Video: How Slate Is Tackling the Ad Blocking Problem
Editor’s Note: The below video is excerpted from the March 8th webinar “How Publishers are Solving the Ad Blocker Problem.”
The stats on ad blocking paint a bleak picture for the future. According to a report from PageFair and Adobe, ad blocking drove an estimated loss of $21.8 billion in ad revenue in 2015 globally. In the U.S. the estimated revenue loss was $10.7 billion, and PageFair and Adobe predict that will grow to $20.3 billion in 2016. Many publishers’ reactions to these stats may be to find a new line of business, but Slate’s director of product development David Stern isn’t ready to hit the panic button yet.
Instead, Stern has dove deeper into the ad blocking problem, and has asked a series of thoughtful questions that have helped Slate identify the root of the issue and suggest a few potential solutions. Stern encouraged other publishers to evaluate the ad blocking threat similarly, and outlined his process during the webinar, “How Publishers are Solving the Ad Blocker Problem.” You can watch the complete webinar here.
How Bad Is Ad Blocking Really?
First Stern questioned the results of PageFair and Adobe’s research, knowing that the vendors have a vested interest in exaggerating the ad blocking threat. He found when he dug deeper into the report that PageFair and Adobe correlated lost ad impressions with lost revenue. The vendors reported that ad blocking reduced ad impressions by 16% and translated that to a 16% revenue loss for publishers. Stern pointed out that this is unlikely since most of the blocked ads are programmatic which are sold at significantly lower CPMs than direct-sold, typical ad inventory.
Next, Stern asked what impact ad blockers had on Slate specifically. He and his team developed their own method for tracking ad block usage and estimated that Slate lost 8% of its potential ad revenue to ad blockers. He said that given Slate’s tech-savvy audience, this loss was actually lower than they had anticipated. “That’s not a trivial number. . .” said Stern, “But it’s not quite the-sky-is-falling territory either.” He added that as a result of measuring ad block usage among its audience, Slate discovered that ad blocking is actually plateauing on the site, so the doubling of ad block usage that PageFair and Adobe predicted for 2016 seems unlikely at Slate.
Why Do Readers Install Ad Block Software?
What Stern was curious to discover next was why readers use ad blockers. Referencing a 2014 IAB survey, Stern said that most ad block users want to protect their computers from viruses and improve the user experience of sites. Stern wanted to see if Slate could reduce ad block usage by removing it’s most intrusive ad unit, the interstitial, and by improving page load times across the site. “We don’t want to be contributing to the problem. We don’t want someone to have a negative ad experience and decide to take the time to install an ad blocker because of us,” explained Stern. Along with removing interstitial ads, Slate reduced page load times by 25% last year and intends to speed up pages even more in the next few months. “We’ll be using these efforts as a peg around which to ask ad block users to uninstall their ad blockers,” said Stern.
Is There Technology That Can Circumvent Ad Blocking?
Stern and his team also looked into vendors who promise to get around ad blockers, such as Secret Media, Sourcepoint, and PageFair. While Slate is open to possibly using these services in the future, Stern said that currently these vendors are playing a technological game of cat and mouse with ad block software providers. “It’s not clear how it will shake out yet,” explained Stern, “and it will require a fair amount of engagement from the publisher itself. You can’t just plug and play these types of solutions. And it’s unclear if publishers will get all of their revenue back.” Stern said that as of now, these services do not seem like the best way for Slate to utilize its scarce resources in the fight against ad blockers.
Can We Prompt Ad Blockers to Donate Money?
Taking a page from The Guardian, Slate has begun targeting ad block users with messaging to sign up for a paid reading experience. Slate has offered an ad-free membership called Slate Plus for the past two years, and now encourages ad block users to sign up for this membership. The prompt to sign up for Slate Plus is driving $5,000 in lifetime subscription revenue every month, or $60,000 a year. “This is not a huge dent in the overall lost revenue in the face of ad blocking, but it’s been a good way for us to learn how to identify and target ad blockers with specific messaging and we plan to expand on that,” said Stern.
Should We Block the Ad Blockers?
Stern said that the most aggressive approach to ad blocking is creating a hard ad block paywall, where ad block users must either turn off their ad blocker or pay to view a page. Condé Nast and Forbes have been testing this method. While it will likely drive greater revenue for these brands, Stern thinks the strategy has some significant drawbacks. He is concerned that blocking ad block users from content will deter them from returning to Slate or sharing Slate content on social media. In addition, he thinks the growing popularity of native apps like Facebook Instant Articles and Apple News, where ad block software does not work, will mitigate the need to invest in a hard wall against ad blockers.