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#ReThink: Ad blocking, nothing more than a flimsy band-aid

Apple’s recent announcement of a feature on its iOS 9 mobile operating system re-started a familiar debate on whether ad blocking helps or harms the ad industry. Just last week, one such app named Peace became the top paid app in the US almost overnight. But in a suprising move, the developer Marco Arment, pulled his app from the App Store – why you ask? In his own words, the app’s success “ just doesn’t feel good”.

The struggle that Marco’s conscience was facing goes like this.

Ad blocking can hurt content creators and publishers who traditionally get rewarded for their work when ads are served. Consumers, on the other hand, can be justified to want their web experience to be ad-free.

To each individual, adblocking reaps private benefits and is perceived to have little effect on the advertising industry. Collectively, however, each ad block is contributing to an estimated USD 22 billion loss in earnings for content creators this year. If nothing changes, it could stand to kill off much of the web content that is currently sustained by ads. Now, would you rather reap the private benefit of an ad-free web at a potential cost to web society, or endure the private cost of ad consumption for the good of society?

But perhaps ad blocking is in fact just a symptom of a bigger problem: poor-quality “unacceptable” ads. Perhaps these ads should really be the common enemy of consumers, advertisers, and publishers. Bad ads are the root cause of consumers’ frustration with advertising—the black sheep of the advertising industry, wedging distrust between consumers and advertisers.

Poor quality ads gave rise to ad blocking, which have now given rise to innovations that enable publishers to detect and circumvent ad blockers—yes, that’s block the blockers!—which then sparked another wave of innovation to hit back with apps to hide ad blockers from these detectors. As you see, this cannot be a sustainable solution in the long run. It is unproductive to both consumers and the advertising industry as resources are diverted to develop a series of counter-attacks instead of solving the root cause of the problem.

Trust needs to be restored between consumers and advertisers, period. The industry can and needs to do more to upkeep a certain standard for ad quality, so that ads will enhance, not mar, users’ browsing experiences. And here are my two cents on potential solutions to re-think this problem:

1. Flag the outliers
In a real-time marketplace in which ads are being traded in milliseconds, every banner leaves a trail of data: the number of buyers in an auction, the traded price (cost per mille or CPM) compared to the average price for that particular slot on a given publisher site, click-through-rates (CTR), and more. This data, when analysed cleverly, can be very revealing. Inferior, irrelevant ads will appear as complete outliers, and can be flagged to the ad quality team of the ad network, publisher or supply-side platform (SSP). It might then be wise to ban, temporarily or permanently, the URL of the offending advertiser. A simple solution in theory, but it is up to the discipline and will of the industry to implement.

2. Weed out bad ads by scoring
A more scalable and tech-driven alternative could be to take a leaf from the books of ride-sharing apps. Ever wondered why you’re required to rate your driver at the end of each trip? Most ride-sharing companies have certain expectations of their drivers—a minimum standard of service required to keep riders trusting, and therefore using, the platform. When a driver’s personal rating falls below the city average, he stops getting rides and over time is removed from the platform.

In a similar way, publishers and Ad Exchanges could come up with a “score” for each creative. Google has done this for years with Quality Score on their search ads. Such a metric for display ads could serve the industry well—when a advertiser’s creative score falls below the average (of a country, publisher, type of site, etc.), that advertiser should be eliminated from the bidding pool altogether. That last part about elimination is important: we cannot afford half measures. If an advertiser’s creative does not meet expectations, kill it and keep the marketplace clean.

No doubt all of this is easier said than done, and might even require the marketplaces to sacrifice revenue in the short term. Moreover, those minimum ad standards will need to be properly defined. Still, it is a hopeful solution to upkeep ad quality without obliterating the entire display industry.

The industry needs a collective focus and an obsessive approach in safeguarding ad quality. We need to end the current arms race between consumers and advertisers with their collaboration to address the heart of the problem: the lack of ad relevance and quality control. And we need to do it fast. #ReThink

#ReThink is a column written by Rohit Kumar, Managing Director Asia Pacific for Sociomantic Labs, meant to prod readers to evaluate current issues from a fresh perspective.

Rohit Kumar

Rohit Kumar is the Managing Director Asia Pacific of Sociomantic Labs from dunnhumby. He joined Google in 2007, and later, was a founding member of Google’s EMEA Ad Exchange team, leading the commercialisation of RTB technology to the marketplace. He also ran his own ad technology advisory business. He holds a Master’s degree in management from the London School of Economics.1