The revolution against the online advertising business model shows no sign of abatement.
I refer, of course, to the implicit bargain news organizations, brands and content providers made with consumers many years ago in which consumers got content for free in exchange for advertisers serving up ads across their various and multiplying screens. At the time it was thought that consumers would not pay for content on the internet.
Out of this compromise, an industry was born, one that posted some $15.9 billion in revenues for Q1 of 2016, according to the IAB Internet Advertising Revenue Report.
Those numbers give little indication of the trouble brewing in the industry. They represent a 21 percent year over year increase and the sharpest spike in earnings in four years.
$22B in Lost Ad Revenues
But all is not well in the online ad world.
There are now 198 million active adblock users — and counting — around the world, according to anti-adblocking solutions provider PageFair. Ad blocking technology causes quite a ding in publishers' revenues.
Dublin-based PageFair estimates ad blocking cost publishers nearly $22 billion during 2015.
Now would be a good time to review that Faustian bargain: consumers get content for free in exchange for viewing the ads. Put another way, publishers don't provide free content without the ads.
Bad Ads Weighing Us Down
The latest indication of consumers less than happy relationship with online ads can be found in a new report from Ann Arbor, Mich.-based American Customer Satisfaction Index (ACSI). The index shows that consumer satisfaction with social media, search engines, information websites, and news and opinion websites, has improved for a third consecutive year, edging up 0.7 percent to 74.9 on ACSI's 100-point scale.
But that same data points to advertising as the biggest offender weighing down e-business customer satisfaction.
"Consumers have not fully accepted advertising as a necessary cost for online services they have come to expect as free," said Claes Fornell, ACSI Chairman and founder. "There is little companies can do to change that perception beyond making sure that those advertisements are relevant and nondisruptive."
Even Facebook Can’t Get It Right
What is most telling are the big drops in satisfaction registered for Facebook and Twitter — customer satisfaction with the social media category in general fell to 73, a decrease of 1.4 percent, with Facebook declining 9 percent to 68, and Twitter falling 8 percent to 65.
It is telling because both social media platforms have changed their algorithms to better determine — or so Facebook and Twitter claimed — what user news feeds display.
Facebook's change backfired when it appeared to have created a potential bias in trending news. In Twitter's case, many users voiced their displeasure about its departure from a reverse-chronological feed.
One lesson the online advertising industry might take away from this is that changing your business model to address a perceived need or take advantage of an opportunity — in this case, the news feed, but in other situations the online ad format — complaints will inevitably follow.
"It's impossible for global brands with massive user bases like Facebook and Twitter to make everyone happy, and both are trying to do so," ACSI Managing Director David VanAmburg said.
Winning Consumers Back
But instead of washing their hands of consumers and their fussy requirements, it may be that the online ad industry just needs to apply some common sense to consumers’ online ad experience.
It's no secret consumers block ads when they become intrusive.
We've all experienced the ad that wouldn't go away or the one that hovered over the text as we scrolled down the page. Video ads have developed a nasty tendency to auto-start, startling people who weren't expecting it — and any colleagues within earshot. Online ads often slow down web loading times and for mobile users, hoover up data capacity.
A Sign of Hope for Advertisers: Two-Thirds of Ad-Blockers Will Relent
A new study by New York City-based IAB believes that two-thirds of consumers who currently block ads would willingly deactivate their blockers, given the right incentives. It suggests using tactics such as giving users more controls via a video skip button, or allowing them to rate ads with a thumbs up, thumbs down, and of course, assuring them of the site's safety.
IAB also warned its members against a litany of bad ad practices: do not block content with ads, no long video ads before short video content, no ads that follow down the page, no autoplay, no slow loading (especially on mobile) ads, no pop-ups and no full page ads.
For the more hard-core, or stubborn, ad blockers, IAB suggests polite messages asking them to turn off their ad viewers in exchange for viewing the content — and then following through with keeping the content locked if they don't.
After all, a deal is a deal.