Digital advertising is the industry’s fastest growth area, but it’s threatened by a rapid rise of ad blockers that has industry experts worried.
The advertising industry is struggling to handle new options for users to filter out unwanted content online, and publishers have just been dealt a hard blow, as Apple has approved the first-ever ad blocker for mobile apps.
Ad blocking software filter out ads that slow load times and weigh web pages down, and more than one in six Britons already use it - but the rise of the software among tech-savvy consumers could spell disaster for industries reliant on online advertising.
Despite the growth of ad blockers, digital advertising has remained a motor of growth for the industry, according to figures published by the Internet Advertising Bureau (IAB) today, that show digital ad spend up by 27.5 per cent. But this is largely powered by mobile advertising, where revenue has soared by 51 per cent.
“Just look around you and you’ll see the reason for that. It’s all driven by consumer trends, so it’s down to people wanting to consume stuff on their mobiles instead. The way that people use the internet is changing,” Tim Elkington, IAB’s chief strategy officer, told City A.M..
But the industry’s reliance on mobile as a future growth sector faces a serious threat: Up until now there’s been no way to block out adverts in mobile phone apps. But Apple, that recently introduced the possibility of ad blocking with its latest operating system iOS 9, just approved the app Been Choice, that claims to block ads in-app as well as on browsers. Since its release, it’s been one of the most popular apps available on the App Store.
Read more: Why ad blocking is a blessing in disguise
It seems consumers are unaware of the consequences of blocking out ads, as a YouGov survey from this summer found that more than half had no idea that using an ad blocker would lose the website revenue:
What people have to realise is that looking at those ads is the reason they can enjoy content for free.
Ad blocking cost publishers some £14bn in lost revenue in 2014 alone, and Elkington admits that although it’s a “challenge” for the industry, the growth is understandable:
“It’s perfectly understandable that as a consumer you don’t want lots of really big ads loading and taking up lots of your data. For us, as an industry, ad blocking is a message we have to listen to.”
Justin Taylor, UK managing director of video advertising platform Teads agreed with this:
We can’t blame people for using ad blockers online. Advertisers must respond with far better ads that are less intrusive and more relevant to consumers. We need to focus on creating experiences that are respectful of the end user and which engage, rather than enrage readers.