June 21, 2017 Last Updated 9:40 am

Are Ad Blocking Recovery Options Worth The Effort for Local Media Companies?

Guest column: Tom Sly, VP, Digital Revenue at The E. W. Scripps Company, says ‘it’s up to leading local publishers and technology companies to guide the industry in ad blocking recovery options and best practices’

A recent report found that ad blocker usage among consumers is up 30 percent. Add to that the recent announcement that Google plans to offer an ad blocking feature in mobile and desktop versions of its popular Chrome browser, and local media companies have reason to stand up and take notice. But what can digital publishers do to mitigate ad block-related revenue loss? How do local media organizations walk the fine line between generating business sustaining revenue without annoying their ad sensitive audiences? And are ad blocking blockers worth the effort?

Amid the doom and gloom of this ad blocking news are some bright spots, including reports that show actual ad block usage is less than projected. Reports also found that the vast majority (77 percent) of ad block users said they are willing to view some form of advertising if the experience is not annoying. And we know that ad block mitigation can boost revenue. For instance, Facebook CFO David Wehner said during the company’s Q3 2016 earnings call that blocking ad blockers boosted Facebook’s desktop ad revenue 18 percent

But many publishers – particularly smaller local media entities that are already understaffed – lack the staffing resources, technical capabilities and budget often required to successfully implement ad blocking blocker services.. So it’s up to leading local publishers and technology companies to guide the industry in ad blocking recovery options and best practices.

In response, the Local Media Consortium formed an Ad Blocking Committee with a goal to make a recommendation on the best way – or ways – in which to deal with ad blocking.  To start, we have met with and are analyzing the services offered by seven leading ad block recovery companies in the space. We are assessing them on vendor model, pricing, audience management, networks, exchanges and inventory.  We are also looking at the different tactics that publishers can use to mitigate ad blocking and have found four primary ways to mitigate ad blocking:

  1. Messaging
  2. Whitelisting
  3. Proxy Ad Server / Ad re-insertion
  4. Alternative monetization

National and local publishers are using messaging to address ad blocker concerns with content to let their readers know about how ad blockers can hurt their audience’s ability to see valuable local content and related ads with soft messages such as “The best things in life aren’t free … advertising helps fund our local journalism” to more direct “please disable your ad blocker.”

With whitelisting, when ad block usage is detected, the user sees an ad-experience with “acceptable ads.” This significantly limits the ad types in ad blocked experience. Whitelist acceptable ads include static, non-intrusive ads. This type of ad cannot cover content, hover or expand, nor can it use interstitials, pop-overs or pop-unders and no “autoplay” on video pre-roll. The result is a more acceptable, less intrusive ad experience for the consumer.

With ad re-insertion, ads are served from an unrecognized proxy ad server address. Although user data often cannot be passed through with this scenario and the CPM is often sub-$1.00, this tactic allows for the publisher to recover some revenue.

An example of alternative monetization, which can be triggered by an adblocker, comes in the form of a leave-behind that generates a full-page ad when the user leaves the site. This can garner a higher than average CPM up to $8, but you risk creating friction that annoys your audience.

What have we learned so far?  In all honesty, it’s complicated.  And no one solution is perfect. The LMC will continue to investigate options and study best practices.  For now, we recommend that local media:

  1. Clean up your sites. Let’s face it. Publishers have given consumers a reason to use ad blockers. We owe it to our audiences to steer clear of ad tactics, partners and advertisers that deliver irritating, data-eating, unsecure or annoying ad formats such as interstitials or what I often refer to as never-ending Whac-A-Mole pop-ups.
  2. Adopt Better Ads Standards. A good place to start making sure your ads adhere to industry standards is with the Coalition for Better Ads (www.betterads.org), an industry group that released its updated list of ad standards in March.
  3. Listen to your audience and provide options they’re willing to tolerate when it comes to content, cost, ad formats and placement.
  4. Engage in messaging. Be honest with your readers about how the wrong type of ad block settings can hurt your ability to deliver important news. Remind them that the purpose of local journalism is first and foremost to inform the community about important stories near and far, but you will be hobbled in your ability to deliver the news at low or no cost if you can’t be compensated through advertising.
  5. Participate in revenue recovery. Ad recovery programs such as ad proxy insertion, micropayment options or data exchange for content such as email addresses or social media likes should be considered, however, it’s important to keep in mind that ad blockers often do not allow cookies so this customer is not as valuable to the advertiser as someone who doesn’t use an ad blocker.
  6. Utilize measurement tools to see how messaging and revenue recovery impact page views and ad revenue.

Is blocking the ad blockers worth it? Only each individual media company can determine what’s best for their company but here are some things to consider. First, ad block usage is expected to grow with word of mouth from consumers and announcements such as the recent one from Google. Right now, ad block software is used on roughly 20 percent of desktops but less than 1 percent of mobile devices.

When you consider that about 40 percent of the local media audience views news on their desktop and 60 percent via their mobile device we’re talking about the revenue recovery opportunity to look like recovering 20 of 40 percent which equates to about 8 percent of the local media audience using ad block options today. Add to that the reality that ad block recovery solutions garner about half of the CPM rate as traditional programmatic options, have about half the fill rate and often require shared revenue with  third parties, and you’re looking at a realistically recovering only a couple percentage points. With this small amount or revenue recovery benefit for publishers, some may ask why we’re investing the time with this.  We see that ad-block usage is growing, thus it is important that we understand the technology and options available for the tie when the numbers look quite different.

So while the media needs to be ready to fight when it comes to potential lost revenue from ad block usage, we have time to be deliberate in our response and understand the Return on Effort. I look forward to monitoring the LMC’s assessment of and recommendations on best practices for digital publishers to utilize to mitigate ad block revenue loss in this evolving space.

Tom Sly is VP, Digital Revenue at The E. W. Scripps Company where core facets of his work include: New partnerships, personal relations with media corporations, strategic direction for marketing promotions and product input and collaboration with the technology team and CTO. Sly is also an Executive Board Member and Ad Blocking Committee Member of the Local Media Consortium (LMC) a strategic partnership of leading local media companies.

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