Ad blocking has come to the forefront so quickly that our latest feature feels somewhat like jumping on the bandwagon. But I feel it's important to at least sketch out some of the challenges facing content providers at a time when the industry is just at the cusp of building up the AVOD (ad-supported video on demand) side of online video.
The thing is, ad blocking software has been around probably since the first display ads began popping up on Web browsers more than 20 years ago. It's nothing new, and the way most ad blockers work hasn't changed much since those days. Why is it suddenly such a big deal?
The industry could throw out a number of theories, but the biggest reason is the significant increase in online video ad spending. A new AOL report on the state of the online video industry confirmed many projections for 2015: For example, 10 percent of ad buyers' budgets are being reallocated to online video advertising channels. Use of programmatic buying and selling is climbing significantly; 42 percent of video inventory is being made available programmatically, and 91 percent of buyers are purchasing ads via programmatic options. Digital ad spend will reach $58 billion this year, up $8 billion from 2014, and could reach $93.7 billion by 2019. A "significant portion" of that will be digital video, AOL said.
With those kinds of dollars being thrown around in the online video space, advertisers want to ensure that their ads are being seen. Online video is unknown territory to them, so the increased investment in digital advertising is a risk.
The thing is, just throwing money into digital ads isn't going to solve the problem. Consumers use ad blockers because many video and display ads not only annoy them but cause performance issues with the devices they're using. Ads can cause computers and mobile devices to slow down or applications to crash.
The solution is a lot more complicated than just throwing money at it. Mike Law, EVP and managing director of investments for Amplifi, an ad-buying firm, said in an AOL webinar that everyone involved in the digital advertising transaction -- advertisers, buyers and agencies -- needs to take a holistic view on advertising. "We have to get advertiser, agency and vendor working together. Everybody has a goal in that relationship and [needs to] try to find a middle ground," he said. Common measurement metrics are needed, and most importantly, the user has to be considered.
"That is a space that we are all spending a lot of time talking about … how we use it and how consumers are using it and what they expect from that experience" are factors that need to be considered, Law said. Thing like how much time it takes to download advertising content and what viewers really want in an OTT video experience aren't well known yet. "I don't think we totally understand what consumers expect," he said.
Take a look at FierceOnlineVideo's latest feature on ad blocking, and feel free to comment. How can advertisers strike a balance with consumers with online video ads? --Sam