Ad Blocking, Receptivity and Payment:

A Complex Love Triangle

This is an extended version of the article which originally appeared on M&M Global.

Ad Blocking remains a hot industry issue based on the continued rise of ad blocking on desktop and now on mobile. It's costing the online advertising industry billions of dollars annually. Kantar Millward Brown and GroupM recently explored who blocks ads and why, and recommends what advertisers, agencies and publishers can do to reduce ad blocking.

Three headline findings emerged.

1. Ad blocking is the tip of the iceberg.

Online ad blocking is arguably just the newest and most measureable example of an ad avoidance issue which extends across multiple media. Our analysis revealed that there are also ad avoiders. Ad avoidance is a trait that underpins ad avoidance strategies from ignoring ads to blocking them, and people who actively avoid ads in one medium are more likely to avoid in another. So people installing ad blockers are also more likely to be putting the kettle on when the TV commercial break begins.

The potential for the continued growth of ad blocking depends in part on the pool of people who want to avoid advertising. Our study suggests roughly three quarters of people try to avoid advertising in one way or another, but the group of people who actively avoid is lower (28% claim to have installed a desktop ad blocking plug-in and 13% claim to have installed a mobile ad blocking app).

Ad avoiders are more likely young, reasonably well educated males who are not particularly heavy consumers of media. They are more likely to be streamers of audio or video content. We also found that online "Observers", heavy online users who tend to rely less on social media, are more likely to avoid ads.

The extent of ad avoidance and ad blocking varies widely across markets, but the issue is global. Israel tops the overall ad avoidance list, and Japan is at the bottom. Desktop plug-ins are most prevalent in Greece (40% of our online sample) and least prevalent in Egypt (15%). Mobile ad blocking apps are most used in India (22%) and least used in Japan (8%).

The primary reasons people install an ad blocker are because they consider ads to be an interruption or annoyance. Many also fear that ads slow devices or claim ads are generally not relevant or helpful (especially on desktops). So will better ads truly help to hold back the ad blocking tide?

2. Ad receptivity is one – but only one – of the drivers of ad avoidance & blocking

We also learned that ad blocking is significantly linked to ad receptivity. While we cannot definitively prove causality in this relationship, this does suggest that increasing positivity towards online advertising may help reduce ad blocking, and so the industry should be able to address this in part through its own behaviour. Online ad blocking is highest among people who are least receptive to ads (and this applies to both desktop and mobile). Within desktop, online video, ad receptivity has the strongest relationship with ad blocking, so the industry should focus most of its attention here. The relationship between ad blocking and display ad receptivity is less strong, but still significant.

Of course, ad blocking isn't the only way to avoid ads. Taking control (skipping when possible - 61% globally) and physical avoidance (looking away or doing something else - 45% globally) are far more prevalent than ad blocking. Both of these avoidance technique are also more likely among people who are less receptive to online video ads.

Given the importance of receptivity, advertisers need to identify advertising formats and places and moments when people are more open to their messages. Our analysis looked at many different individual ad formats, which can be categorised into four distinct clusters, with the following receptivity hierarchy:

  • Traditional, non-digital – TV ads, outdoor ads, print ads
  • Controllable online video – skippable pre-rolls, click to play video, sponsored lenses
  • Online display
  • Non-controllable online video – non-skippable pre-rolls, social auto-play videos

Many people are also less receptive to ads on mobile devices than laptops or PCs. While age plays a role in receptivity, this is not a simple linear relationship across all formats. Globally, Gen Z are less positive than Millennials and Gen X to traditional and non-controllable online video, but more positive to controllable online video. Millennials are most positive to online display ads.

3. Publishers should consider offering subscription-based ad avoidance options

Ad annoyance drives willingness to pay to block ads, but this is low (just 12% overall, 8% on desktop, and 7% on mobile), but the economics of content is changing. Gen Z and Gen Y might be more likely to avoid ads, but they are also more willing to pay for premium content. And people willing to pay are generally less receptive to non-controllable video ads and more likely to block ads if they're not given a premium, ad-free alternative on their favourite sites.

This suggests that more publishers may need to consider mixed revenue models. While the majority of people will tolerate advertising as long as it is not too invasive, there are a hard core of ad avoiders where a payment option may help reduce more radical ad blocking. People's poor opinions about ads are what drive them towards avoidance, but it could also drive them to pay.

Conclusions and recommendations

Because ad avoidance seems to work across media, media-specific solutions will only ever be part of the answer. Although it did not form part of our analysis, quality of creative across all media vehicles will clearly play a major role in shaping whether people embrace or reject advertising in the future.

The global online advertising industry has urgent work to do. Initiatives like the Coalition for Better Ads are making progress with best practice guidelines and industry standards which will remove the least popular online ad formats. But advertisers and publishers shouldn't wait to act. Our global and country-level data makes it clear that shifting media budget away from non-controllable online video formats, especially on mobile devices, is the simplest way that marketers can help improve attitudes to online advertising. In time, this could well help reduce ad blocking.

Publishers should also consider offering premium ad-free access options which will appeal to some people who are currently turning to ad blockers. Industry efforts to actively promote the benefits of not blocking ads could usefully be targeted at younger, educated males, and delivered via streaming platforms.

In addition to these initiatives, there are other factors which may help. Advertisers need to create more compelling content which will be relevant in the contexts where it is placed. Publishers need to reduce advertising clutter and focus on polite, controllable formats. Media agencies need to buy those formats, and also improve targeting, using more frequency capping and judicious retargeting to reduce irritation.

Ad blocking is everyone's problem to solve, but as long as we urgently address the key issues, there should be a whole lot more advertising love to go around.

Background and Acknowledgements

The learning for this article is based on analysis of Kantar Millward Brown's AdReaction Gen XYZ study and GroupM's Live Panel. 4,718 of the 23,907 global AdReaction study participants also completed the Live Panel survey, enabling AdReaction's ad blocking and receptivity data to be explored and compared with granular understanding of media habits and attitudes.

Analysis for this article was conducted by Simeon Duckworth & Mehdi Hosseini (GroupM), and Duncan Southgate, Paul Marquez and Fernando Hernandez (Kantar Millward Brown).

This is an extended version of the article which originally appeared on M&M Global.

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