The digital media battlefield as ad blocking forces are deployed

I like technology, digital trends, the media landscape...and if I had to pick a hot topic affecting all of them lately my choice would be the ad blocking phenomenon. I guess I am a little biased after having worked at an adtech startup for the last 7 months, but still...

It is obvious that since the advent of the internet, traditional media have suffered declining advertising revenues as readers have shifted from paper to digital editions. Publishers have effortlessly (and not always successfully) tried to find business models (subscriptions, diverse freemium schemes, 100% ad-based, etc.) to rebalance their top lines.

Such eagerness to generate increasing digital revenue has in most cases led to a proliferation of advertising at the cost of the user experience. We have reached the point where such ad proliferation has caused many users to find their navigation experience increasingly disturbing, intrussive, annoying...in short, a perfect storm for ad blockers (and an opportunity for new non-intrussive advertising formats).

According to a report by PageFair and Adobe, ad blocking will result in almost $42bn in foregone revenues in 2016 globally (rising from $21bn in 2015). The same report points out double-digit YoY increases in users' ad blocker adoption.

Bad news for publishers as their already somewhat weak digital revenues are impacted by a tidal wave. Obviously, publishers are trying to react by forcing users to disable their ad blockers in order to navigate a site or by kindly asking them to do so...We have just known that, for instance, leading French publishers such as L'Equipe, Le Monde or Le Figaro are pushing together against ad blockers.

This is obviously bad news for advertisers as well. Along these lines, Fast Company reported in January that at the last Interactive Advertising Bureau (IAB) annual conference, Adblock Plus (one of the leading players worldwide) was kicked out.

It is probably easier said than done but at the end of the day the solution is about finding a balance between revenue and user experience. It sounds obvious, I know. As users, we have to understand that publishers have to pay salaries, premises, technology, etc (like any other business!), and that advertising plays a critical part in that. We cannot demand "free" quality content just like that and we should tolerate some reasonable degree of advertising. At the same time, publishers have to acknowledge that it does not make sense that any given user just wants - in a majority of cases - to close a pop-up as soon as it opens, or skip any pre-roll as soon as it kicks off.

And it is in this context that finding and implementing new advertising formats - native advertising, programmatic technology, etc. - that provide relevant (as opposed to general), quality (as opposed to junk) information to users may be the key to finding that balance. Happy, recurring users mean more traffic which, in turn, should translate in higher revenue. But finding the right formula for this equation is still something in the works.

Netflix as a paradigm...or it's the content, stupid!!

There is no doubt that the significance of content in the media and digital spaces is paramount, and that thousands of reports, articles, books and posts have been written about it. Even major corporate deals have been reportedly completed - Verizon's recent acquisition of AOL is a case in point - on the basis of content. 

Content is king and becoming more and more significant. And when speaking of content, Netflix is one of those names that comes to mind right away. I have had some sort of direct experience about this most recently. 

Netflix, HBONow, Sling, Hulu, Amazon Prime... it is amazing how quickly you can get used to the seamless experience of having all the shows, documentaries and movies (i.e. content) you want within your reach at any time, without neither ads nor schedule constrains. Today, I am all in when it comes to cutting the cable cord. And I was not aware that I felt so strongly about it until circumstances have forced me to change my adopted habits and get back to cable tv.

My entertainment menu while in the U.S. came from over-the-top services such as Netflix, Amazon Prime and, more recently, HBONow. I have digested content like crazy, at my own pace, whenever I have wanted to. However, after landing in Spain I confirmed my fears: none of these services is available in Spain (well, Netflix just announced its forthcoming Spanish launch on October 20, thank god). That has led me to Telefonica's pay-tv offering which, in turn, has quickly discouraged me from watching tv at all. I can't stand the experience, I seldom find interesting content at a time that works for me.

Unfortunately, Spain has traditionally be at the very top in the global piracy rankings, both in relative and absolute terms. It is also often said that this is the result of a country culture. I am not gonna say that the latter is not partially true, but I am also pretty sure that the reality would be a very different one had Netflix or others been around for quite some time. Changing the existing mindset and making people pay monthly to get content is going to take a while.

Speaking of Netflix as a paradigm of good and relevant content, I couldn't help sharing their latest native advertising campaign - Cocainenomics, on the occasion of the premiere of "Narcos" - on the Wall Street Journal. It is jaw-dropping.

Native advertising is a growing trend in digital advertising: it is the practice of making an ad on a platform resemble the look and feel of whatever content the user is there to see or read. This a growing digital advertising segment has been forecasted to be worth $5-10 billion in 2016.  

All experts point out that, in order for native advertising to become the more engaging tool it is for the user, advertisers need to be able to tell stories, to connect with their audience, to address the later's needs. And content - more accurately, the meaningful and quality content - is the secret ingredient that guarantees success, for both publishers (more money) and brands (more brand awareness)...and readers (engagement).