A new generation of users can kill ads on the Internet

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Since the first days after the release of the iOS 9 operating system, applications that remove advertising from mobile browsers haveranked first in the list of most downloadedpaid apps in the USA. Thus, Apple’s decision to block ads in the new OS was met with great enthusiasm by users and quickly turned into a real headache for online publishers and advertisers.

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According to a joint study conductedby Adobe and Pagefair this fall, ad blocker usage has already reached 16% among Americans, costing publishers about $10.7 billion in losses last year. What is ironic (and most offensive) here is that the largest increase in ad blocker users has occurred within the age group that is the main target audience of advertisers — Generation Y. A previous study conducted by Adobe highlighted that young people are most likely to install ad blockers: 40% of all people aged 18-29 and almost half of young men. It seems that as the economic value of Generation Y increases, they are increasingly willing to go to any lengths to get their content quickly, at the highest quality, and for free.

It’s hard enough to justify the growinga group of young readers who refuse to pay anyone for content. Nevertheless, empirical research and our own experience confirm the arguments of supporters of ad blocking that the latter is becoming more aggressive and annoying. A recent study by the Reuters Journalism Institute showed that only 13% of American Internet users find traditional advertising banners useful, and more than half consider them annoying and distracting (29% of those surveyed even admitted that they avoid visiting some sites because of such advertising). Thus, there is every reason to believe that this attitude to advertising has led to a rapid increase in the adoption of ways to block advertising, in particular among generation Y. Even among those who do not currently block advertising, 57% of those aged 18-29 reported that they would consider such a possibility if the number of advertisements shown to them continued to increase.

This is a really serious problemfor publishers who have been trying to find a middle ground in the use of display advertising for many years. To combat falling numbers, they relied heavily on creating new types of advertising and finding new ways to get in front of readers. The advent of ad blockers has completely changed the rules of the game — and publishers have little opportunity to recoup lost profits. Writers from The Awl, The Verge, and The Atlantic have been quite blunt about the devastating impact that readers' use of ad blockers will have on publishers (especially the more vulnerable independent media). It's not hard to imagine a future in which a critical mass of ad impressions go undelivered and even the richest publishers are forced to close.

It is worth noting that publishers in the digitaladvertisements could never influence their results. In addition to the fierce competition for ad impressions, which has only intensified with the advent of new ad formats, it has become almost impossible for publishers to differentiate their advertising inventory. The balance has always been on the side of Google and other large ad servers, since they had the technology and access to a huge base of inventory and advertisers — and the ability to cut off this access to any weaker competitor. It's good that everyone has started sounding the alarm about the threat to online publishers from ad blockers, but don't ignore the slow demise of digital and print publishers that has long been taking place thanks to the digital advertising ecosystem, which has greatly harmed publishers and jeopardized journalism as a whole.

This brings up another point:Although ad blockers actually threaten to upend the entire system that supports online publishing, that system is no longer working for nearly everyone involved — ad-blocking consumers, frustrated advertisers and dying small publishers. The main beneficiaries of the system — Google and other major advertising technology companies — have never been interested in protecting independent media, and their growing consolidation has only taken market power away from content producers and consumers. Such a system may work, but it has always been biased against publishers who cannot reach a critical mass — and even for those few who were able to do it, it is still unstable and difficult. Readers are also not at all enthusiastic about it. In general, there is a tendency to «adapt or die» — but who will argue that publishers have been trying to adapt for a long time, and all without success?

This can be a strong argument for those who wantwait and see what changes ad blockers bring. We don't know what Internet monetization will look like without traditional advertising (or at least without most of it), but it's clear that things will be different. The launch of Facebook Instant Articles, Snapchat Discover and Apple News opens up greater opportunities for monetization and access to a potentially larger and more stable audience. Giving control of content distribution to non-core brands is risky, but it's far from new, and at least these ecosystems will be able to identify publisher brands as premium to your friends' status updates and your parents' vacation photos. In addition to the ongoing “platform war,” sites with sufficient resources are experimenting with new advertising formats to increase efficiency and improve the user experience. Mic, with its huge audience of millennials and mobile users, has invested in sponsored content and ad formats that are not blocked by the most popular ad blockers, making it the envy of other publishers. Some authors have proposed alternative models for generating revenue from users who are not exposed to advertising — for example, subscriptions or micropayments. These formats could never achieve success before, but now technological platforms have appeared for this, for example in the form of cryptocurrencies. The ease of micropayments and small tips could attract readers looking to legitimize their freedom from advertising. The alternative is to collect more detailed information about users, which publishers can sell to marketing agencies or use to target their own advertising. This, for example, can be done by registering users on the site.

In any case, digital publishers andadvertisers do not have to choose whether to accept these models or not: rather, the question is when exactly will they have to do it. Ad blocking has become commonplace, and if governments do not intervene, publishers and advertisers will be forced to deal with a growing audience that cannot be monetized in traditional ways. The situation does not yet require immediate action, but with the continued growth in popularity of ad blockers and their coming to mobile platforms, it becomes clear that the display of ads, which is still the lifeblood of the Internet, is in danger.

Thus, a return to a more exclusive,Targeted and premium ads can help publishers regain control. However, if current ad blocker growth trends continue, publishers will only have to thank Generation Y, which has jeopardized their very existence.

: Forbes.com

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