AdBlocking_Project_pp

As Explained ByCOLIN, JESSICA, and CORINA

AD BLOCKING

AD BLOCKINGWhat is ad blocking? How does it work?

• Ad blockers are content filters that rely on predefined filter lists to identify and remove ads. They work by compiling lists of expressions associated with ads and using pattern matching to compare those against outgoing requests made by the user's browser

• Ad blockers may also block tracking scripts, which prevent third-party ad networks from delivering ads to a user's browser by way of the publisher's site

• Before the ads are blocked, the ad blocker strips off the request to the ad service or tracking scripts and injects CSS to repair the site so it doesn't look broken

• Because they interrupt communications with third-party ad networks, dedicated tracking blockers also block ads from those sources

• There are apps that can be downloaded called Ad-Block Browser

STATS

$22 BillionEstimated To Cost Publishers in 2015

198 MillionActive AdBlock Users

Around The World

25%Of The Internet

Population Has Ad Blockers

48%That’s How Much

AdBlocking Grew In The US In The Past 12

Months

#1Google Chrome Is The

Leading Driver Of AdBlock Growth

WHO ARE THE PLAYERS / WHO IS EFFECTED?

• Third party data providers such as BlueKai, The Data Alliance, datalogix, V12, etc. • Publishers and Media Companies• Networks and ad exchanges • Apple and iTunes • Mobile devices and desktop devices

• Popular iPhone Ad Blockers:• Refine (FREE)• Purify (99¢) • Crystail (99¢) • Adamant ($1.99)• Blockbear (99¢)

• Popular Desktop Ad Blockers:• Google Ad Blocker (FREE)• AdFender (FREE)• AdBlock Plus (FREE)• Privoxy (FREE)• GT-Soft Ad Blockers (FREE)

Who Are The Players? Who Will Be Effected?

Who is using the ad blocking technology?

Who Are The Adblockers?

• They are mostly men. In a 2014 survey, men were 48% more likely than women to use adblock plug-ins when browsing.

• They are largely millennials: Peak usage is with 18-29 year olds, 41% of whom claim to use adblock software.

• They tend to live in the Northeast and Pacific coasts: Oregon has the highest ad blocking rate at 16.4%. Washington DC, at 8.2%, has the lowest.

• They’re not on mobile devices: Smartphones and tables represented 2% of adblock use in Q2 2015, desktops and laptops represented 98%.

AppleApple is allowing ad-blocking apps on iOS9; they believe that it will improve their revenues by creating a more consumer friendly experience, which will in turn cut into Google's Android business.

As more advertising spend is moving to mobile, ad-blocking could have a drastic effect on the industry in the coming years, as Apple already has a huge market share in smartphones and consumers are doing more of their browsing on their phones than ever before. Aside from affecting scale of mobile networks, it could impact data collection and the ability of marketers to use that data to reach granular audiences.

PUBLISHER’S REACTIONS

Currently, publishers that cater to a technically savvy audience, such as gaming sites, seem to be getting hit the hardest. Niero Gonzalez, CEO of gaming community Destructoid, is seeing a block rate between 36% and 42%. "Ad blocking hurts the small enthusiast sites the most," he says, and adds that he's not sure the old revenue model based on display ads will ever recover.

And as the number of ad-blocking software downloads continues to climb, even sites that serve a less technical audience are starting to feel the effects. Most publishers don't want to speak on the record for fear of alienating their customers.

However, one executive with a top global website said that between 4% and 8% of the business' traffic -- its sites generate over one billion page views per month -- is being blocked. "It's a ton of money," with lost revenues in the millions of dollars, he says.

PUBLISHERS REACTION How Are Publishers Reacting To Ad Blocking?

• Publishers are preparing for the upcoming ad block development.

• Several options are being explored to combat the growing number of users using Ad Blockers. Among these are:

1. “Freemium" models, where two different versions of a site are available, a free version supported by ads, or a paid version that is ad-free or with many fewer ads (Spotify is an example). Some of the issues here are that on many sites, similar content can be found elsewhere. According to one source, only 2 percent of Internet users would be willing to pay the cost covered by advertising to access information online. This model is most effective for publishers that have exclusive content that doesn’t become less valuable with time, like TV show episodes and live sports; as opposed to news sites.

2. SEO – Ad blocking means it’s time to be thinking more about search engine optimization. With an adblocker turned on, it’s critical to have the organic results nailed down if you want customers.

Continued on next slide…

PUBLISHERS REACTION

Continued…

3. Simple appeals, wherein sites ask ad blocking users to turn off the ad blocker,(though don’t require it), before consuming content on that site. Some options include an option to donate to the site. Early reports state that thus far, these appeals have been extremely ineffective, with under 1% of ad blocking users turning off the blocker. Prohibiting content without turning off the ad blocker. While this can sometimes be effective (as CBS currently uses this method for streaming episodes of its TV shows), it creates an adversarial relationship between publisher and consumer.

4. Paying Ad Blocking companies to NOT block ads on their site. The drawback is that this method can seem ethically ambiguous

OUR RECOMMENDATION/POV

Turning A Negative Into An Opportunity

• There are, however, possible benefits that could arise from Ad Blocking. The NYT suggests that it may drive marketers to create simpler, less intrusive ads that are more acceptable to users. If more ads provide valuable content to users, they may be less inclined to rely on Ad Blocking. This is an area that FM could excel in with our valuable content.

• FM can also benefit from scaling our native products as much as possible. Ad blockers often have a difficult time discerning native ads from organic content. It will be important to continue to place our native ads into highly contextually relevant environments. Continued creativity will be required to get valuable content in front of the right audiences.

Sources

• http://www.computerworld.com/article/2487367/e-commerce/ad-blockers--a-solution-or-a-problem-.html

• https://itunes.apple.com/de/app/ad-blocker-browser-chromecast/id537774578?l=en&mt=8• http://downloads.pagefair.com/reports/adblocking_goes_mainstream_2014_report.pdf• http://www.hongkiat.com/blog/blocking-ads-in-android/• http://blog.pagefair.com/2015/ad-blocking-report/• https://www.linkedin.com/pulse/apples-brilliant-assault-advertising-google-jason-calacanis?trk=hp-

feed-article-title-ppl-follow• http://fortune.com/2015/09/21/apple-adblock-stats/• https://garage.godaddy.com/webpro/design/how-adblock-trends-affect-web-design/