Sophisticated media planning can counter ad-blockers: Venugopal Ganganna

Venugopal Ganganna, CEO & Partner, Langoor, decodes the various issues involved in ad-blocking, the challenges faced by publishers and advertisers, using technology to beat ad-blocking and more. 

How much are the ad-blockers costing the advertisers as well as media publishers in terms of revenue?
The global cost of ad-blocks in 2015, I think, was around $22 billion. At 40 per cent growth, that should surpass a global cost of $30 billion this year. Compare that with global digital spends of $170 billion as expected this year, and the magnitude becomes clear. (Source: https://downloads.pagefair.com/wp-content/uploads/2016/05/2015_report-the_cost_of_ad_blocking.pdf) 

How big is the problem of ad-blocking in India?
The problem of ad-blocking in India is mainly evident on mobile. Mobile being the leading source of Internet traffic, some sources suggest that as much as 60 per cent of mobile Internet users in India use an ad-blocker.  

In India in 2016, around Rs 7,300 crore will be spent on digital channels. On an average, today 40 per cent of all digital media spends are on mobile. So, that’s more than Rs 1,500 crore worth of ad revenue and reach potentially being lost to ad-blockers. That is substantial. (Source: https://www.livemint.com/Consumer/LjI3ZO4nYkN8DNdyMIlJlJ/Ad-spending-to-grow-at-155-in-2016-higher-than-2015s-14.html) 

How would the phenomenon of ad-blocking affect the campaigns of the advertisers?
More often than not, advertisers we know are paying for performance or delivery of ads. So the main loss here lies with the publisher, who is unable to deliver the ad, and hence may not get paid for it.  

Also, today advertisers we work with are starting to have sophisticated marking mixes, including owned and earned media alongside paid media. This way they are able to reach the consumer independent of ad campaigns. However, this is a major problem for publishers or ad-revenue reliant companies such as Facebook. 

What are the challenges that ad-blocking poses to publishers as well as advertisers?
A browser called ‘Brave’ was recently launched in the market, which blocks ads by default to make the page load faster. And the uptake of Brave has been really high. There are new tools like this coming out every day. 

We are at a point where the usage calls for serious re-imagining of the business model. In many ways publishers, advertisers and agencies are responsible. But the problem is starting to reach a stage where the economics of the web as we know it are being threatened. 

Paid subscriptions for publishers have not really been an option in India and hence, publishers need to find new ways to increase revenue. Native advertising is one path to it, Patreon is another – but there needs to be a serious introspection on the same. Unless there is toning down of both quality and quantity of ads, publishers will struggle to stem this problem. That doesn’t mean the cost of ad should go down too. 

Advertisers will find a range of ways to reach people beyond ad exchanges which are facing the challenges, but publishers or ad-reliant websites will face real challenges moving forward. 

In what ways can publishers and advertisers convince people not to use ad-blockers?
The Times of India has started blocking users who use ad-blockers. That is certainly one approach to it.  

Facebook has decided they will serve ads from the same source where your newsfeed comes from, so that ad-blockers cannot tell the difference between ads and your news feed.  

There are a number of other such solutions being tested, but it’s not addressing the root of the problem. The root of the problem will be served long-term either if all the stakeholders come together to set standards or publishers re-imagine the business model and move beyond conventional ad revenue. 

What do digital marketers need to do in terms of attention economics?
Obviously with the amount of content and information being thrown at you, the key to stand out is tailored, personalised messaging. That means creating content or advertising that appeals to an individual based on what you know about them.  

Gone are the days where marketers could throw one message for everyone. We need to design campaigns and reach that is considerate of an individual’s attention and time. 

How far can shorter ad formats help brands to meet changing audience demand?
It is not just about shorter ad formats but also cleaner, quiet ads with the right message that are important to reach the audience today. But, for sure, we have seen shorter ads are getting more views and click through than longer ads. 

What kind of challenges does the increasing ad-block technology adoption pose?
The primary challenge in my view is end of publishers or ad-reliant revenue business model. Unless quality of ads improves, fundamentally journalism and writing as a profession will move towards becoming a hobby. 

Could you explain how FB has been using technology to beat ad-blockers?
Ad-blockers rely on the fact that when a website delivers content, the ads come from a different domain from the one serving the main content. Such domains are usually ad exchanges or ad networks. Facebook seems to be saying that if it serves the ad from a similar content as your newsfeed content like status, photos, etc., an ad-blocker should not be able to tell apart the ad. 

Of course, there are workarounds like the word ‘Sponsored’ that show up under an ad. But Facebook has more technical resources than other publishers or ad-blockers. So this should be interesting. 

How can players like Langoor help provide some solutions in the ad-blocking issue?
There are different solutions if you are a publisher v/s advertiser.  

As a publisher, there are opportunities to consider two primary things in the short-term – education of audience and quality of ads. In the long-term, this is an innovation problem and we can approach it with design thinking, by considering what would get a user to be considerate of the content they are consuming. 

For advertisers, we are using better software regularly that helps and ensures quality of delivery. Sophisticated media planning as well as longer-term strategic investment in own and earned media can help reach consumers without worries of ad-blockers.

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