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StrategyFeb 27, 2019

How Companies Can Avoid the Ad Blocker Arms Race

Christian Buechel

The struggle between companies trying to advertise and customers wanting a better experience has resulted in an escalating ad blocker arms race. But there has to be a way for companies to reach customers while still respecting their wishes. We explore this middle ground with three strategies to get past the need for ad blockers.

a brief history of online advertising

Online advertising has been an inextricable part of the internet ecosystem since its inception. In the early 1990s, the online service, Prodigy, displayed banners at the bottom of the page to advertise Sears products, giving birth to the banner ad. In 1998, the website “GoTo” launched the first search advertising keyword auction to spur the growth of search ads. These weren’t just bothersome outgrowths of the internet, but enablers for the internet landscape we know today. Internet users came to expect free content in exchange for their willingness to view a few ads. But over time, the symbiotic relationship has become strained.

One of the first banner ads run by Prodigy – though it was not clickable.

Source: Internet history podcast 

Around the late 1990s, the embodiment of the worst of online advertising, the infamous pop-up, was born. Unwittingly created by a software engineer named Ethan Zuckerman, the pop-up quickly became the scourge of the internet users everywhere. Once the pop-up became prevalent, it was only a matter of time until someone did something about it. In 2002, Henrik Aasted Sorensen of Denmark developed an early version of the ad blocker during a procrastination project from his university studies. His logically named product, AdBlock, was the first widely used ad blocker that worked by hiding irritating pop-ups from browser windows. This marked the beginning of an arms race between ad blockers and online advertising.

the ad blocker arms race today

Fast forward to 2019 and it is no surprise the landscape has changed. The market for online advertising has grown to $88 billion, led primarily by tech giants Google and Facebook, and the ways in which online ads are served to users has shifted. Video advertising took market share from traditional search advertising in 2018 and the continued growth of mobile advertising (up 36.2% since last year) has companies adapting their advertising strategies.

On the other side, the ad blocker landscape has evolved to include a wide array of ad-blocking technologies. AdLock is a paid software that runs as a separate program to block browser-based and even application-based ads. UBlock Origin is a free browser-based ad blocker that allows users to create custom filters for sites they don’t mind seeing ads from. Brave is another browser altogether, built with ad-blocking and privacy features in mind. As far as numbers go, 31% of Americans now use ad-blocking software on their computers and 20% use them on their mobile phones.

The arms race of ad blockers vs. online advertisements shows no signs of stopping. Ad-blocking users cite the need to improve their user experience by enhancing privacy, increasing web services speeds, and saving on data usage. But each new ad-blocking user means wasted ad dollars for companies that are seeking ways to combat this phenomenon. Below, we outline a few ways companies aim to stay ahead of the curve by being more customer-centric with regards to ads in their digital strategy.

three customer-centric ways to beat the ad blocker

1. Leverage Data to Cater to Ad-Sensitive Customers

As they say, data is king. And it can be a powerful tool for determining which customers are sensitive to ads and which ones are not. Many companies are adopting technologies such as customer data platforms (CDPs) or opting to build fully custom data solutions to harness their ever-growing amount of data. These technologies can distill the ever-increasing influx of customer data from website behavior, sales data, or valuable first-party data into personalized marketing. By referencing a unique customer identifier with corresponding social media websites, offline transactions, and social sentiments, solutions can segment users that exhibit signs of being ad sensitive. This allows companies to personalize marketing content by removing ads, serving better ads, or implementing ad education campaigns to explain how their ads actually help pay for the content users want.

2. Give Customers Power to Manage Their Privacy

Internet users are increasingly wary of the amount of data being collected about them online. According to a Hubspot Adblock Plus Research Study in 2016, 39% of ad blocker users utilize the software to address security concerns. Many believe that ads built on their data can be too personal and overstep their boundaries as customers. This growing sentiment among customers, along with the recent General Data Protection Regulation (GDPR) passed in 2018, is forcing companies to address this concern by giving customers more power to manage their ad preferences. By offering preference centers or using SaaS like consent management platforms (CMPs) to opt into the types, frequency, and content of ads they receive, companies aim to better serve their customers. This transparency can have the effect of improving ad tracking of audiences and provide sensitive users the peace of mind that their preferences are being respected. Popular CMPs in today’s market include Quantcast, Crownpeak, and Tealium.

The Weather Channel and Weather Underground use TrustArc CMP to allow users to opt in or out of certain advertisements.

Source: Clicqz.com

3. Micro-Target Customers With Influencer Marketing

Some advertisers are going around the ad blockers altogether by seeking out new mediums altogether. Armed with customer personas, advertisers can strategically place pertinent advertisements on profiles of YouTube personalities, Instagram accounts, or niche podcasts, all mediums that have grown in recent years. Since these ads are highly targeted, companies can usually be more confident in their ad’s relevancy to the end customer. An added benefit from inserting ads in these mediums is that they have been shown to garner far more trust. According to Musefind.com, 92% of customers trust a social media influencer more than the most famous celebrity. While it is unlikely this can replace a company’s entire ad budget, many successful companies such as MVMT, Away, and Casper used this strategy to scale their brand.

My favorite podcast, Total Soccer Show, brings in advertisers that are relevant to me. I’ve even purchased a pair of Greats shoes based on their advocacy!

Of note, the burgeoning influencer technology space can be overwhelming, making selecting the right vendor crucially important. An array of companies exists to find influencers and/or manage the entire influencer marketing process from identification to ROI tracking, such as HYPR, OpenInfluence, and Mavrck. Incorporating influencer marketing into any marketing strategy alleviates some of the issues caused by ad blockers and may open opportunities with new demographics.

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Companies need to advertise to their customers. And some customers don’t want to be bombarded by ads online. The struggle between ad blockers and online advertising does not seem to be going away anytime soon, so rather than ramp up the arms race, companies must be smart about their digital advertising strategies to make the most of their marketing budgets. At Credera, we have experience working with companies to develop custom solutions to find the right customers or selecting the right off-the-shelf product for your business. Contact us if you’d like to discuss your digital strategy.

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