With over a fifth of the UK’s adults (28%) now using ad blockers, action must be taken to reduce the impact on publisher revenues — a fact the industry knows all too well, writes Ben Barokas (pictured below), founder and CEO, Sourcepoint. In this exclusive byline for ExchangeWire, Barokas explains that, in addressing the ad-blocking situation, there are steps to consider before ad quality.

So far, a large portion of its response has been to focus on improving ad quality. The Coalition for Better Ads, for example — which boasts members from international trade associations and online media titans such as Facebook and Google — was formed for this very purpose. As its mission statement declares, the new alliance intends to “develop and implement new global standards for online advertising” that will enhance the user experience and – in theory – address the ad blocking trend.

But while there’s no doubt ad quality is an important issue that must be addressed, it’s only the tip of the iceberg when it comes to addressing the challenges associated with ad block usage.

Previous IAB research reveals only 14% of ad-block users adopted the software because of low quality or intrusive ads, which makes ad quality something of a red herring in a much wider debate, where there are other concerns the industry should focus on first. 

In fact there are two distinct steps that should be taken before ad quality becomes the key consideration: 

Step 1: Communicate the value exchange 

Producing high quality digital content costs money. From journalists and videographers to graphic designers and webmasters, online publishers have expenses that must be met to keep their content creation system flowing, and traditionally their main source of revenue is advertising.

Consumer understanding of this 'value exchange'  is beginning to increase but is still patchy. For example, 67% of respondents to an IAB survey were aware online advertising funds free content and services, but only 55% realised blocking ads could have serious consequences for publishers; rendering some unable to continue producing high quality content.

Ben Barokas, Founder & CEO, Sourcepoint

To begin addressing the challenge of ad blocking and improving audience relationships, publishers need to make sure the link between ads and content is clear by entering into an open dialogue about the  value exchange of viewing ads in return for accessing content. In doing so, consumers will understand the importance of funding for publishers and that they have traditionally paid for the content they consume with their eyeballs by viewing ads.

Step 2: Offer compensation choice

Once consumers recognise the necessity of funding online content, publishers can begin to explore alternative compensation methods, which allow consumers to choose an approach to compensating the publisher that aligns with their individual preference.

One option could be a subscription model where users either pay a monthly fee to access all content on a website or make a micro-payment to access an individual piece of content. Another possibility could be a customised ad experience, catered to specific user preferences across display, video, and mobile with the ability to ‘opt-in’ to an ad-light or ad-free experience.

Finally users could choose to switch off their ad blocker and return to a traditional ad-funded model, which is still a possibility if audience relationships are strong — 55% of respondents to a recent IAB study would be willing to turn off blockers for certain websites. For users that ‘opt-in’ to ad-funded experiences, improved ad quality and an enhanced user experience will be important.

Industry bodies such as the Coalition for Better Ads are going some way to address ad blocking, and improving ad creativity to continually raise standards should be an industry-wide priority. But, in isolation, these initiatives won’t address the threat to publisher revenues. The industry will only receive a standing ovation when combining the importance of raising ad quality standards with the need to educate consumers about the value exchange, and provide content compensation choices.