HaloGear Executive News


Ad Blockers Are Losing The Ad Wars

Recode just published that 3 of the top 4 paid smartphone apps are Ad Blockers.  Anil Dash and other internet heavyweights have weighed in on the ethics of users daring to block ads, as that could derail small bloggers. The CEO of Outbrain (content delivery) is bashing ad blockers. Conflict!

Ad Blockers currently think that "Consumers don't want ads!"

...but that's not accurate.  Consumers *love* movie trailers, for example.  Trailers are ads!  Consumers love actual coupons, too.  Coupons are ads!

www.unlockable.com is another angle, as they turn ads into fun user games (and they also have a play for credit angle). Ads that are games are...fun!

My 1999 Startup Cash4Mail.com paid consumers $0.50 for each email ad that they read.  No one tossed those emails into the spam folder ... because people don't throw away money.  Cash for ads is beloved.

Imagine that you are flying on a commercial airliner long-enough ago that you were served a bag of SouthWest Airline's honey roasted peanuts.  They were wildly popular with people who didn't have allergies.  They weren't thrown away simply because they had a SouthWest Airline's ad on them.

Likewise, people don't throw away Hilton shampoo just because it has Hilton's logo on it, either. Ritz mints on a bed pillow are treasured! Yet, they are still ads.

What the above means is that people won't block or trash ads that come with value to the consumer.  It might be content. It might be cash. It might be entertainment.  It might be a valuable invitation (e.g. be on the guest list for a Vegas celebrity pool party).

On LinkedIn an advertiser could be charged $20 when a reader clicks a single ad link. $20!  But what does the reader get from clicking that click?  Not much...so click-through responses are measured in single digits per thousands of ad links shown to readers. Hardly ideal for anyone, advertiser or customer.

$20 is a lot of cash, though. If a reader was paid $.50 to click on that LinkedIn ad, then there would be a lot more LinkedIn readers clicking a lot more LinkedIn ads.  The more that you paid the users to read the ad, the more readers would click on the ad.

This is the opposite of readers not wanting ads. Hey, maybe we're onto something here!

Readers want ads that give value to the reader. Movie trailers give value via their content. Coupons give readers value via savings. Paid Clicks give readers actual cash for clicking on ad links. Games give value via entertainment.

Those are the ads that readers won't block.

Improve the value to consumers from the ads enough and you could put Ad Blockers out of business...because people would want to see the ads.

This means that Ad Blocking is not an ethical issue. There's no conflict after all.  The pushback is coming from advertisers who simply don't want to improve the value of their ads.  They are resisting change.

Tough.  In the end, the consumers will get what they want. Fighting it just delays the inevitable. Ad Blockers today will mean better ads tomorrow.

In the meantime, we might consider two different groups of businesses.  One group depends on ad revenue: Google, fb, Twitter, and Yahoo.

The other group doesn't depend on ad income: Microsoft, Apple, Amazon, eBay, Intel, Uber, and AirBnB.

The first group is more likely to be negatively impacted by Ad Blockers initially, yet stands to benefit more as ads improve their value to consumers later.

In the second group, Uber stands out as the easiest fit to use future advertising for an additional revenue stream (presuming that future ads have more value to the consumer).  Surely you've seen a taxi cab with advertisements posted on it, or perhaps even with ad magazines inside it. It's not much of a stretch to see ads make the jump from taxis to Uber vehicles.  They are giving away free Wi-Free inside their cars, so there's an easy place to insert ads, too.

Boom!  Just like that, ads can be seen expanding.  The death of ads via Ad Blockers won't happen...the opposite will.  Ads will grow into more locations because they were forced (by Ad Blockers) to get better.

Ads are going to get better.

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