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The ad-blocking crisis – and beyond

Posted on: Monday 15th of August 2016

The recent spat between AdBlock Plus and Facebook exemplifies a challenge – and opportunity – now facing the entire online advertising industry, which is struggling with a simple but profound dilemma that goes like this:

  • People love free services (like Facebook and Google).
  • These free services are funded by advertising.
  • But mostly people don’t like or want advertising unless it just happens to be useful.

Users of online services want to reduce and if possible eliminate the annoyance and irritation of ads. But advertisers want to improve effectiveness, which given current tools often means pushing harder. This is why ad-blockers have proved so popular.

Yet … ad-free services are economically unviable, so ad-blockers are effectively unravelling the unspoken ‘deal’ that lies at the heart of the provision of the free services people like so much.


A way forward

In its commentary on ‘blocking the blockers’ Facebook points to a way forward. Here is what it says on its blog.

‘Bad ads’, it says, “are disruptive and a waste of our time [so …] we’ve introduced tools to help people control their experience, improved how we decide which ads to show and created new ad formats that complement, rather than detract from, people’s experience online.”

It continues:

“We’re building on these efforts by making ad preferences easier to use, so you can stop seeing certain types of ads. If you don’t want to see ads about a certain interest like travel or cats, you can remove the interest from your ad preferences. We also heard that people want to be able to stop seeing ads from businesses or organizations who have added them to their customer lists, and so we are adding tools that allow people to do this. These improvements are designed to give people even more control over how their data informs the ads they see.

“When they’re relevant and well-made, ads can be useful, helping us find new products and services and introducing us to new experiences.”

“Rather than paying ad blocking companies to unblock the ads we show we’re putting control in people’s hands with our updated ad preferences and our other advertising controls.”


On the right track.

We think Facebook is on the right track. The heart of the problem is that people see ads as a cost (interruption, annoyance) with minimal value. The answer is to turn advertising into a service – to make ads useful, as the Facebook blog says. This means understanding and addressing buyers’ information needs, not just about the product concerned, but the life task they are tackling.

In the context of ad-serving, there are some important challenges with this.

First, re-setting ad preferences imposes a cost on the user. It takes time and effort to access, think about and change settings. Unless there is a really clear return on this investment, most people won’t bother. In which case, user ‘control’ ends up being more apparent than real.

This leads to the second challenge. Are the ads presented to people really useful? The honest answer is, nine times out of ten, No. Ads are useful when they help users make a better purchasing decision. There are many ways they can do this: providing inspiration, highlighting new ways to solve problems, down to simple ways to save money. But few ads today offer these levels of value.


An ecosystem challenge

Trouble is, this problem cannot be completely solved by any single company, even one as big and powerful as Facebook. It’s up to advertisers to make their ads useful, but most still haven’t got their heads around the fact that the ‘push’ world is fading and the ‘pull’ world of users pulling useful information towards them is taking over.

The other side of this coin is that reinventing advertising for an age of ‘pull’ is a huge opportunity for advertisers. If they can turn advertising into a consumer service – judged by the value it offers consumers, like any other service – then they will be tackling multiple strategic issues around reaching out to and communicating with customers, including the rise of ad-blockers.