Last week, culture secretary John Whittingdale branded ad blocking companies as a “modern day protection racket”, recognising the existential threat which the tech poses to the music and publishing industries. Whitelisting, which sees ad blocking firms approve the advertising of those willing to pay them for the privilege, came in for particular criticism.
“My natural political instinct is that self-regulation and co-operation is the key to resolving these challenges,” said Whittingdale as he addressed the Oxford Media Convention. “But government stands ready to help in any way we can.”
Whittingdale also announced his intention to bring major publishers, social media groups and ad-blocking companies together to discuss the issue, and consider the government’s role after the consultation. But would government intervention even help?
“While government intervention may help open up a conversation about how to stem the tide of ad blocking, we have to realise that it’s a self-created problem,” says Mark Jackson, UK managing director at MC&C. “It has arisen through the abuse of digital advertising, with consumers often bombarded with interruptive and irrelevant ads.”
Ben Wood, global president at iProspect, agrees. “Conceptually, the culture secretary is right to call out ad blocking as a modern day piracy.” Like many in the industry, Wood singles out banner advertising and retargeting as two big turn-offs for consumers. It is “low quality, over monetised sites” which have the most to fear from ad blocking, argues Celine Saturnino, head of media operations at Total Media. “The onus is on publishers which have always had a reasonable balance of quality content and advertising to innovate and test different formats which play to their audience.”
Publishers with a younger audience may have their work cut out. Last week the Internet Advertising Bureau released a report which found that 18-24 year olds are the group most engaged in ad blocking (47 per cent). But the same group was also most likely to switch off the software if it was necessary to access content.
This lack of consistency is curious. It has taken years for the music industry to make consumers aware of its economics. Not only can content not be produced for free, but the nurturing of new artists is only made possible with revenues from the sales of more established ones.
“What is needed is more transparency and information to consumers regarding who finances ad blocking technology and their vested interests, which are not about caring for the experience of the consumer,” says Saturnino. “Newsbrands are well placed to deliver this.”
Where regulation might also help, Saturnino argues, is with the monetisation method of ad blocking companies, and to prevent “the ever growing monopoly of the current two market giants”.
“Without any regulation we will see two things – supply being filtered into a further monopoly and development of yet more technology that will be able to circumvent ad blockers.”