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Blog Post

The Opt-Out Age of Advertising: What Does This Mean for Us?

July 12, 2017
Table of Contents

If you’re a digital advertiser, you know all too well how quickly the online landscape can change in ways that dictate your ad strategy. This past year, we saw a sharp increase in the amount of ad blockers that are being installed on both desktop and mobile devices.

On top of that, news was recently published in a blog post by MarTech, asserting that retargeting may be the next ad format to fall by the wayside due to decreased 3rd party cookie collection. In simple terms, third party cookies are used to effectively track a user’s activity on a website, and advertisers leverage this to serve that user hyper-relevant ads based on their previous activity. The increased ad relevancy elicits a higher volume and efficiency of clicks, and thereby more opportunity for lead or customer acquisition.

However, third party cookies have slowly but surely turned into something that is increasingly easy for a user to block or opt out of. Safari, Chrome, and multiple ad blockers all possess that functionality.

Now, while this isn’t in itself a huge issue as of yet, it is a microcosm of a growing trend across the digital realm as a whole – not exclusive to simply Google. Think about Hulu, Netflix, HBOGo, Spotify Premium, SoundCloud Premium – what do all of these services have in common? They allow you opt-out of advertising for a small fee. Even more antiquated and traditional venues such as the Wall Street Journal and New York Times are exploring ad-free options.

So the question becomes, what are the long-term consequences of an increasing amount of users opting out of and avoiding ads? And what are some of the causal factors catalyzing and perpetuating this trend? We were asking ourselves the same questions, and did our best to answer those for you below.

What Are The Long-Term Consequences?

An Industry Trends report for the past year was published by KPCB, which is a VC firm out of Silicon Valley. It demonstrates that, as mentioned before, ad blockers have seen a drastic jump in popularity in the last few years, but specifically from 2013 – Present. It also shows that ad-blocking browsers see the most popularity on mobile devices, which speaks to different user intent for respective devices. But we’ll get into that a bit later on.

What one can discern from this data is that there may be consequences that have yet to unfold in the advertising world, which can affect not only advertisers, but the preverbal “small guy” as well.

Related: Your A-Z Guide on Running a Successful E-Commerce Business

Think about even some of the more popular news or entertainment sites on the web today, like Buzzfeed or Uproxx. Sites such as these make the vast predominance of their revenue by selling ad space, what is known as “affiliate” marketing.

Should the trend of increased of ad blocking browsers and plug-ins continue, specifically on mobile devices where these websites see the bulk of their visitors, these “small guys” who don’t have the same kinds of financial resources as NY Times or a WSJ will go under. This is a truth that will likely be shared across a multitude of much smaller affiliate sites such as this, and is something that anyone in the digital space (whether an advertiser or affiliate marketer) needs to keep in mind.

What Is The Cause?

What we as advertisers are learning is that the context in which an ad is presented is equally as important as the content within it. That is to say, that an ad can be as perfectly worded and targeted as possible in terms of the right audience persona, but if is presented too prematurely in the buyer journey, or on a medium that typically doesn’t indicate high user intent, results will waver.

In today’s day and age where users are inundated with hundreds of different ads per day on their respective devices and channels, one thing is becoming clear; users don’t dislike bad ads as much as they dislike a poor user experience. This is something that really can’t be stressed enough to advertisers, and is likely a cause of the increased amount of ad blocking that takes place.

Related: How Does Quality Score Affects Your Ads?

Think about this – users have demonstrated in the cases of Hulu, Netflix, HBO and many other subscription-based streaming services that they are so opposed to seeing advertisements that they are willing to spend money for the privilege of not seeing them. Why? Because a user doesn’t log into their Netflix account  or go onto a mobile app to search for products and services. The user intent in that instance just isn’t as compatible with effective advertising. The user likely engages with those platforms to relax and be entertained, meaning that they are already less qualified to take any kind of significant action on an ad that is served to them in that instance.

This assertion actually backed by the data in the KPCB report as well. Its first-party data demonstrates that of the sample taken, 81% responded negatively to pop-up ads within Mobile Apps. Also, 80% responded negatively to Pre-Roll ads, and 79% responded negatively to In-Banner auto play ads on YouTube.

Why? There are many factors at play there, sure, but the main message is that consumers will not provide any significant direct-response revenue on these platforms, because it simply isn’t the user experience they are seeking when they choose to engage with those platforms in the first place.

Conversely, direct response revenue on ad clicks is much higher somewhere like Google, due to the fact that a user is currently seeking out a solution or product in the Google marketplace. They are, by definition, much more qualified to purchase or take a significant website action due to that fact, because it is the experience they signed up for by searching.

Users will shy away from a bad user experience and disengage with a brand as a result, so as advertisers, our primary responsibility is to serve those users a meaningful ad, with relevant messaging and within the proper context. If advertisers don’t begin to understand and make this switch, not only will they waste their money in channels that will not provide a return to the bottom line, but they run the risk of fatiguing users to the point of ad-blocking just to get away from a bad user experience.

Wrapping Up

The big takeaway here is that this trend is something that advertisers not only should be aware of, but should strategize around as well. User intent can be discerned simply from the device or channel with which they are engaging – so why as an advertiser would you continue to push ads where your main KPI is revenue on platforms where the user is not equipped to help you in that effort?

Advertisers should instead leverage these different types of user intents in their strategy to first introduce a brand on the softer marketplaces like Facebook, YouTube, etc., and then go after users more aggressively in a marketplace like Google where they have demonstrated more serious transactional or heavy information-seeking intent.

This way, you spend your money more effectively, you can integrate more channels into your strategy, and you don’t run a risk of fatiguing users of your ads and brand due to poor user experience. In this way, you can continue to adapt to the changing digital advertising landscape and still reach the right people, at the right places, at the right time, in the right way.

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