Presentation at the Advertising Research Foundation, NYC, on the opportunity of adblocking

The blocked web, blessing or curse?

NYC, 7 February 2017Dr Johnny Ryan, PageFair

@johnnyryan

Background: founded Demonware, created the technology to enable huge multiplayer games. Is used in games like…

pre-2012

PageFair team working on adblocking since 2010. Established PageFair in 2012.

2013 2014

2015The cost of ad blocking PageFair and Adobe 2015 Ad Blocking Report

2016

2017

Dec 16Apr 09

Global Monthly figures

-

200 M

150 M

25 M

Apr 09 Apr 10 Apr 11 Apr 12 Apr 13 Apr 14 Apr 15 Apr 16

100 M

50 M

235 M

Dec 16


400 M

300 M

50 M100 M

25 M

235 M


Desktop/Laptop

Mobile

Apr 09 Apr 10 Apr 11 Apr 12 Apr 13 Apr 14 Apr 15 Apr 16 Dec 16

50.2 million monthly active PCs, and 1.6 million monthly active mobile devices. 18% adblock penetration

Start of 2017

5%

10%

15%

20%

25%

18-24 25-34 35-44 45-54 55-64 > 65

All ages are 1.5 times more likely than average to have a bachelors degree

U.S. adblock users by age

5%

10%

15%

20%

25%

18-24 25-34 35-44 45-54 55-64 > 65

All ages are 1.5 times more likely than average to have a bachelors degree

3 times more likely to have a bachelors degree

U.S. adblock users by age

- Dec 16Dec 13

Desktop Growth

Dec 13 Dec 14 Dec 15 Dec 16

50 M

40 M

30 M27 M

Desktop Growth


50 M

40 M

30 M27 M

Summer months

Desktop Growth


50 M

40 M

30 M27 M

Summer months

Linear. Not exponential.

NOT THE “ADPOCALYPSE”

ADBLOCKING IS LIKE

CLIMATE CHANGE

DIGITAL AD INDUSTRY

SHORT TERMISM

Why people block (no order)

•Security. •Ads obscure content. •Bandwidth. •Privacy.

Why people block (no order)

•Security. •Ads obscure content. •Bandwidth. •Privacy.•Because they can.

The “Blab-Off” TV remote control. 1952.

80%learn about ad blocking from friends / web / social media

HISTORY (Antidote to short-termism)

“The best western history of the Internet to date” Library Journal

“Engrossing” Cory Doctorow, BoingBoing

“Consider this book your road map” Marc Benioff,

CEO, Salesforce

“An immensely important book” Kevin O'Sullivan,

Editor of The Irish Times

“Enormously useful ... a great read” Prof Tim Wu,

Columbia Law School

“Captures the sweep of the Internet’s development” Prof Jonathan Zittrain, Harvard Law School

first physics web servers outside CERNJanuary 1991

44.8 million people 1995

188.5 million people 1998

1.6 billion people 2008

2.7 billion people January 2013

2.7 billion people blocked web: <1 % January 2013

Blocked Web (nerds)

December 20163.4 billion people blocked web: 11 %

50 million people

Now

286.9 million

TODAY IN THE UNITED STATES

THE GOOD NEWS

77%of adblock users

willing to view ads

77%of adblock users

willing to view ads

up from 66% in 2014

61%67% 67%

% of adblock users who express a willingness to view each format, multiple choice (2014)

Popover Video non- skippable mid-roll

Display with audio

Video non- skippable

pre-roll

Interstitial Animated display

Video skippable

mid-roll

Video skippable

pre-roll

Text ad

30%

60%

Image display

Image display

25%

50%

35%

52%

Animated display

Ads that auto play

sound

Non-skippable video

Native ads Skippable video

% of adblock users who express a willingness to view each format, single choice (2017)

AD SERVING ADBLOCKING

CAN NOT TAMPER WITH

Publisher’s inventory (LEAN display formats)

Regular audience Unblocked audience

IAB LEAN Advertisement

Adv

erti

sem

ent

///

AdvertisementA

dver

tise

men

t

///

Publisher’s inventory (All formats)

Tamper-proof serving

Regular ad Server

Listento users’grievances.

3 Steps to Solve Adblocking

Listen Fixto users’grievances.

security, UX, bandwidth, & privacy.


Listen Fixto users’grievances.



Listen Fix SERVEto users’grievances.

LEAN display format using tamper-proof serving.



Technologies … that can block the display of our ads … have had an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed.

- Facebook 2015 annual report

Desktop ad revenue grew 18%… Recent quarters [were] about half of that growth rate on a year-over-year basis. … That acceleration in desktop revenue growth is largely due to our efforts on reducing the impact of ad blocking.

- David Wehner, Facebook CFO quarterly earnings call, Q3 2016

Half a quarter = 9% growth

Q3

Desktop ad revenue grew 22%, despite a decline in desktop usage, helped by our efforts to limit the impact of ad blockers on advertisements served on personal computers.

- David Wehner, Facebook CFO quarterly earnings call, Q4 2016

Q4

SOLVE CMO’s 3 TERRIBLE PROBLEMS OF DIGITAL MARKETING WEB CLUTTER adFRAUD VERSATILITY

#1

Ad Fraud

Attention = PLENTIFUL.

Adblock user

Ads = SCARCE.

Attention = PLENTIFUL.

Adblock user

Ads = SCARCE.Definitely human.

#2

Clutter

Ad

Ad

AdAd

Ad

Ad Ad Ad Ad Ad

AdAd

ATTENTION V ADVERTISING

SCARCE ATTENTION

OVER-ABUNDANT ADVERTISING


ABUNDANT ATTENTION

SCARCE ADVERTISING


#3

Versatility

BTL

ATL

66% of online advertising is performance advertising, according to IAB/PwC Internet Ad Revenue Report, HY 2015

Most normal Web users BTL

ATL

AWARENESS

CONSIDERATION

INTENTION

PURCHASE

66% of online advertising is performance advertising, according to IAB/PwC Internet Ad Revenue Report, HY 2015

Adblock users BTL

ATL

AWARENESS

CONSIDERATION

INTENTION

PURCHASE

Adblock users BTL

ATL

AWARENESS

CONSIDERATION

INTENTION

PURCHASE

Adblock users BTL

ATL

AWARENESS

CONSIDERATION

INTENTION

PURCHASE

TIME TO ENGAGE WITH THE

BLOCKED WEB

“Appeal” Please turn offyour adblockerTamper-proof

Adblock Detection

“Appeal”Ads blocked

Please turn offyour adblocker

NoTamper-proof

Adblock Detection

“Appeal”Ads blocked

Regular Ads

Please turn offyour adblocker

No

Yes

LEAN AD

Adv

erti

sem

e

Tamper-proof Adblock Detection

“Wall”

“Appeal”

Mandatory: Turn off

your adblockerNo

YesRegular Ads

50% - 90% Exit Your Site

Adv

erti

sem

e

Ads blocked

Regular Ads

Please turn off your adblocker

No

Yes Adv

erti

sem

e



LEAN AD

LEAN AD

“Wall”

“Inform”

“Appeal”

Mandatory: Turn off

your adblockerNo

YesRegular Ads


Adv

erti

sem

e

Restored Ads

Adv

erti

sem

eWelcome to better ads!

Ads blocked

Regular Ads


No

Yes Adv

erti

sem

e




LEAN AD

LEAN AD

LEAN AD

“Wall”

“Inform”

“Appeal”

“Choice”

Mandatory: Turn off

your adblockerNo

YesRegular Ads


Adv

erti

sem

e

Restored AdsAdvertisement

Adv

erti

sem


Ads blocked

Regular Ads


No

Yes Adv

erti

sem

e

Regular Ads

Restored Ads

Adv

erti

sem

e


No

Yes

Adv

erti

sem

e





LEAN AD

LEAN AD

LEAN AD

LEAN AD

LEAN AD

“Wall”

“Inform”

“Direct”

“Appeal”

“Choice”

Mandatory: Turn off

your adblockerNo

YesRegular Ads


LEAN AD

Adv

erti

sem

e

Restored AdsLEAN AD

Adv

erti

sem


Restored AdsLEAN AD

Adv

erti

sem

e

Ads blocked

Regular Ads


No

Yes

LEAN AD

Adv

erti

sem

e

Regular Ads

Restored Ads

LEAN AD

Adv

erti

sem

e


No

Yes

LEAN AD

Adv

erti

sem

e






Listen Fix SERVEto users’ grievances.

LEAN display format using tamper-proof serving.


PageFair’s 3 Steps to Solving Adblocking

1. Adblock is a new remote control. It will not go away.

2. Respond like Facebook: Listen to grievances, Fix these problems, then Serve ads in a tamper-proof way.

3. The unblocked web is an opportunity.

Summary

@johnnyryan PageFair.com

http://PageFair.com

Presentation at the Advertising Research Foundation, NYC, on the opportunity of adblocking

Business