Online advertising is destroying itself. And it is doing so in a way that will fatally undermine online publishers’ sustainability.
Increasingly brash formats and data snooping by online advertisers are driving millions of people to sever publishers’ revenue lifelines by blocking all advertising. The outlook is very bleak indeed.
Publishers’ are desperate to extract revenues from the content that they provide to readers and viewers online. As a result they have permitted advertisers to target their audiences with ever more jarring and annoying advertising. And worse, some advertising operators snoop on audience data at the same time, which benefits the publisher little but alienates audience members.
The irony is that the more aggressive the publishers’ attempts to monetise, the lower readers’ tolerance becomes. Large numbers of the audience are moving to adblocking, which automatically blanks out all advertisements on any webpage. And so, conventional advertising has created a downward spiral that is destroying itself.
Here is what that spiral looks like:
We are witnessing the collapse of the mechanism by which audiences support the majority of online news reports, entertainment videos, cartoons, blogs, and cat videos that make the Web so valuable and interesting.
Last year 144 million people – that’s roughly the population of Russia – were blocking advertising on their screens. If the annual growth in blocking continues at 69% then they will be joined this year by an influx of new blockers as numerous as the population of the UK. The odds are that growth from 2015 to 2016 will be higher, not least because Apple’s next web browser will enable ad blocking for a large number of new users.
It is possible that none of these people will ever see an online ad again. Online publishers will shut their doors as a result.
To protect their businesses and sustain the diversity of the open Web publishers must refocus on the their most precious asset: the relationship between editor and audience. This is a burning problem.
Update (9 July 2015): I am joining PageFair, starting tomorrow, to try and fix this problem.
Update (10 July 2015): (And I do appreciate the irony of whatever ads WordPress.com may serve in the box directly below this post.)