than having an ear to the ground; brands need a plan that allows them to quickly gauge when and how—or if—it makes sense to engage or respond. (Arby’s farewell to their consistent critic Jon Stewart is a stellar example of a brand creatively and effectively steering into negative feedback.)
It may be that consumer ad blocking is really only part of this feedback cycle— less a mass exodus from advertising than it is an aggressive critique of its current form. Either way, it is a milestone in the ongoing transition from one-way marketing, perhaps one of the last nails in the coffin. Today, consumers have more than just a voice—they control the levers on which messages they receive and when. Marketers will need to keep in mind throughout the execution of every strategy and tactic to have an edge in 2016 and beyond.

Verizon’s data-sharing with AOL is worrisome, but not surprising

There was never any chance Verizon would refrain from bolstering AOL’s advertising network with the information it collects from its customers. The carrier paid $4.4 billion for an ad-dependent business; it’s not going to leave that business to its own devices, at least not where revenues are concerned.
So, it should come as little shock that Verizon planned to connect its “zombie cookies” — trackers that collect data from unencrypted connections unless a consumer opts out of the program — with AOL’s advertising network so it can better target specific demographics, as ProPublica reported earlier this week.
The zombie cookies allow advertisers to learn about someone’s “gender, age range, and interests.” When asked for comment on the information-sharing, a spokesperson linked to a blog post in which Verizon chief privacy officer Karen Zacharia says the data will only be shared to “Verizon companies, including AOL, and to a select set of other companies that help Verizon provide services.”
AOL’s Tim Armstrong defended the plan on Wednesday. “If consumers don’t trust you it’s not worth whatever you’re going to do with the data,” Armstrong said, according to a report from AOL-owned TechCrunch. “Verizon is probably more sensitive to data than most Internet companies.” He then compared data to oil and said information and fossil fuels can be used in good or bad ways.
Those defenses won’t carry much weight. There’s still something unsettling about knowing that one of the nation’s largest wireless carriers will be sharing information with an all-but-omnipresent ad network to assist its targeting. Verizon customers didn’t sign up for that when they decided to use the wireless network, nor when they visited any of the sites serving AOL’s advertisements.
Which lends some more credence to the idea that people might wish to install ad blockers. A spokesperson from Eyeo, the company behind AdBlock Plus, told me the tool “can technically help users to defend themselves against this kind of tracking.” Combine the desire to maintain a little bit of privacy with the time and money to be saved by using an ad-blocker, and it seems like a no-brainer.
Those benefits are especially funny when Verizon is involved. Using an ad-blocker to cut down on the amount of mobile data used could prevent many people from having to pay for going over their monthly data limit, while also preventing the company’s shiny multibillion-dollar acquisition of AOL from paying off because people don’t want its ad network to learn more about them.
Still, the company must be given credit for its efforts to let people know about the change. As Zacharia explains in her response to ProPublica’s reporting:

We are alerting customers who are eligible for these programs in the following ways: we’ve posted a notice on our website; customer bills will contain a message notifying them; and those customers for whom we have an email address will also receive an email notification.

I went through the process myself, and while it was frustrating having to “save changes” for every section within Verizon’s privacy controls, it was nice to have everything available right there. Who knows when I’ll have to switch everything off again (companies have a knack for forgetting someone’s preferences, at least where data collection is concerned) but for now it seems like everything’s good.
I’ll still leave the ad-blockers enabled, though. Verizon isn’t the only company trying to collect more information with what Walt Mossberg described as “a form of spyware, scooping up information about what people do online without their knowledge and permission.” So long as that remains true, it seems like a good idea to block ads, even if gives the media industry a series of panic attacks.

Snapchat plans advertiser-supported ‘sponsored lenses’

Snapchat has found a new way to monetize its service — and this time it’s not undermining the reason it’s become such a popular social tool in the process.
The Financial Times reports that Snapchat wants advertisers to pay for “sponsored lenses” that change the way its users’ selfies look. Citing the ever-popular “people familiar with the matter,” the report says the feature should debut on Halloween, which seems like a good time to launch a tool devoted to making things look weird.
Sponsored lenses are said to cost $750,000 during important dates like Halloween, Thanksgiving, and Christmas. They’ll cost $450,000 during other days — an option which could make it attractive to companies looking to promote new films, albums, or other content that is tied to a specific date but doesn’t coincide with any holiday.
Advertisers who want to reach Snapchat’s valuable millennial user base have other options, too. They can pay to create special “geofilters” that allow people to modify their photos with stickers unique to specific locations. They can also pay to show ads in the app’s Discover section, with Snapchat taking varying portions of the revenues.
All those ads live alongside other, non-sponsored features inside Snapchat’s app. People can use lenses to change their selfies even if an advertiser didn’t pay for it, modify their photos with geofilters from places unaffiliated with any business, or watch a couple dozen videos through Discover without encountering a single ad.
These sponsored lenses would follow another new revenue scheme: Asking people to pay for the ability to re-watch the ostensibly-ephemeral content sent to them. The feature is available for free, but consumers are asked to pay 99 cents to receive three more of the “Replays,” as they’re called. A used-to-be free feature went freemium.
That change is worrisome. As I wrote when Snapchat changed the feature:

Snapchat has now popularized and, indeed, monetized, a concept that runs counter to the notions that made it popular in the first place.

Today it’s paying a little less than a buck to re-watch some videos or take another peek at a photo. What might it be later? A few dollars to view a snap more than twice? Doing away with the restriction when teens don’t pay for Replays? Perhaps that won’t happen, but it seems more likely than it did yesterday.

Features like these new sponsored lenses are a little less hostile to Snapchat’s original vision. Besides looking like a goofball for a few seconds — double if someone uses one of their precious Replays to view the snap again — they’re harmless. They’re also fun, and they fit with Snapchat’s monetization strategy to date.

Report: Ads are one step closer to coming to Tinder

Tinder is working on building itself an ad unit, according to Re/Code sources. The dating company contacted both Facebook and Twitter to discuss a potential advertising partnership. There’s no more information on what these advertising units could look like, but Re/Code speculated that local bars or restaurants might want to market themselves as date spots in the app. Tinder wouldn’t comment on Re/Code’s story.

Vine rings in its second year by hitting 1.5 billion daily loops

Video app Vine celebrated its second anniversary Saturday, prompting product head Jason Toff to share new metrics. The company is now seeing 1.5 billion loops, or plays, a day of its six second videos. That compares to the “more than one billion” daily it announced in October.

1.5 billion a day is a huge number. Multiply it by 365 days of the year and Vine is seeing more than half a trillion loops yearly.

But it comes with a caveat. Vine videos are set to repeat themselves automatically, so 1.5 billion loops doesn’t represent the amount of individual, unique views by new people. If someone leaves their feed unattended, the views can multiply quickly.

The most recent user number Vine released was 40 million registered users, in August 2013. The company notably left out monthly active users and as far as I can tell it hasn’t released new user metrics since. I’ve reached out to the company to confirm and will update if I hear back. It’s possible that user growth itself has stagnated on the application even as its video plays have grown. Lots of people consume Vines other places than the app, watching them on Facebook, Twitter, or even YouTube.

In terms of viewing, the new stats show Vine has grown from its earlier self as it matured as a video application. It’s a mainstay of entertainment for teenagers, giving them a second screen experience.

Although the company hasn’t introduced advertising, brands pay the top Vine celebrities, the stars with the most followers, to do product placement in their videos or even outright mini commercials. The six second limitation to the video has spurred new, creative forms of expression from stop motion art to its own genre of slapstick comedy.

As I’ve written about, the earliest Vine stars are graduating from the application, starting to land Hollywood TV show parts and record deals, parlaying their teen social media stardom to a broader, more mainstream audience. Vine’s owner Twitter hasn’t entirely managed to keep up. It’s ignored some of its biggest celebrities, perhaps to keep the app focused on average users instead of just highlighting the famous faces. But its better-funded competitors, like Facebook and Instagram, have started wooing the key content creators in Twitter’s absence.

In typical Twitter fashion, the Vine product has managed to grow in spite of its parent company’s potential pitfalls. As it rounds its two year mark, the application and its stars show no sign of slowing.

Brands pay Twitter to falsely appear in your following list

A Twitter advertising technique is perturbing people. Promoted brands like MasterCard and IFC are appearing in the list of accounts some users follow, even if they don’t actually follow them.

Sources familiar with the company’s advertising strategy tell me this has been occurring since early 2013, but the public has only just now cottoned onto it thanks to actor William Shatner (of Star Trek fame). Shatner brought attention to it after he saw that “MasterCard” appeared in his following list despite the fact that he didn’t follow it. He did a little investigation and discovered that the same promoted account appeared on Dwayne Johnson’s follower list, looking a little out of place given “The Rock” only followed one other account.

Twitter has long been a proponent of native advertising, making its money off promotions that look like a regular part of the Twitter landscape (instead of, say, a banner ad). People are accustomed to promoted accounts appearing in their regular feed and promoted hashtags in the trending topics section. But sticking brands in the list of who a user actually follows is a departure from the above examples.

By making it look like someone follows an account that they don’t, it sends a false signal that said user cares about that brand. Although the brands are marked as “promoted,” it’s not necessarily clear that the user in question doesn’t actually follow the brand.

There’s ethical considerations to be had. Hypothetical examples: What if you’re vegan and don’t want people to think you’re following Burger King? Or you’re the CEO of Visa and don’t want people thinking you’re following MasterCard? Or you’re a pro-life activist and don’t want people thinking you’re following Planned Parenthood?

Once again, it appears Twitter’s product managers fundamentally don’t understand the way people use its application.

 

 

YouTube may add a site-wide paid subscription so you won’t have to watch ads anymore

YouTube is exploring the idea to add a paid service plan to its site that will give users access to videos without ads, according to YouTube CEO Susan Wojcicki. “There’s going to be a point where people don’t want to see the ads,” Wojcicki said at Recode’s Code/Mobile conference late Monday. YouTube introduced paid channel subscriptions with partners like the Sesame Workshop earlier this year, but this new paid tier would be site-wide. “We’re thinking about how to give users options,” she said — and grow YouTube’s revenue in the process, one might add.

Advertisers on video sites like YouTube may have been accidentally funding jihadis

Ads from the U.K. government, charities and multinational corporations have been running ahead of jihadi recruitment videos on sites like YouTube(s goog) and Dailymotion, a BBC investigation has revealed. That may mean the likes of the National Citizen Service (NCS) and Oxfam have been unwittingly putting money into the pockets of Islamist extremists, as uploaders get a cut of the ads shown before their videos. Following the investigation, NCS, Oxfam and the BBC itself – in a similar position – have complained and/or had their ads removed from the offending videos. YouTube said it removes violent extremist videos when users flag them up.