The Unexpected Effects of Ad Blocking Programs

October 30, 2015

2:23 pm

Advertisers and ad fraud bots are naturally at odds with one another, with the latter’s devious efforts causing the former to waste about $6.3 billion annually on what they think is legitimate traffic – but some think that number actually may be as much as $18 billion. While they won’t be allies anytime soon, there’s one thing advertisers and bots surely agree on: ad blocking is not good for the bottom line.

Consumers around the world are championing ad blockers – especially since Apple enabled them on devices in September – because they can view their favorite content without being bothered by pesky banners, videos, and flash ads. But I wonder if they’ve seriously considered whether their favorite sites can continue to exist without advertisers’ dollars.

Even huge revenue generators like YouTube need advertisers. The video platform spends money on all kinds of things: Among its biggest expenses are hosting fees and employees to maintain the site and remove videos that violate any terms. Those video ads you have to watch before you see your desired content enable the site to remain profitable.

Ad blocking continues to change the face of advertising by impeding the amount of available traffic. However, that alone won’t cause the price of digital ads to skyrocket. Supply and demand will be the driving forces behind rising costs. Additional ad blocking technology will limit available traffic inventory, spurring advertisers to increase their bids, making it more difficult for other advertisers and sites to survive.

Ad Blockers Foil Fraud, But Not for Long

Traffic isn’t the only thing that will be affected by ad blocking. Bots will become more intelligent so they can weasel their way around ad blockers. Fraudsters will begin to identify and target sponsored content, which many in the industry herald as safer from fraud than actual ads. But when fraud makes up about one-third of all traffic, it’s no surprise that it’ll want to find a way to infiltrate the web, ad blockers be damned.

Since Apple enabled ad blockers on mobile devices, users have been downloading them in droves, with one study finding that about two-thirds of Millennials use them. Users may think all their problems are solved: They can browse Instagram, swipe on Tinder and catch up on gossip sites without so much as a tiny static banner bothering them. Xanadu, right?

Not really. It’s common for bots to be found on personal mobile devices, living in close quarters with those same ad-blockers designed to eradicate them. And bots are so smart that eventually, they’ll outsmart blockers and find a way to that precious content users are trying to view sans ads. They’ll find a way to disable blockers to view advertising in a way that may make it impossible for consumers to even detect.

Video Vulnerability

Videos also are especially vulnerable as they become more prevalent in media, with most social networks able to host the content. Snapchat, Instagram, and Vine have always been big champions of video – not to mention YouTube, obviously – but now Facebook users can even have videos or gifs as a profile picture. As they continue to grow in number, fraud will latch onto them like the plane’s going down.

But what this industry potentially needs is to hit rock bottom, with every type of content struggling due to fraud. It will spur technology companies to design better tools to fight bots, and fraud detection companies will become more proactive in detecting fraud. Overtime, advertisers will see fraud slowly decrease with the end goal being the eradication of bots.

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Rich Kahn is founder and CEO of eZanga, a digital marketing firm that specializes in fraud protection.

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