Could the creation of a global advertising watchdog sound the death knell for digital advertising?

By June 9, 2016Latest News

An industry which makes it’s bread and butter from advertising revenue, advertising is to digital what Usain Bolt is to athletics. Fast, dynamic, competitive and engaging – advertising is the lifeblood of the digital world. Yet thanks to the advent of ad blocking software, the industry’s ability to conduct business as usual is under threat.

Earlier this month it was announced that the World Federation of Advertisers (WFA), wants to implement a series of changes that could see the creation of a global advertising watchdog. With proposed new powers that would allow it to regulate internet ads, this could spell disaster for brands, publishers and digital marketers alike.

The global advertising trade group, which accounts for around 90% of global marketing spend, believes the growth of ad blocker usage is a clear sign that consumers are disenfranchised with online advertising. Their solution? To create a global coalition that uses shared learning, data insight and customer behaviour to enforce a set of advertising standards, which would be applied on global and local scales.

Rather than combatting the use of ad blockers with sophisticated technology and work-arounds, it would aim to identify the common ad types consumers find the most intrusive and eradicate them.

The status quo 

In an era of waning circulations and where print is on its way out, traditional advertising models are fast becoming redundant. Increasingly savvy consumers are turning online for their content needs. By and large they can find what they’re looking for, free of charge.

To capitalise on this, in the past decade publishers and brands have turned their attentions online too. A somewhat symbiotic relationship, publishers make their money from brands willing to advertise around their content. And brands make their money on the back of adverts that speak to their target consumers in the right place at the right time.

In 2016 publishers and digital advertisers survive by the grace of circulation revenue and ad revenue. Take away either’s ability to earn and it’s a sad state of affairs that has far reaching implications for the future.

The rise of the adblock 

An industry in its own right, the meteoric rise of adblock is showing no signs of slowing down. Last year Adobe estimated that the loss of global ad revenue for the year would reach $21.8 billion. This year the global cost of ad blocking is expected to double at $41.4 billion.

A report from tech company PageFair, released just before the WFA announcement, found that approximately 49 million people block ads on their smartphones (22%), while 198 million block ads on their desktops – an increase of 41% since 2014.

Statistically speaking, the average adblocker is male, with men 48% more likely than women to use adblock plug-ins while online. In terms of age, digitally savvy millennials are most perturbed by digital ads with 41% of 18-29 year olds claiming to use adblock software.

Is the “adblockalypse” here? 

A term coined to describe the launch of the ninth iteration of Apple’s operating system (iOS9), the adblockalypse was hailed along with the arrival of the iPhone 6. For the first time a smartphone came with the ability for users to install software that blocked banner ads from appearing on mobile web browsers.

An unprecedented threat that industry watchers predicted would cause digital advertisers to hemorrhage money like never before, statistics have shown that in fact Google Chrome has driven the majority of adblock’s growth.

But as Google’s Chrome and, to a lesser extent, Apple’s Safari lead the charge, it’s likely that other internet service providers will move to integrate their own ad blocking capabilities too.

There’s no doubting that we’re reaching a tipping point. A 2016 report by eMarketer suggests that as many as 30% of British web users will have installed software to remove web advertising by end of next year.

Yet while the adblockalypse has the potential to severely disrupt the viability of the internet as a platform for the distribution of free ad-supported content, it’s unlikely to deliver any prophetic revelations just yet.

And though an attempt by the WFA to clean up the image of online ads would be welcomed from all sides, a mandate to create better ads that deliver engaging content through a better user experience is perhaps missing the point of the detrimental impact adblock has far beyond an ad’s subjectivity.

Sure advertisers will need to be more creative and work harder to integrate ads. We may even see an increase in the production of native advertising. However, much more likely is that we’ll see a battle of will between consumers and publishers, where it’s probable publishers will prevail – for the time being at least. Small independent publishers will begin following in the footsteps of their major competitors declaring in unison, “our house, our rules, our ads”.