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.

Upworthy says native advertising is working better than expected

The conventional view of Upworthy is that it is just one of a number of sites that specialize in viral “click-bait,” but the site’s founders have always maintained that it is different because the content it chooses has a larger social purpose behind it, as opposed to just driving clicks. And that’s partly why its native advertising program is working better than expected, the company says — pulling in more than $10 million in revenue in the first nine months of last year.

Upworthy’s version of native advertising or sponsored content — something almost every media entity both new and traditional is experimenting with, including the New York Times — is called Upworthy Collaborations, and involves the site partnering with major brands to create content that looks and behaves exactly like the rest of the content Upworthy posts, most of which is designed to be uplifting.

This makes the program a good fit for advertisers whose message is also designed to be uplifting or socially conscious: for example, one of the early participants was Unilever, which used the platform to promote its “Project Sunlight” initiative — a program aimed at helping feed needy children. Unilever executive Marc Mathieu said the partnership with Upworthy had far better results than the firm expected.

[blockquote person=”” attribution=””]”In less than 8 months, we’ve sponsored and promoted dozens of pieces of content, and have reached over 175 million social impressions, and 6 million social interactions, from over 15 million viewers. We’ve also seen a 17% increase in brand perception among users engaging with the series recognizing Unilever as being committed to protecting the planet.”[/blockquote]

More engagement

Other advertisers who have participated in the program include Whirlpool, Gap, Holiday Inn, Virgin Mobile and Universal Pictures. Universal set up a native ad campaign around its feel-good film Unbroken, about an Olympic runner who is sent to a concentration camp during the Second World War. Marketing executive Doug Neil said the partnership resulted in a lot more engagement with potential viewers than other types of campaign.

[blockquote person=”” attribution=””]”We created a strategic bundle of content — some that we provided, and some that Upworthy curated — that centered around perseverance of the human spirit in the face of adversity, which is the core of Louis’s story. We also asked people to tell their own stories as part of the #IAmUnbroken movement. The campaign exceeded expectations by generating over 60,000 social interactions in just a few short weeks leading up to the film’s release.”[/blockquote]

Upworthy said that according to NewsWhip — which measures how content from a variety of media sites performs on social networks such as Twitter and Facebook — the site’s sponsored content performed 38 times better than the industry standard for social interactions involving content at the top 25 social publishers.

This is the year we find out whether new media can scale or not

Investment funds and traditional media entities have poured hundreds of millions of dollars into new-media entities like Vice, BuzzFeed, Vox and Business Insider over the past six months, but will these risky bets on the future of media pay off?

Will Pinterest prove its worth in 2015?

The next year will be the most important one of Pinterest’s life. Until now, the company has focused on its application and its audience, to the detriment of its coffers. It had the luxury to ignore money because it raised a nosebleed $764 million in venture funding to sustain itself. Like most adventurous startups, the money was raised on an unrealized, untested, uncertain premise: That advertising on a visual inspiration application would be highly lucrative.

Come New Year’s Day, that hypothesis will be put to the test for the first time on a large scale. After endless preparation, Pinterest’s year of reckoning has arrived.

In 2015, any brands will be able to do native advertising on Pinterest by paying to promote pins that appear alongside regular Pinterest content. Companies can use Pinterest’s reservation-based system, paying set prices to make sure their ads appear in people’s feeds. The auction-based system, where advertisers bid against each other, is still in beta.

Pinterest has been beta testing reservation-based promoted pins with a select group of partners since September 2013, moving slowly to make sure it nailed its advertising process and didn’t scare off users. According to Pinterest’s blog post about the wider-scale release, the beta test was hugely successful. Like regular pins, promoted pins are shared an average of 11 times, resulting in additional free impressions for advertisers (they only cough up money for the initial impression). These pins continue to be seen and shared after the advertiser stops paying to promote them.

The quiet social company decided to herald its big advertising news when the least amount of people would see it: Over the holiday break. It broke the story by publishing a blog post that ran at the same time as a New York Times feature on the news.

This is par for the course for Pinterest. The company regularly holds big parties at its office to celebrate the introduction of new product features, but when it comes to its revenue stream it prefers not to raise a fuss.

It’s possible that Pinterest is nervous about its reckoning moment and wants to experiment with advertising outside the prying eyes of the public. It’s hard to get to a $5 billion valuation in Silicon Valley without having brought in a cent of revenue. At this point, the stakes are high for Pinterest’s investors and the path is risky.

In the next twelve months, we’ll learn for the first time whether investors overvalued Pinterest or if the company is worth the war chest of funding it’s sitting on. If it’s the latter, [company]Google[/company] better look out. It has another rival creeping up to compete in the category of search.

Pinterest’s image-heavy application may give it a distinct advertising edge in the visual web.

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.

 

 

Medium hires its first head of content advertising

Medium has hired someone to develop its native advertising partnerships, the first such role for the company. As Mathew Ingram previously reported, the blog company is expanding its content advertising, publishing sponsored posts that look similar to regular Medium stories. Riddhi Shah, the new hire who will oversee these efforts, will hold the title “Branded Content Lead.” (Disclosure: Shah and I interned together at The Nation four years ago.)

For Medium, bringing on its first content advertising manager is a significant move. It shows the blogging company is shifting gears, starting to prioritize revenue as it moves into its fourth year. (Medium did not respond to a request for comment sent  Thursday.)

Befitting its part publisher identity, Medium is turning to someone with a more traditional New York media background, instead of tech or business, to lead the charge. Prior to joining Medium, Shah was the Editorial Director of branded content for The Huffington Post. She worked with companies like Chipotle and TED, who advertised on particular HuffPo sections. For example, Chipotle sponsored a “Food for Thought” page as it attempted to remake itself as an environmentally and ethically conscious company.

Shah was uniquely suited for the position because she worked as a journalist for eight years prior, reporting for a variety of publications in India and the U.S. That background made it easier for her to pitch brands potential story ideas they could sponsor. Medium’s hope is that she’ll bring similar brand negotiation skills to the blogging application.

As Mathew covered, Medium wants native advertising to become a key source of funding. Even before hiring Shah, Medium already started lightly experimenting with it, launching a travel vertical called Gone, by Marriott Hotels, and a design section called Re:form, by BMW.

These stories are labeled as being “presented” by these brands, although they’re not necessarily about the companies themselves. For example, Marriott paid the expenses for Medium writers to travel to Haiti and report on the evolution of business there since the massive 2010 earthquake. You can read Mathew’s piece for a good take on the journalism ethics considerations.

From a business perspective, content advertising is well-suited for design-centric Medium. It can avoid ugly, distracting banner ads and reap more worth for brands by helping them subtly associate with certain causes or ideas.

On sponsored posts at Gigaom

A review of how sponsored posts are handled at Gigaom and why suggestions that they influence our editors are just plain wrong.